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| Module Availability |
| Spring |
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| Assessment Pattern |
| Unit(s) of Assessment |
Weighting Towards Module
Mark (%)
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| 2 hour Examination |
70
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| Coursework 1 |
10
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| Coursework 2 |
20
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Qualifying Condition(s)
A weighted aggregated mark of 40% is required to pass the module |
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| Module Overview |
| The module broadly covers two parts. In the first part we examine the foreign exchange market: we student the structure of the balance of payments in detail and analyse the determinants of the exchange rate in the short, medium and long-run; we examine the range of exchange reate policies that governments may pursue and highlight their implications for the accumulation of international reserves; we identify the potential triggers of currency crises and discuss policies that may reduce exchange rate pressures and loss of confidence. In the second part of the module, we discuss the macroeocnomic implications of certain policies in an open economic environment (e.g. examine the choice of exchange reate regimes and the mix of fiscal and monetary policies that are consistent with certain policy targets) and investigate the effects of external shocks under different exchange rate regimes |
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| Prerequisites/Co-requisites |
| None |
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| Module Aims |
| The aim of this course is to introduce the foreign exchange market and discuss the implications of particular government policies in an open economic environment |
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| Learning Outcomes |
On successful completion of this module you should be able to:-
- demonstrate a sound grasp of the workings of the foreign exchange (FX) market
- understand the models of exchange rate determination at different time horizons
- appreciate the role of government policy in the FX market
- discuss the reasons why some countries experience financial crises
- analyse the effectiveness of macroeconomic policies under different exchange rate regimes
- consider the effects of exogenous trade and financial account shocks
- argue in favour or against particular exchange rate arrangements
Transferable Skills:-
- essential training in the workings of an increasingly integrated world economy
- awareness of topical policy issues
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| Module Content |
The folloiwng is an indication of the likely topics to be covered:-
- balance of payments
- foreign exchange market
- purchasing power parity (PPP)
- covered interest parity (CIP)/uncovered interest parity (UIP)
- asset model
- monetary model
- exchange rate regimes
- global imbalances
- currency crises
- macro policies for open economies
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| Methods of Teaching/Learning |
| Lectures (11) |
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| Selected Texts/Journals |
Main text:
Pugel, T.A., International Economics, 2009, 14th edition, McGraw Hill
Additional resources:
King, P.G. & King S. K., International Economics, Globalisation and Policy, A reader, 2009, 5th edition, McGraw Hill
Krugman P.R. & Obsfeld M., International Economics: Theory and Policy, 2009, 8th edition, Pearson
Van Marrewijk C., International Economics: Theory, Application, and Policy, 2007, 1st edition, Oxford University Press |
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| Last Updated |
10 March 2011 |
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