ECON 324 International Monetary Relations
Spring 2016
LOYOLA UNIVERSITY
Rome Center
Economics Department
International Monetary Relations (ECON 324)
TR 2:20pm – 3:35pm
Spring 2016 Syllabus
I. GENERAL INFORMATION
Instructor: Marshall Langer
Office hours: By appointment (convenient times: TR 5:00 – 6:00pm)
Telephone: +39 347.1763096
Email: mlanger11@gmail.com
Background: Wall Street; corporate management, economic analysis, strategic planning. Wharton MBA.
II. COURSE INFORMATION
1. Course Description. In this course students assess theories of international monetary relations (often termed by economists as international macroeconomics). Topics covered include international trade, monetary theory, international finance, foreign exchange markets, balance of payments (and trade deficits), capital mobility, government fiscal and monetary policies, international macroeconomic cooperation, economic crises, and the role of international institutions.
The course is divided into 4 distinct parts, as follows:
Part 1. International Macroeconomics
Part 2. Foreign Exchange
Part 3. International Trade
Part 4. Sovereign Risk Assessment
2. Learning Objectives.
- Develop accurate assessments of foreign economic environments.
- Craft analyses that illuminate macroeconomic realities affecting international monetary relations.
- Think more critically and more strategically globally in a business and economic context.
- Hone sensitivity skills required to succeed in multinational business environments.
III. LEARNING ACTIVITIES
1. Interactive class discussion. Classes are highly interactive. Instructor prompts students for response to questions posed and solicits his/her thoughts on issues discussed. Format is probing and direct. Additionally, instructor provides concrete, real-world examples to illustrate concepts. Lecture format reinforces by example appropriate methods for asking questions, gaining relevant insights, and making appropriate recommendation. (Contributes to Learning Objectives A, B, C, D)
2. Presentation of textbook readings. Textbook and other assigned readings (assigned according to the schedule in section VIII of this syllabus) present relevant topics, which are covered more depthfully in class lecture. In class discussion of readings, instructor highlights most relevant reading topics and shows by example how to present data in a stimulating way, consistent with achieving course objectives. (Contributes to Learning Objectives A, B, C)
3. Case Study and/or Article Presentation. Case studies and articles are used to further illustrate real-world examples of subject topics. For all assigned cases/articles, students should be prepared to answer questions about the case/article and be able to illustrate its subtler aspects. For select cases/articles an individual written submission is due. For select cases/articles students will be selected to make a presentation. In class discussion of case studies/articles serves to highlight analytical methods, indicating specifically, ways to discern the most relevant focal points. (Contributes to Learning Objectives A, B, C, D)
IV. ASSESSMENT
40% Midterm exam
45% Final exam
5% Presentation of case study, article
10% Quizzes and class participation
1. Exams. Exams will be composed of essay questions that test your ability to apply concepts discussed through the exam date. (Measures Learning Objectives A, B, C)
2. Case/Article Analyses. All cases/articles should be prepared for class. For select cases/articles, where indicated, an individual written submission is due and is assigned based on the schedule in section VIII of this syllabus. Additionally, for select cases/articles students will be selected to make a presentation. Your grade for the presentation will reflect much new insight you teach the class (rather than repeat the facts). (Measures Learning Objectives A, B, C)
3. Quizzes. Short, in-class quizzes will test your comprehension of course materials to date. (Measures Learning Objectives A, B, C)
4. Class Participation. You will be graded on the quality of, and demonstrated insight of, your in-class comments, including comments related to answers to assigned problems. (Measures Learning Objectives A, B, C, D)
5. Attendance. Attendance is mandatory, however a student may miss up to 4 classes without penalty or explanation. Absences of more than 4 must be approved by the instructor. More than 4 unapproved absences will result in a reduced grade.
