ECONOMICS
MACROECONOMICS IN THE GLOBAL ECONOMY

CD3 Outline                                                                            Course Structure Index

Goals

This course studies macroeconomic issues and policy in an open economy context. The objective is to facilitate students with functional frameworks to thoroughly understand macroeconomic arguments and use the theory for the analysis of the various international macroeconomic issues and events. The course covers foreign exchange market, balance of payments and adjustment, macroeconomic policy in the open economy, international monetary system and global capital market.

 The course is based on the assumption that students are familiar with macroeconomics at the undergraduate level. Students who need to review basic macroeconomics should read thoroughly Part I, II, and III of Dornbusch and Fischer or Eugene A. Duilio.

 To emphasize application and analytical skills, the lecture of the theories will be accompanied by empirical and case studies of current issues. Students are encouraged to participate in discusslons.

Topics Covered

 The module will start by briefly review the macroeconomic and policy concerns in a closed economy. Looking at the open economy, the module will cover balance of payments accounting, exchange rate and foreign exchange market, theories of exchange rate determination, macroeconomic policy and balance of payments adjustment under fixed and flexible exchange rates. The development of International monetary system and global capital market will also be discussed.

Key Books and Articles

 Paul Krugman and Maurice Obstfeld, International Economics: Theory and Policy, 3^rd edition, HarperCollins Publishers Inc., 1994.

 Dominique Salvatore, International Economics, 5th edition, Prentice Hall, 1995.

 Rudiger Dornbusch and Stanley Fischer, Macroeconomics, 6th edition, McGraw‑Hill Book Company, 1994. (DF)

 Eugene Diulio, Macroeconomic Theory, 2nd edition, Schaum's outline series, McGraw-Hill Book Company, 1990 (ED)

  Readings from journal articles will be assigned during the module.

Criteria for Evaluating Teaching and Student Performance

 The grade will be based on performance on the final exam, one essay, problem sets and class participation.