International Finance

The summer school in International Finance will run in the afternoons. Each day will feature a two-hour lecture followed by a one-hour interactive session, which will include hands-on examples, class discussion, and presentations.

The first half of the course will focus on capital flows and exchange rates. We will review some outstanding puzzles in the field, discuss the proposed resolutions, and relate the results to the policy debate.

The second part will first analyze current account imbalances in the Euro Area, the debt crisis, and the role of monetary policy, and then look at the link between capital flows and inequality.

MATLAB free trial can be downloaded here.

For the tutorials, please bring your own laptop to all the sessions.

• Fama, E. (1984). "Forward and Spot Exchange Rates," Journal of Monetary Economics 14, pp. 319-338.
• Kalemli-Özcan, S. and L. Varela (2021). "Five Facts about the UIP Premium,'' NBER Working Paper 28923.
• Leeper, E. (1991). "Equilibria under `Active' and `Passive' Monetary and Fiscal Policies,'' Journal of Monetary Economics 27, pp. 129-147.
• Mark, N. (2001). International Macroeconomics and Finance: Theory and Econometric Methods, Blackwell Publishing.
• Valchev, R. (2020). "Bond Convenience Yields and Exchange Rate Dynamics,'' American Economic Journal: Macroeconomics 12, pp. 124-166.

• Backus, D. and G. Smith (1993). "Consumption and Real Exchange Rates in Dynamic Economies with Non-Traded Goods,'' Journal of International Economics 35, pp. 297-316.
• Bodenstein, M., P. Cuba-Borda, N. Goernemann and I. Presno (2024). "Exchange Rate Disconnect and the Trade Balance,'' International Finance Discussion Papers 1391.
• Cesa-Bianchi, A., A. Ferrero and A. Rebucci (2018). ''International Credit Supply Shocks,'' Journal of International Economics 112, pp. 219-237.
• Cesa-Bianchi, A., A. Ferrero and S. Li (2022). "Capital Flows and Exchange Rates: A Quantitative Assessment of the Dilemma Hypothesis," CEPR Discussion Paper 18943.
• Itskhoki, O. and D. Mukhin (2021). "Exchange Rate Disconnect in General Equilibrium,'' Journal of Political Economy 129, pp. 2183-2232.
• Kekre, R. and M. Lenel (2024). "Exchange Rates, Natural Rates, and the Price of Risk,'' NBER Working Paper 32976.
• Miranda-Agrippino, S. and H. Rey (2020). "US Monetary Policy and the Global Financial Cycle,'' Review of Economic Studies 87, pp. 2754-2776.
• Obstfeld, M., J. Ostry and M. Qureshi (2019). "A Tie That Binds: Revisiting the Trilemma in Emerging Market Economies,'' Review of Economics and Statistics 101, pp. 279-293.
• Rey, H. (2013). "Dilemma not Trilemma: The Global Financial Cycle and Monetary Policy Independence,'' Federal Reserve Bank of Kansas City Economic Policy Symposium, pp. 285-333.

• Arellano, C. (2008). "Default Risk and Income Fluctuations in Emerging Economies," American Economic Review 98, pp. 690-712.
• Chen, R., G.-M. Milesi-Ferretti and T. Tressel (2013). "External Imbalances in the Eurozone," Economic Policy 28, pp.101-142.
• de Ferra, S. (2021). "External Imbalances, Gross Capital Flows, and Sovereign Debt Crises," Journal of the European Economic Association 19, pp. 347-402.
• de Ferra, S., and F. Romei (2018). "Sovereign Default in a Monetary Union,"  CEPR Discussion Papers No. 12976.
• Fornaro, L. (2018). "International Debt Deleveraging," Journal of the European Economic Association 16, pp. 1394-1432.
• Gourinchas, P.-O., P. Martin and T. Messer. (2020). "The Economics of Sovereign Debt, Bailouts and the Eurozone Crisis," NBER Working Paper 27403.
• Martin, P., and T. Philippon (2017). "Inspecting the Mechanism: Leverage and the Great Recession in the Eurozone," American Economic Review 107, pp. 1904-1937.

• De Ferra, S., K. Mitman and F. Romei (2020). "Household Heterogeneity and the Transmission of Foreign Shocks," Journal of International Economics 124, 103303.
• de Ferra, S., K. Mitman and F. Romei (2021). "Why Does Capital Flow from Equal to Unequal Countries?" CEPR Discussion Papers No. 15647.
• Coeurdacier, N., S. Guibaud and K. Jin (2015). "Credit Constraints and Growth in a Global Economy," American Economic Review 105, pp. 2838-2881.
• Diaz Alejandro, C.  (1963). "A Note on the Impact of Devaluation and the Redistributive Effect," Journal of Political Economy 71, pp. 577-580.