ECON 322: International Finance Fall 2014

ECON 322: International Finance
Fall 2014
Instructor: Ayse Kabukcuoglu E-mail: [email protected]
Office hours: Tue 2-3pm or by appointment Office: CAS 276
Teaching Assistants: Ruveyda Nur Izgi ([email protected]),
Mehmet Furkan Karaca ([email protected])
TA office hours: TBA
Overview
Topics in international finance such as exchange rates, international capital flows, and balance of
payment crises have been subject of intense political and academic debate and are central to
policy-making, economic development, and business strategy. This course focuses on three main
topics in international finance: i) money and exchange rates, ii) the balance of payments, and iii)
the role of policy.
In this course, you will learn about how economists develop models and approaches to evaluate
the behavior of exchange rates in the short and the long run. You will also start building linkages
between the theoretical concepts learned in the class to real world issues especially those related
to exchange rate policy, financial crises and other global economic issues.
By the end of the semester, you should be able to critically read articles that appear in
publications such as The New York Times, The Wall Street Journal, Financial Times, and The
Economist.
Required Textbook
International Macroeconomics, by Robert C. Feenstra and Alan M. Taylor (2012), Worth Publishers,
2nd Ed.
Course Requirements
ECON 202-Intermediate Macroeconomics is a prerequisite for this course. Understanding of
basic macroeconomic theory will be assumed.
Evaluation
Your letter grade will be determined based on two midterm exams (80%), homework
assignments (10%), and in-class exercises (10%). No final exam will be given. The exams will be
evaluated based on the following formula: max[30% midterm 1+50% midterm 2, 20%
midterm 1+60% midterm 2], so that if you perform significantly better in the second exam, this
improvement will be reflected in your final grade.
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Homework assignments: You will be given 4 or 5 homework assignments based on
the problem sets in the textbook.
In-class assignments: At the end of each class, you will be given an exercise (a short
question based on the material taught in class) that aims to help you understand the
material better. You are allowed to look at your notes and the textbook. You are
required to turn in your answers at the end of the class. At the end of the semester, I
will pick (randomly) 5 of these assignments for grading. The lowest grade will be
dropped, hence only 4 assignments out of 5 will be graded.
Exams and make up policy: Plan well in advance for exams. If you miss an exam due
to health reasons (provided that you have a valid doctor’s report) or due to a family
emergency you will be given a make up exam at the end of the semester. I expect you
to contact me in person immediately if you miss an exam. There is only ONE make up
exam for the two exams (hence it is cumulative). Under no circumstances a student is
allowed to take more than one make up exam. If you miss both exams, the make up will
be given for the second one only.
Attendance policy: I will not take attendance and I will post the lecture notes online.
Still, you are strongly encouraged to attend all lectures to fully digest the material
and complete the course with a higher grade.
Please make sure that you attend the class in the section that you are registered as the
room capacity is limited!
Course Outline
The outline is tentative and subject to change depending upon the progress of the class.
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The Global Macroeconomy, Ch. 1
Intro. to Exchange Rates and the Foreign Exchange Market, Ch. 2
Exchange Rates I: The Monetary Approach in the Long Run, Ch. 3
Exchange Rates II: The Asset Approach in the Short Run, Ch. 4
Midterm exam I (Covers chapters 1-4, Nov. 12, location TBA)
5. National and International Accounts: Income, Wealth, and the Balance of Payments,Ch. 5
6. Balance of Payments: Gains from Financial Globalization, Ch. 6
7. The Balance of Payment II: Output, Exchange Rates, and Macroeconomic Policies in the
Short Run, Ch.7
8. Fixed versus Floating: International Monetary Experience, Ch. 8 (if time permits)
Midterm exam II (Covers chapters 1-8, with a greater focus on chapters 5-8, Dec.
24, location TBA)
Koç University guideliness on academic honesty
Honesty and trust are important to all of us as individuals. Students and faculty adhere to the following
principles of academic honesty at Koç University:
1. Individual accountability for all individual work, written or oral. Copying from others or providing
answers or information, written or oral, to others is cheating.
2. Providing proper acknowledgement of original author. Copying from another student’s paper or from
another text without written acknowledgement is plagiarism.
3. Authorized Teamwork. Unauthorized help from another person or having someone else write one’s
paper or assignment is collusion.
Cheating, plagiarism, and collusion are serious offenses resulting in an F grade and disciplinary action.