Economics V: International Macroeconomics

Course title:

Economics V: International Macroeconomics

Course-number:

B-GE-VW05-01

Semester (WS/SS):

WS

Semester of instruction:

5

Course typ:

compulsory

Hours (SWS):

Lecture:

Practice:

Seminar

2 SWS

Total:

2 SWS

ECTS-Points:

3

Language of instruction:

German/English

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

Prerequisite:

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

Teaching methods:

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)

Olivier Blanchard, Macroeconomics. Upper Saddle River NJ: Pearson/Prentice Hall 2009; Paul R. Krugman and Maurice Obstfeld, International Economics: Theory and Policy, 8^th ed., Boston: Addison-Wesley 2008; David K. Eiteman, Arthur I. Stonehill, Michael H. Moffet, Multinational Business Finance, 12^th ed., Boston: Pearson Addison Wesley, 2010.

Teaching aids:

www.vwl-elearning.net

Recognition:

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