Kirsten
Wandschneider
Assistant Professor of Economics and IPE
Download the syllabus in PDF format: SYLLABUS
SCHEDULE OF READINGS:
WEEK 1
September 12: Introduction
September 14: What is International Finance?
· Dani Rodrik: "How far will International Economic Integration
Go?" Journal of Economic Perspectives, 2000 (J-STOR)
· Stanley Fisher: "Gloablization and Its Challenges"
American Economic Review, 2003 (available
online)
· Maurice Obstfeld, "The Global Capital Market: Benefactor
or Menace?" Journal of Economic Perspectives, Fall 1998 (J-STOR)
WEEK 2
September 19: Open Economy Macroeconomics
· Krugman/Obstfeld: Chapter 12, pp.278-291 (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 J-STOR)
September 21: Balance of Payments
· Krugman/Obstfeld: Chapter 12, pp.291-301
· "Adjustment in the World Economy" in Paul Krugman:
Currencies and Crises, 1992, pp.1-31 (distributed in class)
Homework 1 due at the beginning of class!
WEEK 3
September 26: Exchange Rates and Asset Prices
· Krugman/Obstfeld: Chapter 13, pp.306-323, Chapter 21, pp.576-585
· Martin Feldstein and Charles Horioka, "Domestic Saving and
International Capital Flows," Economic Journal, June 1980. (J-STOR)
September 28: Interest Parity and Efficiency of Global Capital Markets
· Krugman/Obstfeld: Chapter 13, pp.323-330, Chapter 21, pp.591-598
· Jeffrey Frankel, "Measuring International Capital Mobility,"
American Economic Review, May 1992. (J-STOR)
One page research proposal due at the beginning of class.
WEEK 4
October 3: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.
Homework 2 due at the beginning of class.
October 5: CASE STUDY 1 (distributed in class)
· 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)
WEEK 5
October 10: Money, Interest Rates 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.)
October 12: Price Levels and the Exchange Rate in the Long Run
· Krugman/Obstfeld: Chapter 15, pp.369-379
· "The Big Mac Index - Food For Thought" The Economist,
May 27, 2004 (avaliable online)
· Alan M. Taylor and Mark P. Taylor: "The Purchasing Power
Parity Debate" Journal of Economic Perspectives, Vol. 18, No. 4,
Fall 2004 (available online)
Homework 3 due at the beginning of class.
WEEK 6
October 17: Empirics and Problems of PPP
· Krugman/Obstfeld: Chapter 15, pp.379-399
· Penelopi Goldberg and Michael Knetter, "Goods Prices and
Exchange Rates: What Have We Learned?" Journal of Economic Literature,
September 1997. (J-STOR)
Homework 4 due at the beginning of class.
October 19: No Class! (Friday Schedule)
WEEK 7
October 24: Aggregate Demand in an Open Economy
· Krugman/Obstfeld, Chapter 16, pp.407-423
· "Of Congress, Cuts
and Currencies", The Economist, October 21, 1995
October 26: Asset Market and Open Economy Equilibrium
· Krugman and Obstfeld, Chapter 16 pp. 424-439
· 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 Fleming Model" (available
online) (This paper is a really nice overview of trends in international
macroeconomics.)
Homework 5 due at the beginning of class.
WEEK 8
October 31: MIDTERM EXAM IN CLASS!
November 2: Research Proposal Defense
At the Proposal Defense you will have to hand in a bibliography with at
least 10 scholarly articles pertaining to your paper topic.
WEEK 9
November 7: Fixed Exchange Rate Regimes and Foreign Exchange Intervention
· Krugman and Obstfeld, Chapter 17
· 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)
· Maurice Obstfeld and Kenneth Rogoff, "The Mirage of Fixed
Exchange Rates," Journal of Economic Perspectives, Fall 1995. (J-STOR)
November 9: Macro Policy and Coordination under Floating Rates
· Krugman and Obstfeld, Chapter 19
· Alberto Alesina and A. Wagner: "Choosing and Reneging on
Exchange Rate Regimes" NBER Working Paper 9809, 2003
Homework 6 due at the beginning of class.
WEEK 10
November 14: CASE STUDY 2
· Rüdiger Dornbusch: "A Primer on Emerging Market Crises"
NBER Working Paper 8326, 2001
· Paul Krugman: "Currency Crises" Mimeo, 1998 (available
online)
· Mishkin: "Global Financial Instability: Framework, Events,
Issues", Journal of Economic Perspectives, 1999 (J-STOR)
November 16: CASE STUDY 3
· 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)
· Stanley Fischer: "Exchange Rate Regimes: Is The Bipolar
View Correct?" Speech, January 2001 (available
online)
· Barry Eichengreen and R. Haussman: "Exchange Rates and Financial
Fragility" NBER Working
Paper 7418, 1999
WEEK 11
November 21: Developing Countries - FILM SCREENING: Life and Debt
· Krugman and Obstfeld, Chapter 22 pp.602-619
November 23: Thanksgiving Recess
WEEK 12
November 28: Reforming the World's Financial Architecture
· Krugman and Obstfeld, Chapter 22, 629-636
· Kenneth Rogoff, "International Institutions for Reducing
Global Financial Instability," Journal of Economic Perspectives,
Fall 1999. (J-STOR)
Research paper rough draft due at the beginning of class.
November 30: CASE STUDY 4
· Krugman and Obstfeld, Chapter 20
· Robert Mundell, "The Theory of Optimum Currency Areas,"
American Economic Review, 1961 (J-STOR)
WEEK 13
December 5: RESEARCH PAPER PRESENTATIONS
Peer review due at the beginning of class.
December 6: 7-10pm RESEARCH PAPER PRESENTATIONS
December 7: RESEARCH PAPER PRESENTATIONS
FINAL DRAFT OF RESEARCH PAPER DUE ON DECEMBER 16, AT 5PM IN MY OFFICE.
NO LATE PAPERS WILL BE ACCEPTED!