International monetary economics

Teacher(s)

Bodart Vincent;

Language

French

Main themes

The course is concerned with the study of the main economic factors and mechanisms that explain the determi-nation of external current accounts, real and nominal exchange rate changes and international capital move-ments. The main topics of the course are : the ajustement process of the external current account, the determination of nominal and real exchange rates in the short-run and in the long-run, central bank interventions in the foreign exchange market, the impact of the exchange rate regime on macroeconomic fluctuations, and the mechanics of financial crises.

Aims

At the end of this learning unit, the student is able to :
1	At the end of the course, the student is supposed to be able to understand precisely the main concepts, argu-ments, and analyses presented during the class. He must be capable to use the theories presented during the course in order to analyze rigourously international monetary facts and events.

Content

Topics
The course is concerned with the study of the main economic factors and mechanisms that explain the determination of external current accounts, real and nominal exchange rate changes and international capital movements. The main topics of the course are : the ajustement process of the external current account, the determination of nominal and real exchange rates in the short-run and in the long-run, central bank interventions in the foreign exchange market, the impact of the exchange rate regime on macroeconomic fluctuations, and the mechanics of financial crises.
Content :
Part 1. Definitions and concepts

• Chapter 1. The balance of payments
• Chapter 2. Exchange rates : definitions and measures

Part 2. The determination of the balance of payments and exchange rates in a general equilibrium macroeco-nomic framework

• Chapter 3. The model
• Chapter 4. The case of flexible rates
• Chapter 5. The case of fixed exchange rates

Part 3. The adjustment process of the external current account

• Chapter 6. The effets of devaluation : theoretical and empirical aspects
• Chapter 7. The adjustment process of the external current account in a small open economy

Part 4. The determination of exchange rates

• Chapter 8. Purchasing power parity, nominal and real exchange rates
• Chapter 9. Exchange rates, expectations, and financial markets : the overshooting phenomena

Part 5. Special topics

• Chapter 10. The mechanics of financial crises
• Chapter 11. The economics of debt reduction 

Teaching methods

Due to the COVID-19 crisis, the information in this section is particularly likely to change.

A syllabus is available. The syllabus is supplemented by a list of readings that will be discussed during the class.

Evaluation methods

Due to the COVID-19 crisis, the information in this section is particularly likely to change.

The formal evaluation is an oral exam.
The duration of the examen is about 20 minutes.  
The grade will depend on : (1) how well the student masters the concepts and economic mecanisms taught during the course and (ii) the capacity of the student to apply these concepts and mecanisms to analyse a case study.  
Depending on the evolution of the epidemic crisis, it may be decided to organize a remote oral examination.  If this is the case, the students will be informed on due time about the pratical details of the remote oral exam. 

Other information

Pre-requisite: Undergraduate macroeconomics

Online resources

Syllabus + slides + readings

Bibliography

• Syllabus "Relations monétaires internationales"

Teaching materials

• Syllabus "Relations monétaires internationales"

Faculty or entity

ECON