The aim of the course is to present the main themes of international monetary macroeconomics. The course starts by laying out the way in which international relations are recorded in national accounts and balance of payments. In this way the course provides a framework for understanding the consequences for a country of running large current account surpluses or deficits.
The course then focuses on different theories of the determination of the exchange rates.
It also discusses the effects on the real economy and on the price levels of the commercial and financial relations of a country with the rest of the world.
The institutional set-up of the euro area will be presented in relation to the theories considered, emphasizing Its peculiarities with respect to the theoretical debates about the alternative between fixed and flexible exchange rates and about the question of the optimal currency areas.
All the topics will be analyzed trying to highlight the differences underlying the main theoretical models. The main official documents and economic reports published by national and international institutions on our country's international relations will also be analyzed.
The material covered is not mathematically complex, but it is taught in a formal and rigorous manner, which assumes a good familiarity with basic economic concepts.
The course then focuses on different theories of the determination of the exchange rates.
It also discusses the effects on the real economy and on the price levels of the commercial and financial relations of a country with the rest of the world.
The institutional set-up of the euro area will be presented in relation to the theories considered, emphasizing Its peculiarities with respect to the theoretical debates about the alternative between fixed and flexible exchange rates and about the question of the optimal currency areas.
All the topics will be analyzed trying to highlight the differences underlying the main theoretical models. The main official documents and economic reports published by national and international institutions on our country's international relations will also be analyzed.
The material covered is not mathematically complex, but it is taught in a formal and rigorous manner, which assumes a good familiarity with basic economic concepts.
Curriculum
teacher profile teaching materials
- International economics: the distinction between international trade theory and policy and the international monetary economy. Outline of the course.
Recording of economic and financial relations with foreign countries
- National accounting in an open economy
- Balance of payments
Exchange rates and foreign Exchange Markets. A portfolio approach
- Exchange rates and international transactions
- The foreign exchange market
- Demand for foreign currency assets
- Equilibrium in the foreign exchange market
- Interest rates, expectations and equilibrium
Money, interest rates and exchange rates
- Demand for Money
- Money supply and the determination of domestic rates of interest
- exchange rates in the short term
- Money, prices and exchange rate in the "long term".
- Inflation and exchange rate dynamics
- Critical considerations on the interpretation of the terms "short term" and "long term": the theoretical assumptions about the tendency to full employment
Long-term price level and exchange rate
- The law of one price
- Purchasing power parity: presentation and criticism
- A long-run exchange rate model based on PPP
- Empirical evidence on PPP and the law of one price.
- Explaining of the problems related to PPP.
- Beyond PPP: a "general" long-term model for exchange rates
Output and exchange rate in the short-run
- Output market equilibrium in an open economy in the short run (The DD curve)
- Asset Market equilibrium in the short run (the AA curve)
- Short-run equilibrium in open economy: putting DD and AA together
- Temporary changes in monetary and fiscal policies
- Permanent shifts in monetary and fiscal policies
- Macroeconomic policies and the current account
- The J curve and Marshall-Lerner condition
- The liquidity trap in the open economy
Fixed exchange rates and foreign exchange intervention
- Why study fixed exchange rates
- Central Bank intervention and the money supply
- How the central bank fixes the exchange rate
- Balance of payments crises and capital flight
- Managed floating and sterilized intervention
- Reserve currencies in the international monetary system
- The Gold Standard
The International Monetary System: a historical overview
- Macroeconomic policy goals in an open economy
- Classifying monetary systems: the open economy trilemma
- International macroeconomic policy under the Gold Standard, 1870-1914
- The years between the two wars (1918-1939)
- The Bretton Woods system and the International Monetary Fund
- Analyzing economic policy options for reaching internal and external balance
- The problem of the external balance of the United States in the Bretton Woods system
- the mechanism of imported inflation
- The case for floating exchange rates
- Macroeconomic interdependence under floating exchange rate regime
- What has been learned since 1973?
- Are fixed exchange rates even an option for most countries?
