Course Unit Page

Academic Year 2020/2021

Learning outcomes

This course covers topics on currency, liquidity and debt crises as well as international financial contagion. Issues pertaining to monetary/financial, exchange rate, debt restructuring, in connection with the antecedents and aftermath of crises are studied at both the theoretical and empirical levels. At the end of the course students will be able to analyze and discuss the role of current account dynamics, international capital flows, financial integration, and world commodity price cycles as these relate to recurring economic booms and bust.

Course contents

This course is intended to use simple small open economy model to answer many important macroeconomic questions that arise in emerging markets and developing economies, particularly those regarding monetary, fiscal, and exchange rate issues. We want to think in terms of simple models and grasp the fundamentals of open economy macroeconomics.

It is an advanced course that builds on the standard intertemporal small open economy model with frictions such as imperfect capital markets, intertemporal distortions, and nontradable goods and applies these theoretical tools to a variety of important macroeconomic issues relevant to developing countries (and, in a world of continuing financial crisis, to industrial countries as well), including the relative merits of flexible and predetermined exchange rate regimes. We analyze in detail specific topics such as the “dollarization,” balance of payments crises, and, inspired by recent events, financial crises and the economic effect of the covid virus.


Obstfeld M., K. Rogoff, Foundations of International Economics, 1996 MIT Press

papers from international scientific journals

Teaching methods

Frontal teaching.  Theoretical models will be discussed and developed in class.Particular attention will be devoted to the understanding of models backgroungand empirical implications as well as discussion on policy issues.

Assessment methods

Final written examination (80% of the grade) and a referee report (20& of the grade).   The final examination will be divided in two parts. The first Section will contain 5/6 true, false, uncertain statemtens. The students have to explain carefully and on the basis of the models and knowledge acquired in class the statement. The second Section is composed of an open question on on or more issues discussed in class.

Teaching tools

Exercises will be assigned in class but will not be counted in the course evaluation

Office hours

See the website of Laura Bottazzi