ECN160B: International Macroeconomics summer ... - Yuan Liu

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Goals: This course construct a Macroeconomic theory of an open economy and apply ... Textbook: International Macroeconomics by R. Feenstra and A. Taylor, ...
ECN160B: International Macroeconomics summer session II, 2013 Instructor: Yuan Liu ecoliu@ucdavis Lectures: MTW 2:10pm-3:50pm, OLSON 106 Office hours: M 10:00am-12:00pm SSH143 TA: Tingting Zhu ([email protected]) TA Office hours: Tuesday 10:00am-12:00pm SSH139 Goals: This course construct a Macroeconomic theory of an open economy and apply this theory for policy analysis. We begin with basic concepts, like exchange rates, balance of payments, national income account, trade balance. We then lay out several useful theories which explain the determinants of these variables and assemble these theories to form an overall analytical framework. Finally, we apply this Macroeconomic theory to examine several historical and current international economic policy issues: country’s choice of exchange rate regimes, common currency area, global imbalance, and currency crisis. Prerequisites: The course will be taught at an intermediate level. Prerequisites are intermediate microeconomics (ECN100) and intermediate macroeconomics (ECN101). Only 2 units of credit allowed to students who have completed course ECN162. Textbook: International Macroeconomics by R. Feenstra and A. Taylor, second edition. Course Site: All relevant course materials, including syllabus, lecture slides, notes, homeworks, homeworks solutions, practice exams, and practice exam solutions, will be posted on smartsite. I will also send out important announcements through the smartsite. Schedule of Topics: Week1: Read Chapter 1 and Chapter 2 • Lecture1(08/05): Introduction to global macroeconomics (Chapter 1) • Lecture2(08/06): Exchange rate Essentials and the foreign exchange market (Chapter 2) Assignment 1 distributed. • Lecture3(08/07): No arbitrage conditions in the asset market/The asset approach to exchange rate (Chapter 2) Week2: Read Chapter 3 and Chapter 4 • Lecture4(08/12): Purchasing Power Parity and Money Market Equilibrium (Chapter 3) • Lecture5(08/13): The monetary approach to exchchange rate (Chapter 3) Assignment 1 is due, assignment 2 is distributed. 1

• Lecture6(08/14): Construct a complete short run theory of exchange rate determination, Exchange rate overshooting (Chapter 4) Week3: Read Chapter 4 and Chapter 5 • Lecture7(08/19): Exchange rate overshooting (Chapter 4), Exchange rate regimes (Chapter 4 and part of chapter 2) • Lecture8(08/20): Fixed exchange rate regime and the Tri-lemma (Chapter 4) • Lecture9(08/21): National Income Account and Balance of Payment Account(Chapter 5) Assignment 2 is due Week4: Read Chapter 5 and Chapter 7 • Midterm Exam(08/26): Midterm exams covers Chapter 1-4. • Lecture10(08/27): Global Imbalance(Chapter 5), Construct the open economy IS-LM model (Chapter 7) Assignment 3 is distributed • Lecture11(08/28):Construct the open economy IS-LM model (Chapter 7) Week5: Read Chapter 7, Chapter 8 and Chapter 10 • Lecture12(09/02): Macroeconomic Policy and Exchange Rate Regimes (Chapter 7) Assignment 4 is distributed • Lecture13(09/03): Exchange Rate Regime Choice: Pegging v.s. Floating (Chapter 8) Assignment 3 is due • Lecture14(09/04): Optimum Currency Area/The Eurozone (Chapter 10) Week6: Read Chapter 9 • Lecture15(09/09): Currency Crisis (Chapter 9) Assignment 4 is due • Lecture16(09/10): Currency Crisis and Final Review • Final Exam(09/11): Final exam is accumulative. Evaluation: The course grade is based on 4 homework assignments, 1 midterm exams, and a comprehensive final exam. The overall score will be computed as whichever of the following is higher: • 20% homeworks+35%midterm+45%final • 20% homeworks+80%final Exams are scheduled for the following dates. No makeup exams will be given. • Midterm: Aug 26, OLSON 106 • Final: Sep 11, OLSON 106

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