This course overviews the global economy and international monetary system, analyzes countries’ balance of payments and external wealth positions, introduces foreign exchange markets and exchange rate determination, and discusses open economy policy challenges and global financial crises. Lectures focus on macro finance data, economic intuition, and real-world applications of theoretical models. Topics cover patterns and causes of global imbalances, the functioning of foreign exchange markets and the determination of exchange rates, macroeconomic policy effects under different exchange rate regimes, the evolution of global monetary system, the retrospect and prospect of Euro, financial crises and economic reforms. Format: lectures, in-class quizzes, problem sets, a midterm and a final exam.
Objectives
The main goal is to develop analytical framework for understanding the global economy and its interconnectedness, the foreign exchange markets, financial crises, and policy challenges. After completing this course, students should be able to
Interpret global economic and financial conditions in the news and public policy discussions
Apply international balance of payments and wealth position analysis to global imbalances
Master key concepts, measurements, and institutions in the foreign exchange markets
Familiarize with the theories, models, and empirical findings in exchange rate determination
Develop models for analyzing the interaction between exchange rate and the open economy
Model policy effects and challenges in an open economy under various exchange rate regimes
Sketch the evolution and driving forces of international monetary system and the Euro zone
Characterize exchange rate crises and understand the theories and models behind the scene
It is important for students to provide feedback in time throughout the course to ensure positive learning and teaching experience. If students have trouble keeping up with the class material or the workload, please feel free to contact the instructor. It is the instructor's responsibility to support students to make progress and succeed in the course. Students are strongly encouraged to 1) raise questions and participate in the lecture; 2) provide feedback and suggestions regarding teaching and course organization; 3) solve problem sets and conduct research together; 4) improve the learning and teaching outcomes.