Optimal currency areas and European experience
- The evolution of the single European currency
- The euro and the economic policy of the euro zone
- The theory of optimum currency areas
- The future of EMU
- The crises of Balance of payments within the euro area
Mutuazione: 21201503 ECONOMIA INTERNAZIONALE in Scienze Economiche LM-56 TREZZINI ATTILIO
Programme
Introduction- International economics: the distinction between international trade theory and policy and the international monetary economy. Outline of the course.
Recording of economic and financial relations with foreign countries
- National accounting in an open economy
- Balance of payments
Exchange rates and foreign Exchange Markets. A portfolio approach
- Exchange rates and international transactions
- The foreign exchange market
- Demand for foreign currency assets
- Equilibrium in the foreign exchange market
- Interest rates, expectations and equilibrium
Money, interest rates and exchange rates
- Demand for Money
- Money supply and the determination of domestic rates of interest
- exchange rates in the short term
- Money, prices and exchange rate in the "long term".
- Inflation and exchange rate dynamics
- Critical considerations on the interpretation of the terms "short term" and "long term": the theoretical assumptions about the tendency to full employment
Long-term price level and exchange rate
- The law of one price
- Purchasing power parity: presentation and criticism
- A long-run exchange rate model based on PPP
- Empirical evidence on PPP and the law of one price.
- Explaining of the problems related to PPP.
- Beyond PPP: a "general" long-term model for exchange rates
Output and exchange rate in the short-run
- Output market equilibrium in an open economy in the short run (The DD curve)
- Asset Market equilibrium in the short run (the AA curve)
- Short-run equilibrium in open economy: putting DD and AA together
- Temporary changes in monetary and fiscal policies
- Permanent shifts in monetary and fiscal policies
- Macroeconomic policies and the current account
- The J curve and Marshall-Lerner condition
- The liquidity trap in the open economy
Fixed exchange rates and foreign exchange intervention
- Why study fixed exchange rates
- Central Bank intervention and the money supply
- How the central bank fixes the exchange rate
- Balance of payments crises and capital flight
- Managed floating and sterilized intervention
- Reserve currencies in the international monetary system
- The Gold Standard
The International Monetary System: a historical overview
- Macroeconomic policy goals in an open economy
- Classifying monetary systems: the open economy trilemma
- International macroeconomic policy under the Gold Standard, 1870-1914
- The years between the two wars (1918-1939)
- The Bretton Woods system and the International Monetary Fund
- Analyzing economic policy options for reaching internal and external balance
- The problem of the external balance of the United States in the Bretton Woods system
- the mechanism of imported inflation
- The case for floating exchange rates
- Macroeconomic interdependence under floating exchange rate regime
- What has been learned since 1973?
- Are fixed exchange rates even an option for most countries?
Optimal currency areas and European experience
- The evolution of the single European currency
- The euro and the economic policy of the euro zone
- The theory of optimum currency areas
- The future of EMU
- The crises of Balance of payments within the euro area
Core Documentation
P. Krugman, M. Obstfeld, M. Melitz, Economia internazionale 2 - Economia monetaria internazionale, Undicesima Edizione Pearson, 2020.Type of delivery of the course
Frontal lectures and training sessionsAttendance
Not compulsoryType of evaluation
Oral examination teacher profile teaching materials
- International economics: the distinction between international trade theory and policy and the international monetary economy. Outline of the course.
Recording of economic and financial relations with foreign countries
- National accounting in an open economy
- Balance of payments
Exchange rates and foreign Exchange Markets. A portfolio approach
- Exchange rates and international transactions
- The foreign exchange market
- Demand for foreign currency assets
- Equilibrium in the foreign exchange market
- Interest rates, expectations and equilibrium
Money, interest rates and exchange rates
- Demand for Money
- Money supply and the determination of domestic rates of interest
- exchange rates in the short term
- Money, prices and exchange rate in the "long term".
- Inflation and exchange rate dynamics
- Critical considerations on the interpretation of the terms "short term" and "long term": the theoretical assumptions about the tendency to full employment
Long-term price level and exchange rate
- The law of one price
- Purchasing power parity: presentation and criticism
- A long-run exchange rate model based on PPP
- Empirical evidence on PPP and the law of one price.
