Course Outcomes
Econ 459 students will be able to
- Demonstrate a familiarity with the key issues in two broad fields:
International Finance, particularly exchange rate behavior,
Open Economy Macroeconomics.
- Discuss the nature of the foreign exchange market, including:
It's market organization
The role of vehicle currencies
The instruments traded
The role of arbitrage.
- Understand and use models of exchange rate behavior:
Covered and uncovered interest rate parity
Long-run monetary and equilibrium models.
- Understand financial portfolio theory to the extent that it is useful in explaining exchange rate behavior, including:
The determination of risk premia
How it may explain the "forward bias" puzzle.
- Discuss the history of the international financial system since the late 1700's.
- Discuss the international aspects of the national income and product accounts, along with the balance of payments accounts.
- Apply simple dynamic models of consumption smoothing to the current account.