Teaching plan for the course unit

 

 

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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

 

 

Estimated learning time

Total number of hours 125

 

Face-to-face and/or online activities

45

 

-  Lecture with practical component

Face-to-face

 

45

Supervised project

40

Independent learning

40

 

 

Competences to be gained during study

 

—Capacity to analyse, design and assess actuarial and financial products.

—Capacity to understand the specific business, legal and accounting conditions of insurance and financial entities.

—Capacity to classify and measure actuarial, financial and investment risks, and to take related decisions.

— Knowledge forming the basis of original thinking in the development and/or application of ideas, typically in a research context.

 

 

 

 

Learning objectives

 

Referring to knowledge

— To identify the behaviour of exchange rates and the price of a financial asset.
— To study the main short- and long-term models for determining exchange rates.
— To recognise exchange rate regimes: de jure and de facto.

 

Referring to abilities, skills

— To analyse the relationships between variations in exchange rate, interest rate and price level in an economy.
— To apply the theory of optimum currency areas to the context of the Economic and Monetary Union of the European Union.

 

Referring to attitudes, values and norms

— To become familiar with the mechanisms of integration and interconnection of international financial markets.

 

 

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 

 

 

Teaching methods and general organization

 

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. 

 

 

Official assessment of learning outcomes

 

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:

a) Marks for practical classes (10%).
b) Mark for the continuous assessment test (30%).
c) Mark for the final examination (60%).

 

Examination-based assessment

For students who have withdrawn from continuous assessment, the final examination will be worth 100%.

Repeat assessment consists of an examination with the same characteristics as the single assessment examination.

 

 

Reading and study resources

Consulteu la disponibilitat a CERCABIB

Book

Feenstra, R.C i A.M. Taylor. "Macroeconomía Internacional". Editorial Reverté, 2012.

Catāleg UB  Enllaç

Krugman, P.R. i M.Obstfeld. "Economía Internacional: Teoría y Política". Addison Wesley Publishers, 10a edició, 2016.

Catāleg UB  Enllaç