ECON 459
International Monetary Theory
Economics
College of Family, Home, and Social Sciences
Course Description
Monetary and macroeconomic aspects of international relations dealing primarily with short-run balance-of-payments disequilibrium and adjustments.
When Taught
Contact Department
Grade Rule
Grade Rule 8: A, B, C, D, E, I (Standard grade rule)
Min
3
Fixed
3
Fixed
3
Fixed
0
Title
Econ 459 students will be able to
Learning Outcome
Demonstrate a familiarity with the key issues in two broad fields:
International Finance, particularly exchange rate behavior,
Open Economy Macroeconomics.
Discuss the nature of the foreign exchange market, including:
It's market organization
The role of vehicle currencies
The instruments traded
The role of arbitrage.
Understand and use models of exchange rate behavior:
Covered and uncovered interest rate parity
Long-run monetary and equilibrium models.
Understand financial portfolio theory to the extent that it is useful in explaining exchange rate behavior, including:
The determination of risk premia
How it may explain the "forward bias" puzzle.
Discuss the history of the international financial system since the late 1700's.
Discuss the international aspects of the national income and product accounts, along with the balance of payments accounts.
Apply simple dynamic models of consumption smoothing to the current account.
