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Rutgers University

Department of Economics

Fall 2013

Econ336 - International Balance of Payments

Instructor: Antonio Cusato NovelliEmail: acusato@econ.rutgers.edu

Class Location: CAC SC-101Session Dates: Sep 4 - Dec 11Class Time: M,W 4:30-5:50 PMOffice: NJ Hall 408, CACOffice Hours: T 9:30-10:30 AM or by appointmentPrerequisites: Intermediate Macroeconomics (321) and Econometrics (322)

Learning Outcomes

This course is an introduction to the main problems and methods in the field of International Macroe-conomics and Finance. Main topics include the determination of current accounts, exchange ratetheory and evidence, financial crises, and macroeconomic policy in open economies. We will discusssome basic theories that have been developed to understand these issues, review related empiricalevidence, and identify implications for current events and public policy.

This course is a upper level elective.

Course Materials

The textbook is: Robert Feenstra and Alan Taylor (2012) International Macroeconomics

. WorthPublishers. Second Edition. ISBN-10: 1-4292-4103-9

To discuss current account issues in more detail, we will also rely on an unpublished textbook, In-ternational Macroeconomics, by Stephanie Schmitt Grohe and Martin Uribe. The text is still a workin progress. The link is the following: http://www.columbia.edu/ mu2166/UIM/notes.pdf. Also, thechapters we will discuss in class will be posted on Sakai.

Academic Integrity and Grading Policy

Students are expected to mantain Academic Integrity1. Cheating in an exam will be reportedand considered as a serious violation.

Students with disabilities must present a letter from the RU Office of Disability Services beforethe first quiz.

Students are expected to attend all classes. If you expect to miss one or two classes be-cause of illness or a family emergency, please use the University absence reporting websitehttps://sims.rutgers.edu/ssra/ to indicate the date and reason for your absence. An email isautomatically sent to me.

1 http://academicintegrity.rutgers.edu/about-the-office-of-student-conduct

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Rutgers University - Deparment of Economics Econ336 - International Balance of Payments - Fall 2013

During the semester, there will be 3 quizzes, one midterm and one final. The lowest quiz gradewill not be considered for the calculation of your final quiz grade (only the other two). The finalexam will not be cumulative.

There will be one make-up exam at the end of the course. Students are allow to take this exam

under extraordinary circumstances. This make-up exam will be cumulative.

The following table consider important dates and events:

Dates Event

Sep 25 Quiz 1Oct 9 Quiz 2

Oct 21 MidtermOct 28 Last day to drop with WNov 27 Quiz 3

Dec 17, 8-11AM Final exam

Note that October 28 is the last day to drop with a W grade.

The material that will be evaluated on quizzes and exams will be posted on the Announcementssection of the Sakai site.

Course grade will be based on 2 quizzes (30 per cent), 1 midterm exam (35 per cent) and 1 finalexam (35 per cent).

Course Outline

The following course outline could be subject to changes.

Lecture Materials

I. Introduction Feenstra and Taylor (2012), Ch. 1II. Exchange Rates and the Foreign Exchange Market Feenstra and Taylor (2012), Ch. 2III. A Model for Exchange Rates: the Long Run Monetary Feenstra and Taylor (2012), Ch. 3, 4Approach and the Short Run Asset ApproachIV. Introduction to the National Income Accounting Feenstra and Taylor (2012), Ch. 5and the Balance of Payments Schmitt Grohe and Uribe (2013), Ch. 1, 2V. A Theory of Current Account Determination Schmitt Grohe and Uribe (2013), Ch. 3, 4

Feenstra and Taylor (2012), Ch. 6VI. Current Account Determination: a Production Economy Schmitt Grohe and Uribe (2013), Ch. 5VII. Current Account Determination: External Adjustment and Schmitt Grohe and Uribe (2013), Ch. 6, 7Fiscal PolicyVIII. Short Run Issues and Macroeconomic Policies Feenstra and Taylor (2012), Ch. 7

IX. Exchange Rates Regimes and Crises Feenstra and Taylor (2012), Ch. 8, 9X. Debt and Default Feenstra and Taylor (2012), Ch. 11

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