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

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.