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General information |
Course unit name: International Financial Economics
Course unit code: 568960
Academic year: 2021-2022
Coordinator: Marta Gomez Puig
Department: Department of Economics
Credits: 5
Single program: S
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Estimated learning time |
Total number of hours 125 |
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Face-to-face and/or online activities |
45 |
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- Lecture with practical component |
Face-to-face |
45 |
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Supervised project |
40 |
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Independent learning |
40 |
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Competences to be gained during study |
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—Capacity to analyse, design and assess actuarial and financial products.
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Learning objectives |
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Referring to knowledge — To identify the behaviour of exchange rates and the price of a financial asset.
Referring to abilities, skills — To analyse the relationships between variations in exchange rate, interest rate and price level in an economy.
Referring to attitudes, values and norms — To become familiar with the mechanisms of integration and interconnection of international financial markets. |
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Teaching blocks |
1. Foreign exchange markets and the nature of exchange rates
1.1. Characteristics of foreign exchange markets
1.2. Nature of exchange rates
2. Exchange rates and interest rates (I): covered interest rate parity
2.1. Expression of the forward exchange rate
2.2. Covered interest rate parity
2.3. Use of the futures market as a means of cover
3. Exchange rates and interest rates (II): uncovered interest rate parity
3.1. Uncovered interest arbitrage
3.2. Effect of expectations on the current interest rate
3.3. Empirical evidence of the efficiency of currency markets
4. Exchange rate and price level
4.1. Absolute and relative purchasing power parity (PPP)
4.2. Applications of PPP: real exchange rate as a measure of competitiveness
4.3. Empirical evidence and criticism of PPP
4.4. Relationship between uncovered interest rate parity and the PPP: the Fisher effect
4.5. PPP deviations: the Balassa-Samuelson model
5. Models for determining exchange rates
5.1. Monetary focus
5.2. Assets focus
6. Exchange-rate regimes
6.1. Central bank interventions and the functioning of fixed interest rates
6.2. The trilemma of open economies
6.3. De jure and de facto exchange-rate regimes
6.4. Costs and benefits of fixed interest rates
6.5. Factors that influence the choice of optimum exchange-rate regimes
7. Monetary unions and the European experience: the Economic and Monetary Union of the European Union
7.1. Exchange rate unions vs. fixed interest rate regimes
7.2. Criteria for establishing optimum currency areas
7.3. The European experience
8. Crisis in the Eurozone
8.1. The history and politics of the Euro
8.2. Tensions in the Eurozone in tranquil times: 1999-2007
8.3. Public debt crisis in the Eurozone
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Teaching methods and general organization |
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The course involves a combination of theoretical and practical classes, in which students complete exercises to develop their understanding of the analytical instruments under study. In addition, via the Virtual Campus, students will be given compulsory reading material relating to the topics studied during the course. |
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Official assessment of learning outcomes |
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Continuous assessment of all master’s degree subjects must include a final examination. Therefore, the continuous assessment of International Financial Economics will be comprised of:
Examination-based assessment For students who have withdrawn from continuous assessment, the final examination will be worth 100%.
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Reading and study resources |
Consulteu la disponibilitat a CERCABIB
Book
Feenstra, R.C i A.M. Taylor. "Macroeconomía Internacional". Editorial Reverté, 2012.
Krugman, P.R. i M.Obstfeld. "Economía Internacional: Teoría y Política". Addison Wesley Publishers, 10a edició, 2016.