Laurea Magistrale in Economia dei Mercati e degli Intermediari Finanziari

LEARNING OUTCOMES: The course analyses advanced topics in international monetary economics. Graduates acquire qualified methodological and professional skills to assess in a critical way the policy making process in an international context. The course offers a compendium between case-studies and the theory of international economics and international finance. Special attention will be devoted topics such as the theory of financial, debt and currency crises and the recent US subprime crisis; we will focus in particular on the relationship between liquidity and banks leverage and its effect on macroeconomic risk and the business cycle. The course will also look at sovereign debt crisis, especially in the European context.


KNOWLEDGE AND UNDERSTANDING: Knowledge of the main topics in international economics and international monetary economics; analysis of the exchange rate regimes, of the main rules governing the international financial markets, of the economic consequences of the international exchange rate crises, financial crises and debt crises. Analysis the subrpime and pandemic crises. Conventional and unconventional monetary policies response.
Students have to understand the analytical models presented during the lectures and develop the capacity to analyse an economic problem and elaborate a policy solution. Students have to address the main economic issues in the light of the main theories in international economics and to develop their own original research ideas.




APPLYING KNOWLEDGE AND UNDERSTANDING:

The notions, concepts and theoretical models learned allow to understand in a clearer and more organic way the reasons for international crises and the foundations and implications of the processes of integration of markets and real economies always in an international context and to be able to formulate proposals concrete policies. What has been learned can be used in new fields and in a working context in the management of relations with international institutions, with central banks, research divisions within international bodies, etc.



MAKING JUDGEMENTS: Ability to understand the main topics issues in international economics and address them in order to inform policy. The notions acquired during the lectures can be used to assess in a critical way the policy making process in an international context.


COMMUNICATION SKILLS: Ability to present the main economic ideas in international economics and the policy decision making process in a rigorous way to specialised and non-specialised audiences.


LEARNING SKILLS: At end of the course the students should have acquired the ability to analyse and assess in a critical way the main economic events in an international context. They are expected to be able to read and understand in a deep critical way the main articles and papers published in the area of international economics and international monetary economics and to be able to elaborate autonomously new research ideas.

Macroeconomics, international economics. Knowledge of macro-economic models (IS-LM) in closed and open economy (IS-LM-BP and Mundell-Fleming). Knowledge of the fundamentals of international economics (fixed/flexible exchange rates), purchasing power parity, uncovered interest parity.

6 CFU (36 ore) divided as follows:

Introduction

Part 1: Balance of Payments Theory and Practice

1. The Foreign Exchange System
2. The Balance of Payments
3. Elasticity and Absorption Approaches to the Balance of Payments
4. Macroeconomic Policy in an Open Economy
5. The Monetary Approach to the Balance of Payments

Part 2: Exchange Rate Determination: Theory, Evidence and Policy

6. Purchasing Power Parity Theory and Floating Exchange Rate Experience
7. Modern Models of Exchange Rate Determination
8. The Portfolio Balance Model
9. Empirical Evidence on Exchange Rates
10. Fixed, Floating and Managed Exchange Rates

Part 3: The Post-war International Monetary System

11. The International Monetary System
12. The Eurocurrency and Eurobond Markets
13. Currency Derivatives: Futures, Options and Swaps
14. International Macroeconomic Policy Coordination
15. The Latin American Debt Crisis
16. The European Monetary System and European Monetary Union
17. Currency Crises and the East Asian Financial Crisis
18. Financial Innovation and the Credit Crunch

Material: the slides and the material used for the course will be available on the course website

Pilbeam Keith (2023), International Finance, 5th Edition, Bloomsbury Publishing.

Material related to lectures and the reading list will be provided on the course web page.

Krugman Paul and Maurice Obstfeld (2018), International Economics: Theory and Policy, 11th Edition, Boston, MA: Addison Wesley.

Classroom Lectures; Laboratory sessions, Seminars, Workshops and students’ discussions on specific projects works individually assigned
Lessons focused on problem-solving
Searching of additional dedicated materials in the library and on-line
Analysis of referred readings and textbooks
Studying suggested articles and readings

Discussions and interactive participation during the course.

Final written exam in which questions are formulated to ascertain whether the student is able to use the acquired knowledge to understand the proposed problems. Assessment in the final examination of the student's ability for critical analysis and to draw conclusions.
The score of the exam is awarded by means of a mark expressed out of thirty. Criteria for the formulation of the judgment expressed in thirtieths:

o Unsuitable: significant deficiencies and/or inaccuracies in knowledge, and
comprehension of topics

o 18-20: knowledge and comprehension of the topics just sufficient with
possible imperfections.

o 21-23: Knowledge and comprehension of routine topics.

o 24-26: Fair knowledge and understanding of the topics.

o 27-29: Comprehensive knowledge and understanding of the topics.

o 30-30L: Excellent level of knowledge and understanding of the topics.

Students who withdraw or fail the exam may take the exam again in the same exam session.