International Financial Relations

1. Globalization, international transactions, and the balance of payments

2. The foreign exchange market, the equilibrium exchange rate, and currency

3. The determination of the exchange rate in the long run and in the short run

4. International monetary systems and the adjustment mechanism

5. Currency crises

6. Macroeconomic policy in an open economy

This course introduces students to the foreign exchange market and the vital role it plays in the economy. It discusses the interaction of exchange rates, interest rates, output, and foreign exchange reserves. It begins with a look at what international transactions comprise and how countries across the world record them. It then continues with a look at the market participants in the foreign exchange markets and shows how their interaction determines the equilibrium exchange rate. The course highlights the difference between short-run and long-run drivers of the exchange rate. Finally, the discussion focuses on the effects of economic policy in an open economy.

Carbaugh, Robert J., International Economics. 17th edition, Boston 2019 (Cengage Learning)

Cases, Group Projects and Lecture Material

Class Participation (10%), Group Project (40%) and Individual Assignment (50%)

Introduction to Economics

90