- Explaining of the problems related to PPP.
- Beyond PPP: a "general" long-term model for exchange rates
Output and exchange rate in the short-run
- Output market equilibrium in an open economy in the short run (The DD curve)
- Asset Market equilibrium in the short run (the AA curve)
- Short-run equilibrium in open economy: putting DD and AA together
- Temporary changes in monetary and fiscal policies
- Permanent shifts in monetary and fiscal policies
- Macroeconomic policies and the current account
- The J curve and Marshall-Lerner condition
- The liquidity trap in the open economy
Fixed exchange rates and foreign exchange intervention
- Why study fixed exchange rates
- Central Bank intervention and the money supply
- How the central bank fixes the exchange rate
- Balance of payments crises and capital flight
- Managed floating and sterilized intervention
- Reserve currencies in the international monetary system
- The Gold Standard
The International Monetary System: a historical overview
- Macroeconomic policy goals in an open economy
- Classifying monetary systems: the open economy trilemma
- International macroeconomic policy under the Gold Standard, 1870-1914
- The years between the two wars (1918-1939)
- The Bretton Woods system and the International Monetary Fund
- Analyzing economic policy options for reaching internal and external balance
- The problem of the external balance of the United States in the Bretton Woods system
- the mechanism of imported inflation
- The case for floating exchange rates
- Macroeconomic interdependence under floating exchange rate regime
- What has been learned since 1973?
- Are fixed exchange rates even an option for most countries?
Optimal currency areas and European experience
- The evolution of the single European currency
- The euro and the economic policy of the euro zone
- The theory of optimum currency areas
- The future of EMU
- The crises of Balance of payments within the euro area
Mutuazione: 21201503 ECONOMIA INTERNAZIONALE in Scienze Economiche LM-56 TREZZINI ATTILIO
Programme
Introduction- International economics: the distinction between international trade theory and policy and the international monetary economy. Outline of the course.
Recording of economic and financial relations with foreign countries
- National accounting in an open economy
- Balance of payments
Exchange rates and foreign Exchange Markets. A portfolio approach
- Exchange rates and international transactions
- The foreign exchange market
- Demand for foreign currency assets
- Equilibrium in the foreign exchange market
- Interest rates, expectations and equilibrium
Money, interest rates and exchange rates
- Demand for Money
- Money supply and the determination of domestic rates of interest
- exchange rates in the short term
- Money, prices and exchange rate in the "long term".
- Inflation and exchange rate dynamics
- Critical considerations on the interpretation of the terms "short term" and "long term": the theoretical assumptions about the tendency to full employment
Long-term price level and exchange rate
- The law of one price
- Purchasing power parity: presentation and criticism
- A long-run exchange rate model based on PPP
- Empirical evidence on PPP and the law of one price.
- Explaining of the problems related to PPP.
- Beyond PPP: a "general" long-term model for exchange rates
Output and exchange rate in the short-run
- Output market equilibrium in an open economy in the short run (The DD curve)
- Asset Market equilibrium in the short run (the AA curve)
- Short-run equilibrium in open economy: putting DD and AA together
- Temporary changes in monetary and fiscal policies
- Permanent shifts in monetary and fiscal policies
- Macroeconomic policies and the current account
- The J curve and Marshall-Lerner condition
- The liquidity trap in the open economy
Fixed exchange rates and foreign exchange intervention
- Why study fixed exchange rates
- Central Bank intervention and the money supply
- How the central bank fixes the exchange rate
- Balance of payments crises and capital flight
- Managed floating and sterilized intervention
- Reserve currencies in the international monetary system
- The Gold Standard
The International Monetary System: a historical overview
- Macroeconomic policy goals in an open economy
- Classifying monetary systems: the open economy trilemma
- International macroeconomic policy under the Gold Standard, 1870-1914
- The years between the two wars (1918-1939)
- The Bretton Woods system and the International Monetary Fund
- Analyzing economic policy options for reaching internal and external balance
- The problem of the external balance of the United States in the Bretton Woods system
- the mechanism of imported inflation
- The case for floating exchange rates
- Macroeconomic interdependence under floating exchange rate regime
- What has been learned since 1973?