V. REQUIRED COURSE READING MATERIAL
1. Required reading:
|
Code |
Title |
|
Purchased by student: |
|
|
KR |
Krugman, Obstfeld, International Economics: Theory and Policy, 8th Edition, Pearson, 2008 |
|
Distributed electronically by instructor: |
|
|
EM |
Hooke, Emerging Markets, A Practical Guide, Wiley, 2001 |
|
IF |
Madura, International Financial Management, 7th Edition, Thomson South-Western, 2003 |
|
IO |
Adler, International Dimensions of Organizational Behavior, 4th Edition, Wadsworth, 1992 |
|
MG |
Hill, International Business, Managing Globalization, Sage, 2009 |
|
NE |
Lewicki, Litterer, Negotiation, Irwin, 1993 |
|
-- |
Select articles and cases as detailed in Section VIII
|
VI. SUGGESTED ADDITIONAL READINGS
1. Books.
Hill, Think and Grow Rich, St. Martin’s Press, 2001
Friedman, The World is Flat, Picador, 2007
Samuelson, Economics, McGraw-Hill, 2004
Rolfe, Monkey Business, Warner Books, 2001
2. Internet Sites.
http://stats.bls.gov for US Bureau of Labor Statistics
www.sec.gov for public company filings (all U.S. public plus foreign public with U.S. listings)
www.hoovers.com for summary company info, comparables search, etc.
www.statsoft.com/textbook/stathome - for straightforward explanations of statistical terms and concepts
http://www-personal.umich.edu/~alandear/glossary/ - for terms
http://en.m.wikipedia.org/wiki/Fractional_reserve_banking
http://www.youtube.com/watch?v=jFnH9MCdpLo - fed operations video
3. Periodicals.
Business Week, Harvard Business Review, Sloan Management Review, The Economist
VIII. CLASS SCHEDULE
Please note:You are not required to make a written submission unless instructed to do so. Reading should be completed prior to class.
|
# |
Date |
Instruction / Activity |
Topic / Written Assignment Due (if any) |
Reading Assignment (Read for assigned class) |
|
1 |
T 01/19 |
Introduction |
Course introduction. |
-- |
|
INTERNATIONAL MACROECONOMICS |
||||
|
2 |
R 01/21 |
Lecture |
National income accounting. |
KR: C12 p288-p301 |
|
3 |
T 01/26 |
Lecture |
Balance of payments. |
KR: C12 p301-p308 |
|
4 |
R 01/28 |
Lecture
- - - - - - - - - - Article |
Deficits
See readings at:
http://www.dbresearch.de/PROD/DBR_INTERNET_DE-PROD/PROD0000000000180032.pdf (copy and paste this link) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Stagflation.
See reading at:
http://en.wikipedia.org/wiki/Stagflation - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Global Flow of Funds |
See websites (articles for this class are to clarify, not tested in particular)
- -- - - - - - - - - - - - p3-6 |
|
5 |
T 02/02 |
Film |
Milton Friedman on global economics
See: http://www.youtube.com/watch?v=jOO4kPSaD4Y |
-- |
|
6 |
R 02/04 |
Lecture |
Macroeconomic policy and determinants of aggregate demand. |
KR: C16 p420-p425 |
|
7 |
T 02/09 |
Lecture |
Macroeconomic policy coordination. |
KR: C16 p437-p441 box p450
Optional reading KR: C14 p359-p362 (C14 optional for additional clarity on exchange rates) |
|
8 |
R 02/11 |
Article - - - - - - - - - - Film |
IMF/World Bank article - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Life and Debt (Globalization and the Jamaican Economy) |
Posted with class notes included |
|
FOREIGN EXCHANGE |
||||
|
Currency Options |
||||
|
9 |
T 02/16 |
Lecture |
Interpreting foreign exchange and option quotations.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Modeling foreign currency effect. |
IF: C3 p69-p77 Excel currency cross rates handout posted - - - -- - - - - - - - - - Currency options table (pdf)
Excel derivatives (futures and options)
Optional reading IF: C5 excerpts |
|
# |
Date |
Instruction / Activity |
Topic / Written Assignment Due (if any) |
Reading Assignment (Read for assigned class) |
|
Government Actions on Foreign Currency |
||||
|
10 |
R 02/18 |
Lecture
- - - - - - - - - - Article - - - - - - - - - - Film |
