International Finance, C06.
Notice on the final exam: the exam will be cumulative. In studying, first make sure you understand the materials in the lectures. The lecture notes for each lecture are available below. In the lectures below (section 3), occasionally there is a reference to other readings. You should also be familiar with the ones that have a (*).
I will be updating this web site, and the course syllabus, periodically.
1. The main textbook for the course is:
Paul Krugman and Maurice Obstfeld (KO), International Economics,
Theory and Policy, Addison-Wesley, 1997.
In addition, students are expected to read Krugman's The Return
of Depression Economics, Norton, 1999.
2. Previous exams that I wrote for C11. Note this is NOT for C06. I'm showing you these exams so you can have a feel for the
type of questions I ask. DO NOT MAKE A MISTAKE AND THINK THAT THESE ARE PREVIOUS C06 EXAMS!!!!!!!!!
Exam example 1, example 2, example3.
The best way to study for this exam is to study the lectures first. Then, look at the readings to help clarify anything that seems unclear from the lectures. The Krugman reference for the October 6 lecture was not covered and can be ignored. We'll look at it later.
Questions will be a mixture of very short questions (but, no multiple choice), and longer essay. The questions will be less open ended than the homeworks are sometimes. There will be no math problems that require calculators. The test will be closed book. There will be no questions that specifically quiz you to see if you looked at some reading.
3. Handouts and other readings will be distributed from time to time. Following is an initial list. I will add to it, as I find more materials relevant to the course. Don't worry, you won't be required to know EVERYTHING in these articles! I'll let you know what you're expected to know for exams.
Lecture 1: Chapter 12 in KG, Economist Magazine Article, International Monetary Fund Report, lecture notes.
Lecture 2, September 27: Chapter 13 in KO, ch. 7 in Krugman's book, lecture notes, material on the 'overvalued' stock market (*)
Lecture 3, September 29: Chapter 13 in KO, lecture notes.
Lecture 4, October 4, Chapter 13 and pages 367-377 in KO, lecture notes.
Lecture 5, October 6, Chapter 14 in KO, lecture notes. Also, see Krugman on the potential for money demand shocks to slow down the economy.
Lecture 6, October 11, Chapter 14 in KO, lecture notes.
Lecture 7, October 13, Chapter 15 in KO, lecture notes.
Lecture 8, October 18, Chapter 15 in KO, lecture notes.
Lecture 9, October 27, Chapter 15 and Chapter 16 in KO, lecture notes.
Lecture 10, October 29, Chapter 16 in KO, lecture notes.
Lecture 11, November 1, Chapter 16 in KO, lecture notes.
Lecture 12, November 3, Chapter 16 and 17 in KO, lecture notes.
Lecture 13, November 8, Chapter 17 in KO, lecture notes.
Lecture 14, November 10, Chapter 17 in KO, lecture notes.
Lecture 15, November 12, Chapter 17 in KO, a note on expectations traps (*), lecture.
Lecture 16, November 15, Chapter 17 in KO, lecture notes.
Lecture 17, November 17, Chapter 17 in KO, lecture notes.
Lecture 18, November 22, Chapter 17 in KO, lecture, Francois Velde's Fed Letter (*)
The following were NOT covered, and are not required:
Handouts related to chapter 17: Krugman Article, appendix 1 and 2 of the International Monetary Fund Report.
Handout related to chapter 18: Chari-Kehoe Article on IMF.
4. Homeworks. A homework exercise will be placed on this web site by Wednesday of each week. It is due in the TA's box in the economics department on the following Thursday morning.
Homework#1, due Wednesday September 29, Questions 3-6, page 328 in Krugman and Obstfeld.
Homework#2, due Thursday morning, in C06 mail box in the Economics Department (2nd floor, Anderson Hall), October 7: Q. 6, 7, 9, 11, 12, pages 360-361 in KG.
Homework#3, due Thursday morning, in C06 mail box in the Economics Department, October 14: pages 395-396, Q 1, 4, 5, 7, 8, 9.
Homework #4, due Thursday, October 21: pages 434-436, questions 1, 5, 7, 10, 14, 17.
Homework #5, due Thursday, November 4: pages 473-474, questions 1, 4, 6, 7, 8, 10.
Homework #6, due Thursday, November 11, page 474, questions 12, 13, 14, page 520, questions 1, 2, 3.
Homework #7, due Friday, November 19, page 521, questions 5, 8, 11.
Homework #8, due Monday, November 29, page 521, questions 4, 7, 9, 14, 16.
5. You will get more out of this course if you read the financial press regularly. Also,
there is a lot of relevant information on the Web, and I encourage you to look
through it. Here is a small sampling of the economic
commentary and data that you can find there.
5.a. Commentary - the best general commentary is available from the Economist Magazine, at
http://www.economist.com/. Nouriel Roubini
maintains a fabulous web site, which not only contains commentary on topics of general
interest in international finance, but is also the best source of commentary on the Asian
crisis, http://equity.stern.nyu.edu/~nroubini/.
Paul Krugman's web site has numerous interesting commentaries on subjects of interest to
this course, as well as links to other relevant sites, http://www.mit.edu/people/krugman/index.html.
The New York Times has a web site devoted to the Asian crisis, at http://www.nytimes.com/library/financial/index-global-fin-crisis.html.
5.b. Data - http://www.economicsearch.com/ is
a general-purpose web site for research in economics; http://www.economagic.com/search/ is a giant
database with thousands of variables.
