25752 - International Finance

Course Unit Page

SDGs

This teaching activity contributes to the achievement of the Sustainable Development Goals of the UN 2030 Agenda.

Decent work and economic growth Reduced inequalities

Academic Year 2021/2022

Learning outcomes

The purpose of the course is to study the impact of globalization on firms strategc decisions. Attention will be focused to customization of company's offering in different countries, to standardized/differentiated approach to competition in differnt countries, to choices of reconfiguate their business model on an international basis.

Course contents

  1. Introduction to the course. Exchange Rate: spot, real, cross rates.Forward and futures.The exchange rate market.
  2. Arbitrage conditions.Exchange rate risk.Exchange-Rate regimes. The central bank’s balance sheet in open economy.
  3. Balance of payments. The ‘J’ effect and the pass through effect. The absorption approach to Balance of Payments.
  4. Economic Policy in Open Economy: the Mundell Fleming model with perfect and imperfect capital mobility. Optimal Currency Areas.
  5. The monetary approach to balance of payments.
  6. Purchasing Power Parity.
  7. Overshooting of Exchange-Rate.
  8. The portfolio balance approach to exchange-rate determination.
  9. Euro and ECB monetary policy
  10. Cryptocurrency and International Monetary Policy 
  11. Balance of Payment Crisis

Readings/Bibliography

Main textbook is:

Pilbeam K., “International Finance”, fourth edition, 2014, Palgrave McMillan

Krugma, P., Obstfeld, M. and M. Melitz, "International Economics", Pearson, latest edition 

Agenor, Bhandari and Flood, Speculative Attacks and Models of Balance of Payments Crises, IMF Staff Papers, Vol. 39(2), pp 357-394. 

Additional Readings

P.DeGrauwe: The Economics of Monetary Union, Oxford University Press, latest edition. 

R. C. Feenstra - A. M. Taylor, International Macroeconomics, 4th edition, Worth Publishers, 2017.

Teaching methods

Class lectures. Although not compulsory, class attendance is highly recommended to successfully deal with the course's requirements.

Assessment methods

Students' assessment will be based on a closed-book written test, aimed at evaluating their comprehension of the main concepts developed throughout the course. It will also assess students' ability to analyze current real-world issues and problems, related to international economics and finance.

The in class exam will be also complemented by a short essay (15-25 pages) on a topic suggested by the instructor. 

Grades will be scaled as follows:

<18 fail
18-23 pass
24-27 good
28-30 very good
30 e lode excellent

Students can reject a passing grade only once. To this end, he/she must email a request to the instructor, who will acknowledge receipt of the message.

Should online exams be envisaged by the University of Bologna, the structure of the written exam will be the same. The exam will be run through Zoom and Exams Online (EOL).

A good background in intermediate macroeconomics is very useful to successfully attend the course.

Teaching tools

Teaching material (class notes and further readings) will be available on Moodle platformat virtuale. 

Office hours

See the website of Massimiliano Marzo