Professor Philip Lane

Email:plane@tcd.ie

http://www.philiplane.org/EC4100

Autumn 2011

EC4100 International Economics Part A: International Macroeconomics

Administrative Issues

The course textbook is Robert Feenstra and Alan M. Taylor, International Economics, Second Edition, Worth, 2011 [acronym FT]. In addition, the reading list below includes an assortment of journal articles and other readings. The tutorial schedule will be announced: the available time slots are Mondays 6pm-7pm and Fridays 3pm-4pm. My office hours are 3pm-5pm on Tuesdays. There will be an essay assignment this term which counts 10 percent towards the overall grade: the assignment will be due on Friday December 2nd.

Lecture Notes, Tutorial Questions and other material will be made available through WebCT. This syllabus will be updated online throughout the term.

Introduction

FT, Chapter 12.

Balance of Payments Accounting

FT, Chapter 16.

Gian Maria Milesi-Ferretti (2009), " Changing Fortunes," Finance & Development (March).

Philip R. Lane and Gian Maria Milesi-Ferretti (2007), "The External Wealth of Nations Mark II," Journal of International Economics, November.

Exchange Rates

FT, Chapter 13

FT, Chapter 14

FT, Chapter 15

FT, Chapter 22 (Sections 22.1 and 22.2)

Kenneth Rogoff (1996), "The Purchasing Power Parity Puzzle," Journal of Economic Literature 34, 647-668.

Alan Taylor and Mark Taylor (2004), "The Purchasing Power Parity Debate," Journal of Economic Perspectives 18(4), 135-158.

Kenneth Froot and Richard Thaler (1990), "Foreign Exchange," Journal of Economic Perspectives 4(3), 179-192.

The Economist (2009), " Crash and Carry," Economics Focus, December 9th 2009 issue.

Gabriele Galati, Alexandra Heath and Patrick McGuire (2007), " Evidence of Carry Trade Activity," BIS Quarterly Review (September), 27-41.

Kenneth Rogoff (2002), " The failure of empirical exchange rate models: no longer new, but still true," Economic Policy Web Essay.

International Capital Markets

FT, Chapter 17

Robert Lucas (1990), "Why Doesn't Capital Flow from Rich to Poor Countries," American Economic Review 80, 92-96.

Kenneth French and James Poterba (1991), "Investor Diversification and International Equity Markets," American Economic Review 81, 222-226.

Graciela Kaminsky, Carmen Reinhart and Carlos Vegh (2004), "When it Rains, it Pours: Procyclical Macropolicies and Capital Flows," NBER Macroeconomics Annual 2004.

Eswar Prasad, Raghu Rajan and Arvind Subramanian (2007), "The Paradox of Capital," Finance & Development [March].

M. Ayhan Kose, Eswar Prasad, Kenneth Rogoff and Shang-Jin Wei (2009), " Financial Globalization: A Reappraisal," IMF Staff Papers, 2009.

Business Cycles in Open Economies

FT, Chapter 18

Exchange Rate Regimes

FT, Chapter 19

Milton Friedman (1953), "The Case for Flexible Exchange Rates," in Essays in Positive Economics, University of Chicago Press, 1953.

Michael Mussa (1990), Exchange Rates in Theory and Reality, Princeton Essays in International Finance No. 179.

Maurice Obstfeld and Kenneth Rogoff (1995), "The Mirage of Fixed Exchange Rates," Journal of Economic Perspectives.

Andrew K. Rose (2010), " Exchange Rate Regimes in the Modern Era: Fixed, Floating, and Flaky," mimeo, UC Berkeley.

The Euro Part I

FT, Chapter 21

Philip R. Lane (2009), "EMU and Macroeconomic Stabilisation Policies in Ireland," NESC Background Report. Available on WebCT.

Olivier Blanchard (2007), "Adjustment within the Euro: The Difficult Case of Portugal," Portuguese Economic Journal 6(1), 1-22.

Currency and Financial Crises

FT, Chapter 20

FT, Chapter 22 (Section 22.3)

Carmen Reinhart and Kenneth Rogoff (2009), "The Aftermath of Financial Crises," American Economic Review 99, 466-472.

The Economist (2010), " Default Settings," Economics Focus, March 31st Issue.

Michael P. Dooley (1995), "A Retrospective on the Debt Crisis," available on WebCT.

The Euro Part II

FT, Chapter 21

Philip R. Lane (2011), "The Irish Crisis," IIIS Discussion Paper No. 356.

The International Monetary System and Global Interdependence

FT, Chapter 22 (Section 22.4)

Olivier Blanchard and Gian Maria Milesi-Ferretti (2009), "Global Imbalances: In Midstream?," IMF Staff Position Note SPN/09/29.

Maurice Obstfeld and Kenneth Rogoff (2009), "Global Imbalances and the Financial Crisis: Products of Common Causes," mimeo, Harvard University.

Assignment

See WebCT.