The module introduces students to the theoretical underpinnings that constitute international finance and the nature and extent of monetary and financial relations between countries.
The module introduces basic concepts of international macroeconomics such as the balance of payments and exchange rates, and arbitrage conditions. It then proceeds to analyse the impact of opening up the economy on the alternative macroeconomic policies available. The main factors that determine exchange rates between currencies, and the power of different models are also considered. Finally, the module explores 'hot topics' in international finance including the benefits and drawbacks of fixed and floating exchange rates, the concept of a speculative attack, current account imbalances from an inter-temporal perspective, and how world macroeconomic imbalances drove the 2008/09 international financial crisis and recent sovereign debt crisis in Europe.
The module has both a theoretical and an applied emphasis in order to apply available theories into the real problems of the world economy. It does not analyse the detailed workings of international financial markets or questions related to firm financial management in international capital markets but students interested in these aspects can acquire basic foundations that are fundamental in understanding the context in which firms and governments work.
The topics covered in the module include:
• Open economy macroeconomics and policy.
• Exchange rates determination theory and empirics.
• Microfounded models of the current account.
• International financial flows.
• International indebtedness.
• International financial crises
• International monetary arrangements.
Private Study: 133 hours
Contact Hours: 17 hours
Total: 150 hours
This is an optional module for all Single and Joint Honours degree courses in Economics.
The module is NOT available to students across other degree courses in the University
Main Assessment Methods:
Moodle Quiz, (45 minutes) (15%)
Take away assignment (800 words) (15%)
Examination, 2 hours (70%)
Reassessment: 100% exam
*Exams will be in-person*
The University is committed to ensuring that core reading materials are in accessible electronic format in line with the Kent Inclusive Practices.
The most up to date reading list for each module can be found on the university's reading list pages.
See the library reading list for this module (Canterbury)
On successfully completing the module students will be able to:
1 Demonstrate knowledge and comprehensive understanding of basic theoretical concepts such as exchange rates, interest rates and capital movements in an international setting
2 Synthesise and critically compare different economic analyses of issues relating to international finance and policy formation
3 Critically assess and examine the main debates on international money and finance problems arising in the media newspapers and specialised magazines
4 Understand the implications of capital flows for the international transmission of economic shocks
5 Identify, analyse and understand macroeconomic policy coordination within a global context.
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