• Knowledge and understanding The course provides the basic tools to analyze the complex relations underlying the macroeconomic behavior of open economies, and to understand the issues raised by the openness of an economy to international capital flows. At the end of the course students are expected to understand the complexity of exchange rate behavior, to know the various types of exchange rate arrangements, to understand macroeconomic behavior under different exchange rate regimes and different conditions regarding international capital mobility, and to understand the policy challenges posed by international capital flows. • Applying Knowledge and Understanding At the end of the course students should be able to apply what they learnt in order to formulate rigorous reasoning on different international macro issues, such as for example: the pros pros and cons of alternative exchange rate regimes, the pros and cons of alternative conditions on international capital mobility, the working of international monetary arrangements in light of historical experiences. • Making judgments At the end of the course students should be able gather and interpret information and data to formulate their critical assessments on a given international macroeconomic issue. • Communication skills At the end of the course students should be able to clearly present to an audience of peers their conclusions on a given international macroeconomic issue as well as the knowledge and the logic underlying them. • Learning skills The course aims to prepare the students to undertake advanced studies with authonomy.

Microeconomics and Macroeconomics are required prerequisites for the course.

1. OPEN ECONOMY MACROECONOMIC ACCOUNTING 1.1 The Balance of Payments 1.2 National income and product accounts and Balance of Payments accounts 2. INTERNATIONAL CAPITAL MOBILITY 2.1 Eras of financial globalization: a look at data on stocks 2.2 Measuring capital mobility by looking at data on flows: savings, investment and the current account 2.3 Benefits and costs of international capital mobility 3. CAPITAL MOVEMENTS AND LONG RUN GROWTH IN THE OPEN ECONOMY 3.1 A Solow model for a small open economy 3.2 Using the Solow model to judge advantages and drawbacks of financial globalization 4 - MACROECONOMIC INFLUENCES IN THE FOREIGN EXCHANGE MARKET 4.1 Exchange rate concepts 4.2 Supply and demand for foreign exchange 4.3 Real exchange rates 4.4 Interest parity conditions 4.5 Central Bank interventions in the Forex market: the exchange rate regime 5. SHORT RUN FLUCTUATIONS IN AN OPEN ECONOMY UNDER A FIXED EXCHANGE RATE REGIME, WITH PERFECT AND IMPERFECT CAPITAL MOBILITY. 5.1 The classical Gold Standard and Gold Standard Macroeconomics 5.2 The Bretton Woods System and macroeconomics under soft pegs and imperfect capital mobility. 5.3 Fixed exchange rates and perfect capital mobility: currency crises and hard pegs. 5.4. Hard versus Soft pegs under perfect capital mobility 6. SHORT RUN FLUCTUATIONS UNDER FLOATING EXCHANGE RATES (AND PERFECT CAPITAL MOBILITY) 6.1 Floating exchange rate : transitory shocks 6.2 Floating exchange rate: intermediate and permanent shocks 6.3 Exchange rate dynamics 6.4 Long run equilibrium under floating exchange rates. 7. Project work topics: - THE EUROPEAN DEBT CRISIS - IS THE DOLLAR LOOSING DOMINANCE AS AN INTERNATIONAL CURRENCY?

The required readings for each topic are available on the Moodle page of the course. Selected chapters from various books: P. Montiel “International Macroeconomics”,Wiley-Blackwell 2009. De Grawe “Economics of Monetary Union”, 13th edition, 2020 Obstfeld Taylor “ Global capital markets. Integration Crisis and Growth”, Cambridge University Press. Sorensen Whitta-Jacobsen “Introducing Advanced Macroeconomics”, Mc Graw-Hill, 2nd edition, 2010.

1. OPEN ECONOMY MACROECONOMIC ACCOUNTING 1.1 The Balance of Payments 1.2 National income and product accounts and Balance of Payments accounts 2. INTERNATIONAL CAPITAL MOBILITY 2.1 Eras of financial globalization: a look at data on stocks 2.2 Measuring capital mobility by looking at data on flows: savings, investment and the current account 2.3 Benefits and costs of international capital mobility 3. CAPITAL MOVEMENTS AND LONG RUN GROWTH IN THE OPEN ECONOMY 3.1 A Solow model for a small open economy 3.2 Using the Solow model to judge advantages and drawbacks of financial globalization 4 - MACROECONOMIC INFLUENCES IN THE FOREIGN EXCHANGE MARKET 4.1 Exchange rate concepts 4.2 Supply and demand for foreign exchange 4.3 Real exchange rates 4.4 Interest parity conditions 4.5 Central Bank interventions in the Forex market: the exchange rate regime 5. SHORT RUN FLUCTUATIONS IN AN OPEN ECONOMY UNDER A FIXED EXCHANGE RATE REGIME, WITH PERFECT AND IMPERFECT CAPITAL MOBILITY. 5.1 The classical Gold Standard and Gold Standard Macroeconomics 5.2 The Bretton Woods System and macroeconomics under soft pegs and imperfect capital mobility. 5.3 Fixed exchange rates and perfect capital mobility: currency crises and hard pegs. 5.4. Hard versus Soft pegs under perfect capital mobility 6. SHORT RUN FLUCTUATIONS UNDER FLOATING EXCHANGE RATES (AND PERFECT CAPITAL MOBILITY) 6.1 Floating exchange rate : transitory shocks 6.2 Floating exchange rate: intermediate and permanent shocks 6.3 Exchange rate dynamics 6.4 Long run equilibrium under floating exchange rates. 7. Project work topics: - THE EUROPEAN DEBT CRISIS - IS THE DOLLAR LOOSING DOMINANCE AS AN INTERNATIONAL CURRENCY?

Lectures, class discussions, group work, flipped classrooms.

The course will use the Moodle2 platform.

For students attending classes (at least 80% of meetings), evaluation is based on a midterm and final written tests plus the discussion a group project work which will be presented in class. The written tests consist of open questions with short answers covering all topics of the syllabus. The group project work consists on an analysis on a specific topic, whose results will be presented and discussed in class. Written exams and project work will be graded on a scale of 30, and the final grade will be the weighted average of the grades on the three parts (midterm 40%, final 40% , project 20%). For students not attending classes evaluation is based on a written test (open questions with short answers covering all topics of the syllabus) and an oral exam, covering all topics of the program. Written test and oral exam will be graded on a scale of 30, and the final grade will be the weighted average of the grades on the two parts (written 50%, oral 50%).

The course touches topics which are correlated to the following goals of the UN 2030 Agenda for Sustainable Development: Goal 8 - Decent work and economic growth (specific topics: employment and unemployment, economic growth) Goal 10- Reducing inequality