Kirsten
Wandschneider Ph.D.
Assistant Professor of Economics and IPE
Download the syllabus in PDF format: SYLLABUS
SCHEDULE OF READINGS:
WEEK 1
February 8: Introduction: What is International Finance?
February 10: Open Economy Macroeconomics
· Krugman/Obstfeld: Chapter 12, pp.294-307 (Please review national
income accounts from your macro course before coming to class.)
· Catherine Mann: "Perspectives on
the U.S. Current Account Deficit and Sustainability" Journal
of Economic Perspectives, 2002 (available online)
WEEK 2
February 15: Balance of Payments
· Krugman/Obstfeld: Chapter 12, pp.307-323
· William Gale and Peter Orszag: "The
Budget Outlook: Projections and Implications" The Economists'
Voice, 2004 (available online)
· Michael Boskin: "Sense
and Nonsense About Federal Deficits and Debt" The Economists'
Voice, 2004 (available online)
February 17: Exchange Rates and Asset Prices
· Krugman/Obstfeld: Chapter 13, pp.324-341, Chapter 21, pp.636-647
· Martin Feldstein and Charles Horioka, "Domestic Saving and
International Capital Flows," Economic Journal, June 1980. (J-STOR)
One page research proposal due at the beginning of class.
WEEK 3
February 22: Class will be held in the Library. Brenda Ellis will give
you an introduction to the main databases and search engines that you
might want to use for your research paper.
HW 1 due at the beginning of class.
February 24: Interest Parity and Efficiency of Global Capital Markets
· Krugman/Obstfeld: Chapter 13, pp.341-356, Chapter 21, pp.655-662
· Jeffrey Frankel, "Measuring International Capital Mobility,"
American Economic Review, May 1992. (J-STOR)
WEEK 4
March 1: Money and Exchange Rates
· Krugman/Obstfeld: Chapter 14
· Rüdiger Dornbusch, "Expectations and Exchange Rate
Dynamics", Journal of Political Economy, December 1976. (J-STOR)
(This is a famous "overshooting" paper. It is not required for
the class but you might want to have a look. You will have to be familiar
with basic differential equations to understand it fully.)
HW 2 due at the beginning of class.
March 3: Purchasing Power Parity
· Krugman/Obstfeld: Chapter 15, pp.388-399
· "The Big Mac Index - Food For
Thought" The Economist, May 27, 2004
· STUDENT PRESENTATION: Kenneth Rogoff, "The Purchasing Power
Parity Puzzle," Journal of Economic Literature, June 1996. (J-STOR)
WEEK 5
March 8: Empirics and Problems of PPP
· Krugman/Obstfeld: Chapter 15, pp.400-429
· STUDENT PRESENTATION: Alan M. Taylor and Mark P. Taylor: "The
Purchasing Power Parity Debate" Journal of Economic Perspectives,
Vol. 18, No. 4, Fall 2004 (available online)
Revised research proposal due at the beginning of class.
March 10: Aggregate Demand in an Open Economy
· Krugman/Obstfeld, Chapter 16, pp.433-450
· STUDENT PRESENTATION: Penelopi Goldberg and Michael Knetter,
"Goods Prices and Exchange Rates: What Have We Learned?" Journal
of Economic Literature, September 1997. (J-STOR)
WEEK 6
March 15: Asset Market and Open Economy Equilibrium
· Krugman and Obstfeld, Chapter 16 pp. 450-474
· Paul Krugman, "Exchange Rate Policy: The J-Curve, the Fire
Sale, and the Hard Landing," American Economic Review, May 1989.
(J-STOR) (You are not responsible for
the formal model.)
· Maurice Obstfeld (2000) "International Macroeconomics: Beyond
the Mundell Flemming Model" (This paper is a really nice overview
of trends in international macroeconomics, but not required for the course.)
HW 3 due at the beginning of class.
March 17: Research Paper: Proposal Defense
March 23/25: Spring Break
WEEK 7
March 29: Exchange Rate Regimes and Foreign Exchange Intervention
· Krugman and Obstfeld, Chapter 17, pp.481-502
· Alain Chaboud and Owen Humpage: "An
Assessment of the Impact of Japanese Foreign Exchange Intervention: 1991-2004"
International Finance Discussion Papers, January 2005 (available online)
· Maruice Obstfeld: "Exchange
Rates and Adjustment: Perspectives from the Open Economy Macroeconomics"
NBER Working Paper 9118, 2002 (This paper is not required for the course.)