Central bank (gov’t) operations on money supply; mechanisms of fixed exchange rates.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Currency crises - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Fed Today
See:
http://www.youtube.com/watch?v=jFnH9MCdpLo |
KR: C17 p462-p466
Optional reading IF: Chapter 6 - - - -- - - - - - - - - - Posted online |
|
Currency Interconnectedness and Foreign Exchange Quotations |
||||
|
11 |
T 02/23 |
Lecture
|
Exchange rate determination. Relationship among inflation, money supply, interest rates, and exchange rates. |
KR: C19 p544-p551
Optional reading IF: C4 p107-p118 |
|
12 |
R 02/25 |
Lecture |
Currency interconnectedness – cont’d – Germany and Japan. |
-- |
|
13 |
T 03/01 |
Review |
Midterm Exam review. |
-- |
|
14 |
R 03/03 |
Exam |
Midterm Exam. |
-- |
|
-- |
T 03/08 |
No Class |
-- |
-- |
|
-- |
R 03/10 |
No Class |
-- |
-- |
|
INTERNATIONAL TRADE |
||||
|
15 |
T 03/15 |
Lecture |
International negotiations. |
NE: Negotiations IO: Int’l negotiations MG: Int’l negotiations |
|
Trade Theory |
||||
|
16 |
R 03/17 |
Lecture |
Comparative advantage |
KR: C3 p28-p29, p36-p42 |
|
17 |
T 03/22 |
Lecture - - - - - - - - - - Film |
Comparative advantage – cont’d - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - EU history |
KR: C3 p42-p47, p48-p51 |
|
Trade Policy |
||||
|
18 |
R 03/24 |
Lecture |
Instruments of trade policy. |
KR: C8 p182-p196
Optional reading IF: C19 (posted with class notes included) |
|
19 |
T 03/29 |
Lecture |
Purchasing power parity. See specifically chart p397.
Interest rate parity.
See:
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal) http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP) |
KR: C15 p384-p386 p394-p401
p388-p389
|
|
Regional Trade |
||||
|
20 |
R 03/31 |
Case study |
Charlene Barshefsky |
p1, 5-11 |
|
21 |
T 04/05 |
Film |
International economics film. |
-- |
|
# |
Date |
Instruction / Activity |
Topic / Written Assignment Due (if any) |
Reading Assignment (Read for assigned class) |
|
SOVEREIGN RISK ASSESSMENT |
||||
|
Economics of Emerging Markets and EM Crises |
||||
|
22 |
R 04/07 |
Lecture
- - - - - - - - - - Film Clip |
Developing country economic crises.
Emerging market characteristics/specific economic issues (optional) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Jeffrey Sachs in Bolivia: http://www.pbs.org/wgbh/commandingheights/shared/minitextlo/vid_jeffreysachs.html |
KR: C22 p625-p637 Table 22.2
Optional reading EM: C2,3 p26-p44 p46-p54 |
|
23 |
T 04/12 |
Lecture |
Developing country economic crises – cont’d. |
KR: C22 p637-p646 |
|
Country analysis |
||||
|
24 |
R 04/14 |
Lecture
- - - - - - - - - - Articles |
Country risk assessment. Measuring exposure.
ISTAT Italy statistics
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - EM Sovereign Debt (through section 2.1) See also Nigeria $ denominated bond (page 1 of prospectus) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Who Sank, or Swam, in Choppy Currents of a World Cash Ocean |
IF: C16 p476-p482
Posted online
Optional reading IF: C10 p303-p305 p311-p313 p319-p323 - - - - - - - - - - - - - - See article See posted online - - - - - - - - - - - - - - Optional reading |
|
25 |
T 04/19 |
Excel |
Econometric forecasting |
Optional readings Excel basics 1 & 2 |
|
26 |
R 04/21 |
Lecture |
Final Exam review. |
-- |
|
27 |
TBD |
Exam |
Final Exam. |
-- |
EOC problems
Suggested end of chapter problems - you are not required to submit answers to these questions. They are intended to help clarify the concepts. Answers are posted online. (Bolded may be used in class).
KR book
KR-C12 – 2 (national income accounting), 3, 5, 8, 9 (BOP)
KR-C16 – 3, 5, 6, extra: 14, 16
KR-C17 – 3, 5, 9, 13, 16, 20 (last ones good for non fx part of bs)
KR-C19 – 3, 4, 7, 8, 12
KR-C3 – 4, 6, 7, 8
KR-C8 – 3, 5, 7, 8, 10
KR-C15 – 1, 3, 13, 14, 15 (on nominal and real interest rates)
KR-C22 – 3–8, 11, 12
IF book
IF-C3 – 3-7, 3-17
IF-C16 – 16-9, 16-12
