Università Roma Tre

Introduction
- International economics: the distinction between international trade theory and policy and the international monetary economy. Outline of the course.
Recording of economic and financial relations with foreign countries
- National accounting in an open economy
- Balance of payments
Exchange rates and foreign Exchange Markets. A portfolio approach
- Exchange rates and international transactions
- The foreign exchange market
- Demand for foreign currency assets
- Equilibrium in the foreign exchange market
- Interest rates, expectations and equilibrium
Money, interest rates and exchange rates
- Demand for Money
- Money supply and the determination of domestic rates of interest
- exchange rates in the short term
- Money, prices and exchange rate in the "long term".
- Inflation and exchange rate dynamics
- Critical considerations on the interpretation of the terms "short term" and "long term": the theoretical assumptions about the tendency to full employment
Long-term price level and exchange rate
- The law of one price
- Purchasing power parity: presentation and criticism
- A long-run exchange rate model based on PPP
- Empirical evidence on PPP and the law of one price.
- Explaining of the problems related to PPP.
- Beyond PPP: a "general" long-term model for exchange rates
Output and exchange rate in the short-run
- Output market equilibrium in an open economy in the short run (The DD curve)
- Asset Market equilibrium in the short run (the AA curve)
- Short-run equilibrium in open economy: putting DD and AA together
- Temporary changes in monetary and fiscal policies
- Permanent shifts in monetary and fiscal policies
- Macroeconomic policies and the current account
- The J curve and Marshall-Lerner condition
- The liquidity trap in the open economy
Fixed exchange rates and foreign exchange intervention
- Why study fixed exchange rates
- Central Bank intervention and the money supply
- How the central bank fixes the exchange rate
- Balance of payments crises and capital flight
- Managed floating and sterilized intervention
- Reserve currencies in the international monetary system
- The Gold Standard
The International Monetary System: a historical overview
- Macroeconomic policy goals in an open economy
- Classifying monetary systems: the open economy trilemma
- International macroeconomic policy under the Gold Standard, 1870-1914
- The years between the two wars (1918-1939)
- The Bretton Woods system and the International Monetary Fund
- Analyzing economic policy options for reaching internal and external balance
- The problem of the external balance of the United States in the Bretton Woods system
- the mechanism of imported inflation
- The case for floating exchange rates
- Macroeconomic interdependence under floating exchange rate regime
- What has been learned since 1973?
- Are fixed exchange rates even an option for most countries?
Optimal currency areas and European experience
- The evolution of the single European currency
- The euro and the economic policy of the euro zone
- The theory of optimum currency areas
- The future of EMU
- The crises of Balance of payments within the euro area

P. Krugman, M. Obstfeld, M. Melitz, Economia internazionale 2 - Economia monetaria internazionale, Undicesima Edizione Pearson, 2020.