- Are fixed exchange rates even an option for most countries?
Optimal currency areas and European experience
- The evolution of the single European currency
- The euro and the economic policy of the euro zone
- The theory of optimum currency areas
- The future of EMU
- The crises of Balance of payments within the euro area
Core Documentation
P. Krugman, M. Obstfeld, M. Melitz, Economia internazionale 2 - Economia monetaria internazionale, Undicesima Edizione Pearson, 2020.Type of delivery of the course
Frontal lectures and training sessionsAttendance
Not compulsoryType of evaluation
Oral examination teacher profile teaching materials
- International economics: the distinction between international trade theory and policy and the international monetary economy. Outline of the course.
Recording of economic and financial relations with foreign countries
- National accounting in an open economy
- Balance of payments
Exchange rates and foreign Exchange Markets. A portfolio approach
- Exchange rates and international transactions
- The foreign exchange market
- Demand for foreign currency assets
- Equilibrium in the foreign exchange market
- Interest rates, expectations and equilibrium
Money, interest rates and exchange rates
- Demand for Money
- Money supply and the determination of domestic rates of interest
- exchange rates in the short term
- Money, prices and exchange rate in the "long term".
- Inflation and exchange rate dynamics
- Critical considerations on the interpretation of the terms "short term" and "long term": the theoretical assumptions about the tendency to full employment
Long-term price level and exchange rate
- The law of one price
- Purchasing power parity: presentation and criticism
- A long-run exchange rate model based on PPP
- Empirical evidence on PPP and the law of one price.
- Explaining of the problems related to PPP.
- Beyond PPP: a "general" long-term model for exchange rates
Output and exchange rate in the short-run
- Output market equilibrium in an open economy in the short run (The DD curve)
- Asset Market equilibrium in the short run (the AA curve)
- Short-run equilibrium in open economy: putting DD and AA together
- Temporary changes in monetary and fiscal policies
- Permanent shifts in monetary and fiscal policies
- Macroeconomic policies and the current account
- The J curve and Marshall-Lerner condition
- The liquidity trap in the open economy
Fixed exchange rates and foreign exchange intervention
- Why study fixed exchange rates
- Central Bank intervention and the money supply
- How the central bank fixes the exchange rate
- Balance of payments crises and capital flight
- Managed floating and sterilized intervention
- Reserve currencies in the international monetary system
- The Gold Standard
The International Monetary System: a historical overview
- Macroeconomic policy goals in an open economy
- Classifying monetary systems: the open economy trilemma
- International macroeconomic policy under the Gold Standard, 1870-1914
- The years between the two wars (1918-1939)
- The Bretton Woods system and the International Monetary Fund
- Analyzing economic policy options for reaching internal and external balance
- The problem of the external balance of the United States in the Bretton Woods system
- the mechanism of imported inflation
- The case for floating exchange rates
- Macroeconomic interdependence under floating exchange rate regime
- What has been learned since 1973?
- Are fixed exchange rates even an option for most countries?
Optimal currency areas and European experience
- The evolution of the single European currency
- The euro and the economic policy of the euro zone
- The theory of optimum currency areas
- The future of EMU
- The crises of Balance of payments within the euro area
Programme
Introduction- International economics: the distinction between international trade theory and policy and the international monetary economy. Outline of the course.
Recording of economic and financial relations with foreign countries
- National accounting in an open economy
- Balance of payments
Exchange rates and foreign Exchange Markets. A portfolio approach
- Exchange rates and international transactions
- The foreign exchange market
- Demand for foreign currency assets
- Equilibrium in the foreign exchange market
- Interest rates, expectations and equilibrium
Money, interest rates and exchange rates
- Demand for Money
- Money supply and the determination of domestic rates of interest
- exchange rates in the short term
- Money, prices and exchange rate in the "long term".
