EC 2164A-001: International Finance

Course Syllabus

Registration

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Prerequisite Note

The prerequisite for this course is Economics 2152A/B.

You are responsible for ensuring that you have successfully completed all course prerequisites, and that you have not taken an antirequisite course. Lack of prerequisites may not be used as a basis for appeal. If you are found to be ineligible for a course, you may be removed from it at any time and you will receive no adjustment to your fees. This decision cannot be appealed.

If you find that you do not have the course prerequisites, it is in your best interest to drop the course well before the end of the add/drop period. Your prompt attention to this matter will not only help protect your academic record, but will ensure that spaces become available for students who require the course in question for graduation.

Course Description

This is a course in open economy macroeconomics that addresses three elements: money, finance, and policy. Hence, the course is organized as follows. (1) The first part will ask: how exchange rates are determined and how currencies are exchanged. We will see two different approaches: using the monetary approach for long run determination and the asset approach for short run determination. (2) The second part will examine the globalization of finance and ask: who lends/borrows? Who benefits/loses? We will learn the balance of payments (BOP) and national income accounting; the relationship between the BOP, the nation’s wealth and living standards in the long run; and the relationship between the BOP, exchange rates, and the demand for output in the short run. (3) The third part will discuss the role of government. We will cover fixed and flexible exchange rate regimes and their implications for macroeconomic policy.

Further discussions on a variety of current international finance issues might be undertaken. Topics may include the revaluation of the Renminbi, debt crisis and external imbalances and adjustment, subject to our class content adjustments when we go along.

Course Materials

The course has a main text: Robert C. Feenstra and Alan M. Taylor, International Macroeconomics, Worth 2008 (or the second part of International Economics by Feenstra and Taylor, Worth 2008). A text (and study guide package) is available at the bookstore.

I will also maintain a WebCT site (http://webct.uwo.ca/) that will be used to post additional course material as well as any details/announcements pertinent to the course. In particular, I will post review questions followed by the solutions that will be a good practice for you and will give you an idea of the questions that you should expect in the examinations. All material posted on the WebCT is subject to examination on tests and exams.

Attendance

All students are required to attend class. Material covered in class may serve as the basis for exam questions. Often the material covered in class is not covered in the text nor is it posted on WebCT. I will also distribute the relevant notes at the beginning of each class.

Assessment

Code of Conduct

The university takes cheating very seriously. Please read the note attached carefully and you are responsible to follow all the relevant policies by the University or Faculty/Department.

Civility Statements

The classroom is a special environment in which students and faculty come together to promote learning and growth. Any successful learning experience requires mutual respect on the part of the student and the instructor. Neither instructor nor student should be subject to others’ behaviour that is rude, disruptive, intimidating, or demeaning.

Instructor responsibilities:

• Start and end class on time.
• Treat all students with courtesy and respect.
• Be open to constructive input from students in the course.
• Ensure that opportunities to participate are enjoyed equally by all students in the course.
• Contribute to a peaceful and inspiring learning environment.

Students should try their best as follows: to come to class on time, and refrain from packing up belongings before class ends; not to make noises that might create a disruption in class (e.g., keep your cell phone in vibration mode or turn it off); to give attention while either instructor or another student is speaking; to contribute to a peaceful and inspiring learning environment as well.