Open Economy Macroeconomics

3 units

This course will begin with a review of international trade theory, of the balance of payment accounts and their relationship to international borrowing and lending. We will then study the asset approach to exchange rates determination, exchange rate behavior in the short and in the long run, and the relationship of exchange rates with prices and output. The course will also explore monetary and fiscal policy under both fixed and floating exchange rates, macroeconomic policy coordination and optimum currency areas, international debt problems of developing countries and their relation to stabilization program.