- Inflation and exchange rate dynamics
- Critical considerations on the interpretation of the terms "short term" and "long term": the theoretical assumptions about the tendency to full employment
Long-term price level and exchange rate
- The law of one price
- Purchasing power parity: presentation and criticism
- A long-run exchange rate model based on PPP
- Empirical evidence on PPP and the law of one price.
- Explaining of the problems related to PPP.
- Beyond PPP: a "general" long-term model for exchange rates
Output and exchange rate in the short-run
- Output market equilibrium in an open economy in the short run (The DD curve)
- Asset Market equilibrium in the short run (the AA curve)
- Short-run equilibrium in open economy: putting DD and AA together
- Temporary changes in monetary and fiscal policies
- Permanent shifts in monetary and fiscal policies
- Macroeconomic policies and the current account
- The J curve and Marshall-Lerner condition
- The liquidity trap in the open economy
Fixed exchange rates and foreign exchange intervention
- Why study fixed exchange rates
- Central Bank intervention and the money supply
- How the central bank fixes the exchange rate
- Balance of payments crises and capital flight
- Managed floating and sterilized intervention
- Reserve currencies in the international monetary system
- The Gold Standard
The International Monetary System: a historical overview
- Macroeconomic policy goals in an open economy
- Classifying monetary systems: the open economy trilemma
- International macroeconomic policy under the Gold Standard, 1870-1914
- The years between the two wars (1918-1939)
- The Bretton Woods system and the International Monetary Fund
- Analyzing economic policy options for reaching internal and external balance
- The problem of the external balance of the United States in the Bretton Woods system
- the mechanism of imported inflation
- The case for floating exchange rates
- Macroeconomic interdependence under floating exchange rate regime
- What has been learned since 1973?
- Are fixed exchange rates even an option for most countries?
Optimal currency areas and European experience
- The evolution of the single European currency
- The euro and the economic policy of the euro zone
- The theory of optimum currency areas
- The future of EMU
- The crises of Balance of payments within the euro area
Core Documentation
P. Krugman, M. Obstfeld, M. Melitz, Economia internazionale 2 - Economia monetaria internazionale, Undicesima Edizione Pearson, 2020.Type of delivery of the course
Frontal lectures and training sessionsAttendance
Not compulsoryType of evaluation
Oral examination teacher profile teaching materials
- International economics: the distinction between international trade theory and policy and the international monetary economy. Outline of the course.
Recording of economic and financial relations with foreign countries
- National accounting in an open economy
- Balance of payments
Exchange rates and foreign Exchange Markets. A portfolio approach
- Exchange rates and international transactions
- The foreign exchange market
- Demand for foreign currency assets
- Equilibrium in the foreign exchange market
- Interest rates, expectations and equilibrium
Money, interest rates and exchange rates
- Demand for Money
- Money supply and the determination of domestic rates of interest
- exchange rates in the short term
- Money, prices and exchange rate in the "long term".
- Inflation and exchange rate dynamics
- Critical considerations on the interpretation of the terms "short term" and "long term": the theoretical assumptions about the tendency to full employment
Long-term price level and exchange rate
- The law of one price
- Purchasing power parity: presentation and criticism
- A long-run exchange rate model based on PPP
- Empirical evidence on PPP and the law of one price.
- Explaining of the problems related to PPP.
