Insegnamento a.a. 2024-2025

20970 - INTERNATIONAL MACROECONOMICS AND FINANCE

Department of Economics

Course taught in English

Class timetable
Exam timetable
Go to class group/s: 31
CLMG (6 credits - II sem. - OP  |  SECS-P/01) - M (6 credits - II sem. - OP  |  SECS-P/01) - IM (6 credits - II sem. - OP  |  SECS-P/01) - MM (6 credits - II sem. - OP  |  SECS-P/01) - AFC (6 credits - II sem. - OP  |  SECS-P/01) - CLELI (6 credits - II sem. - OP  |  SECS-P/01) - ACME (6 credits - II sem. - OP  |  SECS-P/01) - DES-ESS (6 credits - II sem. - OP  |  SECS-P/01) - EMIT (6 credits - II sem. - OP  |  SECS-P/01) - GIO (6 credits - II sem. - OP  |  SECS-P/01) - DSBA (6 credits - II sem. - OP  |  SECS-P/01) - PPA (6 credits - II sem. - OP  |  SECS-P/01) - FIN (6 credits - II sem. - OP  |  SECS-P/01) - AI (6 credits - II sem. - OP  |  SECS-P/01)
Course Director:
TOMMASO MONACELLI

Classes: 31 (II sem.)
Instructors:
Class 31: TOMMASO MONACELLI


Suggested background knowledge

Notions of intermediate macroeconomics and international macroeconomics

Mission & Content Summary

MISSION

Course allows a rigorous training in the main topics of international macroeconomics and finance: exchange rate regimes, financial crises, monetary policy in the open economy, cross-country spillovers, capital flows, the Euro crisis

CONTENT SUMMARY

  1. Global imbalances. Trade balance and the current account.
  2. Empirical puzzles on exchange rates. Business cycles in emerging markets and advanced economies
  3. Current account sustainability. The intertemporal theory of the current account.
  4. Current account and endogenous production
  5. Twin deficits: fiscal deficits and the current account
  6. Real exchange rates and purchasing power parity (PPP)
  7. The TNT model and the determinants of the real exchange rate
  8. International capital market integration. Capital controls.
  9. Nominal rigidity, exchange rate policy and unemployment. Currency unions. Managing currency pegs.
  10. Balance of payment crises and inflationary finance.
  11. Sovereign debt default.
  12. Monetary policy and the exchange rate in New Keynesian (NK) open economy models. Imperfect exchange rate pass-through. Producer currency pricing, local currency pricing, dominant currency paradigm.
  13. Financial frictions in open economy models. The exchange rate disconnect and the Mussa puzzles.

Intended Learning Outcomes (ILO)

KNOWLEDGE AND UNDERSTANDING

At the end of the course student will be able to...

Discern the behavior of exchange rates, analyze the transmission of monetary policy across countries, recognize the origins of financial and sovereing debt crises.

APPLYING KNOWLEDGE AND UNDERSTANDING

At the end of the course student will be able to...
  • Use some fundamental concepts in international macroeconomics and finance, such as exchange rate regime, monetary policy spillovers, international capital mobility and financial markets, which are likely to be very useful in their career.
  • Apply the knowledge acquired during the course to evaluate the consequences of a financial and sovereigng debt crisis for the firm or organization they join after they graduate.
  • Predict and assess the response of the central bank and the government to shocks originating in international markets.
  • Evaluate and compare the economic forecasts and views on the state of the economy made available in the internet and other media.
  • Use such analysis in many of the decisions (pricing, portfolio, business investment, hiring, etc.) they are soon called to make throughout their working career.

Teaching methods

  • Lectures
  • Individual works / Assignments

DETAILS

  • The material is mostly taught through traditional face-to-face lectures. In addition, the instructor teaches several tutorials throughout the course. During each tutorial, the concepts introduced during the lectures are used to answer questions and solve problems that are similar to those on the typical written examination.
  • In addition, the instructor makes available (on the course website on Bboard) a list of links to books, very recent articles or blog posts on topics that are discussed in class - with comments aimed at clarifying how each of them is related to the models and concepts introduced during lectures. Some of these readings are used by the instructor as the starting point for 'case-study' discussions aimed at showing students how the concepts studied in the course can be used to interpret real-world economic events.
  • Finally, during the semester, the instructor hands out a total of four problem sets, which students are strongly recommended to solve to make sure they are up to speed with the course. In some cases, problem sets include problems which have a similar structure to those on the final examination.

Assessment methods

  Continuous assessment Partial exams General exam
  • Written individual exam (traditional/online)
  x x

ATTENDING AND NOT ATTENDING STUDENTS

The assessment methods aim at verifying whether the students have internalized the logical and conceptual pillars of both the empirical and theoretical frameworks proposed in class.


Teaching materials


ATTENDING AND NOT ATTENDING STUDENTS

The main textbook for the course is International Macroeconomics: A Modern Approach, by S. Schmitt-Grohe, M. Uribe and M. Woodford, Princetion University Press.

 

Additional references are:

-Schmitt-Grohe and Uribe, Open Economy Macroeconomics, Princeton Univ. Press.

- Walsh C.,  Monetary Theory and Policy, MIT Press.

Last change 25/05/2024 17:33