ECN320
International Macroeconomics
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Notes:
Exam results and summary solutions available for 2024 |
Course
description and lecture plan (Aug block 2024):
Course description [kursbeskrivelse]
Lecture plan and schedule [kursplan]
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Group 1 |
Group 2 |
Group 3 |
Group 4 |
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Exercise 1 |
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Assignment: 1.1 and 1.4 |
Assignment: 1.2 and 1.3 |
Assignment: 1.1 and 1.4 |
Assignment: 1.2 and 1.3 |
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Exercise 2 |
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Assignment: 2.1.1 A |
Assignment: 2.1.2 A |
Assignment: 2.2.2 A |
Assignment: 2.2.2 B |
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Exercise
3 Applies to all groups in the same manner |
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Session
/ date / room |
Description
of Lecture Topic |
Lecture
Outline |
Reading
Assignment |
Handouts,
Slides and Exercises (Slides subject to last-minute
changes) |
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Module 1. Linking the Domestic Macroeconomy to
International Transactions |
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1 13.08 |
09.15-12.00 Course overview,
objectives and requirements; intro; Section 1.1-1.7: Macro income accounting
analysis; BOT; BOP; international reserves |
Krugman, Obsfelt & Melitz (KOM) KOM, ch
13 Supplementary reading packets (SRP): |
Fun listening: Keynes v Heyek: Investment vs mal-investment |
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2 14.08 |
09.15-12.00 Section 2: Exchange rates
and purchasing power parity; foreign currency exchange; Section 3: Modeling
of currency mkts: Eqlbm
and changes in eqlbm; exchange rates as trade
policy tool |
KOM, ch
14, 16; (ignore interest rate / asset returns) Appleyard, Field & Cobb (AFC) RR: AFC, ch
20 (pp. 465-484, ignore interest rates / assets) |
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3 15.08 |
09.15-11.00 Optional
session for those wanting a review of trade policy analysis; groups discuss
exercise |
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Related reading (RR): RR:
Houck, ch 15 |
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4 16.08 |
09.15-11.00 Download exercise 1 for
in-class group work. (prepare
to present results and discuss insights) |
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Exercise 1: Modeling trade flows from exchange rate
changes |
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11.15-12.00 Section 3.6:
devaluation and depreciation, Marshall-Lerner condition, J-curve effect |
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Module 2. Money, Goods and Asset Market Equilibrium |
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5 19.08 |
09.15-12.00 Section 4: Money
mkt and i-rate determination; Section 5.1-5.2: Interest rates, capital flows
and exchange rates (i-rate parity and investor behavior); covered i-rate
arbitrage |
KOM, ch
14-16 (focus on interest rate/asset returns) |
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6 20.08 |
09.15-12.00 Section 5.3-5.4:
Capital controls; modeling asset demand, i-E relationship; dynamic
adjustment, Fischer effect, overshooting hypothesis; Section 6: General eqlbm analysis: Mundell-Fleming model; Section 6.1: Goods
mkt eqlbm (IS, DD and AD=AS); Section 6.2: BOP eqlbm, and foreign exchange eqlbm;
capital mkt flexibility; Section 6.3: Asset and money mkt eqlbm
(LM and AA curves); Section 7: Fiscal and monetary policy |
KOM, ch
16-18 |
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21.08 |
Independent study/reading time; groups can meet
to prepare/discuss exercise 2 |
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7 22.08 |
09.15-12.00 Download
exercise 2 for in-class group work. (prepare to present results and discuss insights); FP
and MP effectiveness under fixed and flexible exchange rate regimes |
KOM, ch
18 |
Exercise 2: Effectiveness of FP and MP under fixed and
flexible exchange rate regimes (additional
graphs) |
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8 23.08 |
09.15-10.00 Review exercise 2. Download exercise 3 to work in groups. (Discuss
findings). |
KOM, ch
18 |
Exercise 3: Long-term implications of persistent expansionary policy
intervention |
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10.15-12.00 Sections
8.1-8.2: Monetary
targets, inflation/deflation (inflation targeting), inflation-unemployment
(Phillips curve), non-traditional monetary policy, state of macroeconomics |
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Synthesis: Alternative Exchange Regimes, Optimal Currency Areas &
Monetary Union |
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26.08 |
09.15-12.00 Section 9: Choosing from alternative exchange
regime; optimal currency area; consideration of the criteria; economic
integration and monetary union; Creating the EU; EU and the euro crisis,
banking and fiscal union |
KOM, ch 19 RR: AFC, ch 28 (pp. 705-15) |
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10.15-12.00 Final exam review session |
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Summary solutions: |
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02.09 |
09.00-12.00 Final exam |
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