In this course, we will be covering the main topics of international macroeconomics. We will start by studying an intertemporal model where we will be covering the balance of payments accounting and the dynamics of the trade balance, current account, savings and investment in the open economy. We will study interest rate parities as conditions for capital mobility. We will extend the model to include non-tradable goods and study the dynamics of the real exchange rate. We will consider the relevance of nominal rigidities. We will study the determination of nominal exchange rates and discuss the relevance of the Quantity Theory of Money. We will study a nominal model with uncertainty where the basics of asset pricing can be derived. We will cover the basics of optimal stabilization policy. We will also study optimal fiscal policy in the open economy.

Prerequisites: Yes (see syllabus)