INTERNATIONAL TRADE AND ECONOMIC OF DEVELOPMENT - 2

The course International Trade and Economic of Development-2 is an introduction to the macroeconomics of open economies and international finance. The main objective of the course is to develop simple macroeconomic models of open economies that can be applied to international economic phenomena. We will examine balance of payments, exchange rate determination, the effect of fiscal and monetary policies under fixed and floating exchange rate regimes, balance of payments crises, international macroeconomic dependence, financial globalization, and the challenges facing developed and developing economies. Recent topics such as the euro area crisis, the persistence of U.S. current account deficits, exchange rate policy, and the creation and overall performance of the euro will be covered.

International Trade and Economic of Development-2 together with International Trade and Economic of Development-1 form a single 12-credit course (12 CFU) with shared objectives, learning outcomes, and teaching methods as described below.

1. Knowledge and Understanding
1.1 Demonstrate a thorough understanding of the implications of monetary and fiscal policies within the framework of the international economy.
1.2 Analyze how various exchange rate regimes affect price levels, trade volumes, and balance of payments dynamics.
1.3 Evaluate the role of international institutions (e.g., the International Monetary Fund and the European Central Bank) in addressing balance of payments crises.

2. Applying Knowledge and Understanding
2.1 Identify and assess the determinants of supply and demand in order to interpret trends in trade balances and the Net Foreign Asset positions of individual countries.
2.2 Examine import and export flows in the context of prevailing fiscal and monetary policies.
2.3 Critically assess the potential distortionary effects of economic policies implemented in both developed and developing economies, particularly with regard to global imbalances.

3. Making Judgements
3.1 Interpret the functioning of global markets through the lens of key macroeconomic and geopolitical variables.
3.2 Critically reflect on existing and potential policy responses to disparities in balance of payments and levels of economic development.
3.3 Evaluate the contribution of international institutions to the governance and stability of the international monetary system.

Mandatory priority exam: see https://www.unive.it/pag/32287/
Students are suggested to know basics of macroeconomics

Syllabus

1. Introduction: National Accounting and Balance of Payments.

2. International capital movements

3. Global current account imbalances and the transfer problem

4. The intertemporal approach of the current account

5. Exchange rates and purchasing power parity

6. Flexible exchange rates

7. Fixed exchange rates

8. The International Monetary Fund

9. Crises and responses

10. Monetary Unions

11. Economic growth

12. Development economics

The textbook for the course is International Economics by Kenneth A. Reinert (Il Mulino, 2012), chapters 13-14-15-16-17-18-19-21.

Additional material (including some articles from the Financial Times or Economist and course notes) will be available through the course website. You are advised to check the website often for updates and additional material.

Final Exam (written).

Active participation in the course (reading articles, classroom interaction) will be rewarded with a bonus on the final grade.

written

1 to 17, ECTS equivalent: F
18 to 20, ECTS equivalent: E
21 to 23, ECTS equivalent: D
24 to 26, ECTS equivalent: C
27 to 28, ECTS equivalent: B
29 to 30 lode, ECTS equivalent: A+

Lectures and in-person teaching