ECON 443
International Monetary Theory and Policy
1. Catalog Entry
ECON 443
International Monetary Theory and Policy
Credit hours (3)
Prerequisites: ECON 205, ECON 206, and ECON 305
An examination of the determinants of a nation’s balance of payments, exchange rate determination, implications of various exchange rate regimes for domestic stabilization policies and the international coordination of monetary and stabilization policies.
2. Detailed Description of Course
Economic interdependence and globalization have become the norm. Economies have become so interconnected that events and policies in one part of the world have global effects. The goal of this course is to explore the unique challenges and opportunities posed by these connections and to generate an understanding of many key events that shape both the domestic and international economic environment. The theory presented in this course covers a broad range of topics including exchange rate determination, monetary and fiscal policy in an open economy, balance of payment issues, the choice of exchange rate systems, and international debt. These theories will be applied to the world so that students may assess the success and failures of international monetary regimes, systems, and policies in the context of economic growth and economic crises.
Topic Outline
1) Introduction to International Macroeconomics
2) Exchange Rates
3) The Balance of Payments
4) Applications of Fiscal and Monetary Policies
5) Fixed vs Floating Exchange Rates
6) Alternative Monetary Arrangements
3. Detailed Description of Conduct of Course
The following teaching strategies may be employed:
Lectures, class discussion, written assignments, oral presentations, exams, or course homework.
4. Goals and Objectives of the Course
After successfully completing this course, students will be able to:
1) Discuss the nature, organization, and functions of the foreign exchange market; the forward market and its relationship to the spot market; and the Eurodollar.
2) Analyze the balance of payments of a country’s economic transactions with the rest of the world.
3) Discuss the behavior of U.S. trade balance, the international investment position, and the U.S. foreign debt. (SLO7)
4) Discuss the effects of exchange-rate changes on the balance-of-payment and trade.
5) Explain how to extend the analysis of exchange-rate changes to price level changes under fixed exchange rates.
6) Compare and contrast flexible and fixed exchange rate regimes.
7) Discuss types, general principles, and problems of the International Monetary System.
8) Analyze how changes in economic variable throughout the world affect the national economy. (SLO7)
9) Analyze how changes in macroeconomic variable (e.g., consumption, business investment, government spending, or foreign trade) affect the national economy. (SLO5)
5. Assessment Measures
May include exams and a research paper.
6. Other Course Information
None
Review and Approval
September 2, 2014
December 2013 C. Vehorn
April 16, 2012
December 2004 N. Hashemzadeh, Chair