- Beyond PPP: a "general" long-term model for exchange rates
Output and exchange rate in the short-run
- Output market equilibrium in an open economy in the short run (The DD curve)
- Asset Market equilibrium in the short run (the AA curve)
- Short-run equilibrium in open economy: putting DD and AA together
- Temporary changes in monetary and fiscal policies
- Permanent shifts in monetary and fiscal policies
- Macroeconomic policies and the current account
- The J curve and Marshall-Lerner condition
- The liquidity trap in the open economy
Fixed exchange rates and foreign exchange intervention
- Why study fixed exchange rates
- Central Bank intervention and the money supply
- How the central bank fixes the exchange rate
- Balance of payments crises and capital flight
- Managed floating and sterilized intervention
- Reserve currencies in the international monetary system
- The Gold Standard
The International Monetary System: a historical overview
- Macroeconomic policy goals in an open economy
- Classifying monetary systems: the open economy trilemma
- International macroeconomic policy under the Gold Standard, 1870-1914
- The years between the two wars (1918-1939)
- The Bretton Woods system and the International Monetary Fund
- Analyzing economic policy options for reaching internal and external balance
- The problem of the external balance of the United States in the Bretton Woods system
- the mechanism of imported inflation
- The case for floating exchange rates
- Macroeconomic interdependence under floating exchange rate regime
- What has been learned since 1973?
- Are fixed exchange rates even an option for most countries?
Optimal currency areas and European experience
- The evolution of the single European currency
- The euro and the economic policy of the euro zone
- The theory of optimum currency areas
- The future of EMU
- The crises of Balance of payments within the euro area
Mutuazione: 21201503 ECONOMIA INTERNAZIONALE in Scienze Economiche LM-56 TREZZINI ATTILIO
Programme
Introduction- International economics: the distinction between international trade theory and policy and the international monetary economy. Outline of the course.
Recording of economic and financial relations with foreign countries
- National accounting in an open economy
- Balance of payments
Exchange rates and foreign Exchange Markets. A portfolio approach
- Exchange rates and international transactions
- The foreign exchange market
- Demand for foreign currency assets
- Equilibrium in the foreign exchange market
- Interest rates, expectations and equilibrium
Money, interest rates and exchange rates
- Demand for Money
- Money supply and the determination of domestic rates of interest
- exchange rates in the short term
- Money, prices and exchange rate in the "long term".
- Inflation and exchange rate dynamics
- Critical considerations on the interpretation of the terms "short term" and "long term": the theoretical assumptions about the tendency to full employment
Long-term price level and exchange rate
- The law of one price
- Purchasing power parity: presentation and criticism
- A long-run exchange rate model based on PPP
- Empirical evidence on PPP and the law of one price.
- Explaining of the problems related to PPP.
- Beyond PPP: a "general" long-term model for exchange rates
Output and exchange rate in the short-run
- Output market equilibrium in an open economy in the short run (The DD curve)
- Asset Market equilibrium in the short run (the AA curve)
- Short-run equilibrium in open economy: putting DD and AA together
- Temporary changes in monetary and fiscal policies
- Permanent shifts in monetary and fiscal policies
- Macroeconomic policies and the current account
- The J curve and Marshall-Lerner condition
- The liquidity trap in the open economy
Fixed exchange rates and foreign exchange intervention
- Why study fixed exchange rates
- Central Bank intervention and the money supply
- How the central bank fixes the exchange rate
- Balance of payments crises and capital flight
- Managed floating and sterilized intervention
- Reserve currencies in the international monetary system
- The Gold Standard
The International Monetary System: a historical overview
- Macroeconomic policy goals in an open economy
- Classifying monetary systems: the open economy trilemma
- International macroeconomic policy under the Gold Standard, 1870-1914
- The years between the two wars (1918-1939)
- The Bretton Woods system and the International Monetary Fund
- Analyzing economic policy options for reaching internal and external balance
- The problem of the external balance of the United States in the Bretton Woods system
- the mechanism of imported inflation
- The case for floating exchange rates
- Macroeconomic interdependence under floating exchange rate regime
- What has been learned since 1973?
- Are fixed exchange rates even an option for most countries?
Optimal currency areas and European experience
- The evolution of the single European currency
- The euro and the economic policy of the euro zone
- The theory of optimum currency areas
- The future of EMU
- The crises of Balance of payments within the euro area
Core Documentation
P. Krugman, M. Obstfeld, M. Melitz, Economia internazionale 2 - Economia monetaria internazionale, Undicesima Edizione Pearson, 2020.Type of delivery of the course
Frontal lectures and training sessionsAttendance
Not compulsoryType of evaluation
Oral examination