syllabus factsheets

International economics


This course provides a state‑of‑the‑art foundation in International Economics required for top level master courses in this field. In the first part, we cover the history of neoclassical thinking about international trade flows, inequality, and welfare. On this basis we study international trade policy instruments, i.e. their mechanics and consequences. In the second part of the course we establish a solid understanding of the international monetary system and its interaction with the macroeconomy (International Macro/International Finance). An introductory section about the balance of payments and the most commonly used conceptual frameworks of policy analysis is followed by an extensive overview of the history of the international monetary system and of optimum currency areas. The objective of this course is to familiarise students with an important class of conceptual frameworks that have been used to understand real and monetary aspects of the globalised world. Students will be able to understand and explain the main empirical patterns of international trade and macro using theoretical models. Finally, students will be able to evaluate the impact of trade restrictions and changes in the international monetary system on the global economy and individual countries.


Monetary Economics

Students need to be familiar with very basic concepts of Monetary Economics such as the uses of money or the Quantity Theory of Money. A good understanding of the IS‑LM model is recommended. The ability to solve maximisation problems using the method of Lagrange multipliers is desirable. Course content The main objective of this course is to help undergraduate students bridge the gap between the Monetary Policy concepts and models typically seen at the undergraduate level (namely, the IS‑LM Model) and the New Keynesian frameworks used at the graduate level and at central banks. In order to achieve this objective, students are first given a non‑mathematical overview of the main concepts that are relevant to understand how central banks work nowadays: inflation targeting, an interest rate rule, etc. The presentation of these concepts is complemented with a look at the data and real‑life examples of Monetary Policy discussions. Once students are familiar with these new concepts, the course turns into looking at two models: a cash‑in‑advance model and a simplified New‑Keynesian model. List of topics 1. An overview of Modern Monetary Policy. 1. What We Know. 2. From Money Targeting to Inflation Targeting. 3. Time Inconsistency, Credibility, and Independence. 4. The Effects of Inflation. 5. Unconventional Monetary Policy. 6. Monetary Policy and Financial Stability. 2. Micro‑funded Monetary Policy. 1. A Cash‑in‑Advance Model. 2. Optimal Policy in a CIA Model: the Friedman rule. 3. A New Keynesian Model. 1. Monopolistic Competition: Sticky Prices. 2. The Dixit‑Stiglitz Framework. 3. The Rotemberg Many Costs. 4. Monetary Policy in the New Keynesian Model.


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