Economics V: International Macroeconomics

course title:

Economics V: International Macroeconomics

course number:

-

Semester (WS/SS):

WS

semester of instruction:

5

course type:

compulsory

hours (SWS):

lecture: -
practice: -
seminar: 2
total: 2

ECTS-points:

3

language of instruction:

German/English (on demand)

lecturer:

Prof. Dr. Sauer

field of instruction:

• International economic integration and transformation of economic system
• International macroeconomics
• Innovation and growth

purpose:

This seminar introduces the modern theories of the exchange rate determination and the open-economy macroeconomics. The students shall be enabled to analyse and assess the determinants of exchange rate movements as well as of production and income in open economies.

description:

1. Basics of international Macroeconomics: History of the international currency system; National accounting and balance of payment; Interest rate parity: exchanges rates and foreign exchange market
2. The goods market of an open economy: Demand for goods and fiscal policy in an open economy; The exchange rate as determinant of aggregate demand; Financing the current account
3. Monetary and fiscal policy under flexible exchange rates: Interest rate parity under flexible exchange rates; Goods- and financial markets of open economies; Fiscal and monetary policy under flexible exchange rates in the short and medium run
4. Capital mobility and efficiency of internal financial markets: Interest rate parity and fiscal policy under fixed exchange rates; Sterilisation of interventions into the foreign exchange market; efficiency and forecast errors on foreign exchange markets; Risk premia on foreign exchange markets
5. Fixed exchange rate systems and currency unions under real life conditions: Real exchange rates and real interest parity under fixed exchange rate systems; Currency crises in fixed exchange rate systems; Theory and reality of the European currency union

prerequisites:

Macroeconomics (Economics II); International Economics (Economics III); Introduction to statistics

teaching method:

Seminar with presentations of the lecturer and discussion of the country studies of the seminar participants

examination method:

Alternative examination: preparation and presentation of a country study in the seminar

literature
(3 examples)

• Paul R. Krugman and Maurice Obstfeld, International Economics: Theory and Policy, 7th ed., Boston: Addison-Wesley 2005
• Barbara Ingham: International Economics: A European Focus, Harlow, England: Prentice Hall 2004
• David K. Eiteman, Arthur I. Stonehill, Michael H. Moffet: Multinational Business Finance, 10th ed., Boston: Pearson Addison Wesley, 2004

teaching aids:

Objectives, questions and exercises (partly with solutions) for every chapter, additionally handouts (all material also online, vwl-online.net)

recognition:

Equivalent seminars in economics (depending on individual check and recognition)