GISDepartment of Global and Interdisciplinary Studies

The course is an advanced class to learn key concepts of international finance. We cover topics such as foreign exchange market, exchange rate fluctuation, exchange rate regime, national income, the balance of payments, money flows and price levels; capital flows and rapidly internationally integrating financial markets; monetary and fiscal policy in open economies; international macroeconomic interdependence and policy coordination; supply relationships, inflation, and nominal anchors for monetary policy; currency unions, the determination of exchange rates in international money markets; and international portfolio diversification.

You should be able to apply theories we learn in the class in a real-world phenomenon, such as exchange rate movement, balance of payment crisis, financial globalization. The actual goal is to be able to understand the semi-annual IMF’s World Economic Outlook, Chapter 1-3 for example)

Will be able to gain “DP 1”, “DP 2”, “DP 3”, and “DP 4”.

英語 / English

This class consists of lecture and discussion based on real-world examples. At the beginning of the class, we will review what we have learnt in the previous class via discussions. Feedback will be given to your answer to my questions during the discussions to make sure all of you understand the materials. I may ask individual students about their impression, and sometimes materials we have covered, in the class. This is an important component of the entire grade (30%). There will be NOT preannounced mini test (called quiz), which should be easy to answer as long as you have an enough understanding of the previous class.

あり / Yes

なし / No

授業形態/methods of teaching：対面/face to face

※各回の授業形態は予定です。教員の指示に従ってください。

1[オンライン/online]：Introduction to the class

The class structure, grading scheme, etc., will be explained.

2[対面/face to face]：The current issues related to International Finance

Using materials from The Economist/The FT/The IMF’s World Economic Outlook, etc., we will see the current relevant and important topics.

3[対面/face to face]：Bretton Woods System

We will study about Bretton Woods System, which is a foundation of today’s exchange rate and balance of payment arrangements.

4[対面/face to face]：Exchange Rate Regime (1)

The evolution of exchange rate regimes among advanced countries after the Nixon Shock – the shift from fixed exchange rate and floating exchange rate – will be discussed.

5[対面/face to face]：Exchange Rate Regime (2)

We will learn various exchange rate system in the world, and pros/cons of different exchange rate regimes.

6[対面/face to face]：Fixed, float, middle regime　「Discussion Session]

In this discussion class, we will discuss pros and cons of different exchange rate regime. IMPORTANT: Please read Frankel (1999) in advance. See below for the link to the paper. I will ask you which exchange rate regime is suitable for a imaginary country.

7[対面/face to face]：Exchange Rate Determination (1)

We will study the most basic, yet powerful, tool to understand a determinant of exchange rate, which is Purchasing Power Parity.

8[対面/face to face]：Exchange Rate Determination (2)

We will briefly discuss other types of theory to understand determinants of exchange rate policy.

9[対面/face to face]：Financial Globalization: Opportunity and Crisis

We will learn how the global financial markets are strongly connected, and its pros (such as being able to borrow from abroad) and cons (contagious financial crisis)

10[対面/face to face]：Impossible Trinity

Impossible Trinity is one of the most important theoretical concept to understand the policy trilemma that monetary policymakers face.

11[対面/face to face]：Financial Globalization: Benefits and Risks

The benefits and risks of financial globalization, especially for emerging and developing countries (EMDEs) will be discussed.

12[対面/face to face]：The dollar's dominance in International Financial Market

We learn how much/how long the dollar has been the global key currency, and discuss if it is sustainable in the backdrop of the rise of China as an economic superpower.

13[対面/face to face]：Euro and currency union

There are several currency unions in the world, but they are mainly in developing countries in Africa or Caribbean islands. The Euro was the first major attempt of advanced nations to build a large currency bloc. We will learn the historical background of the Euro, and discuss whether if it was a success or failure, drawing upon actual experiences (e.g., European sovereign debt problem)

14[対面/face to face]：Final exam and review

Closed-book exam

You will need 2 hours each for preparation/review. Please make sure you have your slide printed out (I prefer you to not to use laptop), and review what you have learnt, which might be on a quiz (not-pre-announced mini test). Also, if you have a particular subject matter you want to have a discussion, please let me know so that I can incorporate into the actual class. If you have any questions, please feel free to contact me via Hoppii or via Email.

There is no textbook. Slides for the next class (as well as PDF notes with space for a memo) will be uploaded two days before, which I recommend printing out

Required reading: No Single Currency Regime is Right for All Countries or At All Times, by Jeffrey Frankel (1999) https://www.nber.org/papers/w7338

Students who want to study further, or need some textbook as a reference, recommended books are as follows:

Caves, Frankel and Jones, “World Trade and Payments,” Pearson College Division (Used in Kennedy School of Government, Harvard university (MA Level))

Krugman and Obstfeld, "International Economy: Theory and Policy". (any version is fine)

Both are available at Amazon, but make sure you purchase from Book Depository because there are many "fake" books sold by individual seller.

I also strongly recommend you read the Economist (The UK version), the IMF's World Economic Outlook, to make yourself understand the current status of Global Economy.

There will be four “quizzes” (non-pre-announced mini-test, which is easy enough for you to answer if you understand the previous class). So I recommend you come to the class with a good understanding of what you have learned in the previous classes. The grading will be based on the final exam (40%), quizzes (10% x 3=30%) and class participation (discussion, etc.)(30%).

At the beginning of the class, we will have discussions (or I may ask you to answer my question) about what we have learnt in the previous class. If you find something in the class to be confusing, I strongly encourage you to raise your hand and ask questions. This will help other students too, and this will give you some score for the participation.

Preparatory study and review time for this class are 2 hours each. During the class, using laptop is permitted, but not recommended. Students are expected to bring the hard-copy of PDF (which will contain three slides per page) and take notes.

Chatting in the class with your classmates and usage of the smartphone (including photographing the blackboard) are prohibited. If I find it is disturbing other students, I will ask you to leave the class. Usage of laptop is not permitted, but not encouraged.

(1) Attendance is important in this course. There will be four quizzes (not pre-announced mini tests) during the semester.
(2) Using smartphone during the class and talking to your classmates are strictly prohibited, and I may ask you to leave the classroom if I find it disturbing to other students.

(3) Academic Integrity
You are expected to be honest in all of your academic work. Allegations of alleged academic dishonesty will be subject to sanctions, including failing.

(3) Disability Statement
If you are a student who needs accommodations, please talk with me and present your letter of accommodation as soon as you can. In order to provide test accommodations, I need the documentation over 48 hours in advance; accommodation cannot be made retroactively. If you have questions about documenting a disability or requesting accommodations, please contact the Administration Office and talk to me immediately as the class starts.

There are no prerequisite class.