Objectives and competences
1. Introduction of the concept of an Open economy into macroeconomics;
2. Understanding of exchange rate fluctuations and economic policy actions and their impact to the balance of payments;
3. Application of the most commonly used theories and models in the field of the open economy macroeconomics in order to discussing and solving internal and external economic imbalances in an open economy.
Content (Syllabus outline)
Closed vs. Open economy;
Open economy – basic concepts;
Balance of payments and its concepts;
Exchange rate determination and regimes;
Multiplier in an Open economy;
Mundell-Fleming model;
Exchange rates, policy mix and balance of payments;
Prices and output in an open economy.
Learning and teaching methods
Lectures
Classroom discussion
Readings
Salvatore, Dominick. 2016. International Economics. Trade and Finance. Wiley. (selected chapters).
Mankiw, N. Gregory. 2007. Macroeconomics. Worth Publishers. (selected chapters).
Krugman, Paul. 2015. International Economics: Theory and Policy. Pearson. (selected chapters).