HW 4 due at the beginning of class.
March 31: Exchange Rate Regimes: Options, Pros and Cons
· Maurice Obstfeld and Kenneth Rogoff, "The Mirage of Fixed
Exchange Rates," Journal of Economic Perspectives, Fall 1995. (J-STOR)
· STUDENT PRESENTATION: Alberto Alesina and A. Wagner: "Choosing
and Reneging on Exchange Rate Regimes" NBER Working Paper 9809,
2003
· Jeffrey Frankel: "Experience Of and Lessons From Exchange
Rate Regimes in Emerging Economies" (available online) (This paper
is not required for the course.)
WEEK 8
April 5: MIDTERM EXAM IN CLASS!
April 7: International Financial Crises: An Introduction to Currency
Crises
· Krugman and Obstfeld, Chapter 17, pp.502-513, 527-530
· Rüdiger Dornbusch: "A
Primer on Emerging Market Crises" NBER Working Paper 8326, 2001
· STUDENT PRESENTATION: Paul Krugman: "Currency
Crises" Mimeo, 1998 (available online)
WEEK 9
April 12: Currency, Debt and Banking Crises - Analysis and Origins
· Krugman and Obstfeld, Chapter 22, pp.665-698
· Mishkin: "Global Financial Instability: Framework, Events,
Issues", Journal of Economic Perspectives, 1999 (J-STOR)
· STUDENT PRESENTATION: Barry Eichengreen and R. Haussman: "Exchange
Rates and Financial Fragility" NBER Working Paper 7418, 1999
April 14: CASE STUDY ON CURRENCY CRISES & The International
Monetary System
· Krugman/Obstfeld: Chapter 17 pp.513-517, Chapter 18 pp.532-545
· Hugh Rockoff, "The Wizard of Oz as Monetary Allegory,"
Journal of Political Economy, April 1990 (J-STOR)
Research paper introduction and literature review due at the beginning
of class.
WEEK 10
April 19: Optimum Currency Areas and the European Experience CASE STUDY
ON IRELAND
· Krugman and Obstfeld, Chapter 20
· Robert Mundell, "The Theory of Optimum Currency Areas,"
American Economic Review, 1961 (J-STOR)
April 21: Public Lecture 4.30-6pm RAJ
Larry Neal: From the Enlargement of the European Union to the Enlargement
of the Euro (attendance required)
· Larry Neal: "An American
Perspective - The Euro: The Ultimate Currency Reform?" (available
online)
APRIL 22 BY 5 PM: E-MAIL THE DRAFT OF YOUR RESEARCH PROPOSAL TO ME AND TO YOUR STUDENT REVIEWER!
WEEK 11
April 26: The Importance of Capital Controls
· Krugman/Obstfeld: Chapter 18 pp. 546-567
· J. Bradford DeLong: "Should We Still Support Untrammelled
International Capital Mobility? Or Are Capital Controls Less Evil than
We Once Believed?" The Economist's Voice, Vol. 1 No. 1, 2004 (available
online)
· STUDENT PRESENTATION: Stanley Fischer: "Exchange
Rate Regimes: Is The Bipolar View Correct?" Speech, January 2001
(available online)
April 28: Macroeconomic Policy and Coordination
· Krugman and Obstfeld, Chapter 19
· Maurice Obstfeld, "The Global Capital Market: Benefactor
or Menace?" Journal of Economic Perspectives, Fall 1998 (J-STOR)
· STUDENT PRESENTATION: Kenneth Rogoff, "International Institutions
for Reducing Global Financial Instability," Journal of Economic Perspectives,
Fall 1999. (J-STOR)
WEEK 12
May 3: No Class - Individual meetings on research papers
May 5: Wrap-Up and Review
May 7: 1-6pm MINI CONFERENCE: RESEARCH PAPER PRESENTATIONS\
FINAL DRAFT OF RESEARCH PAPER DUE ON MAY 13th, AT 5PM IN MY OFFICE. NO
LATE PAPERS WILL BE ACCEPTED!