Makro-Pic Open Economy Macroeconomics

Thursday 10:15 - 12:00, Room ZHG 004
Exercises: Wednesday 14:00-16:00, Room ZHG 101
First lecture: October, 26. No lecture October, 19th !
Textbook: International Macroeconomics by Schmidt-Grohe, Uribe, and Woodford (SUW, Version April 2016)
Additionally, a few parts from Obstfeld and Rogoff (1996), Foundations of International Macroeconomics, MIT Press; and selected original journal articles.

Course Plan

1. The Balance of Payments

Reference: SUW Chapter 1 and 2
slides

2. A Theory of Current Account Determination

Reference: SUW Chapter 3 and 5
slides

3. Current Account Determination in a Production Economy

Reference: SUW Chapter 4
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4. External Adjustments in Small and Large Economies

References: SUW Chapter 6
Aguiar, M., and Gopinath, G. (2007). Emerging Market Business Cycles: The Cycle Is the Trend. Journal of Political Economy, 115(1), 69-102.
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5. Twin Deficits: Fiscal and Current Account Imbalances

Reference: SUW Chapter 7
slides

6. International Capital Market Integration

Reference: SUW Chapter 8
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7. Financial Development and Global Imbalances

Reference: Mendoza, E. G., Quadrini, V., and Rios-Rull, J. V. (2009). Financial Integration, Financial Development, and Global Imbalances. Journal of Political Economy, 117(3), 371-416.
slides

8. Capital Account Liberalization and Growth -- Why doesn't capital flow from rich to poor countries?

References: Lucas, R. E. (1990). Why doesn't capital flow from rich to poor countries?. American Economic Review, 80(2), 92-96.
Caselli, F., and Feyrer, J. (2007). The Marginal Product of Capital. Quarterly Journal of Economics, 122(2), 535-568.
Rodrik, D., and Subramanian, A. (2009). Why did financial globalization disappoint?. IMF staff papers, 56(1), 112-138.
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9. Determinants of the Real Exchange Rate

Reference: SUW Chapter 9
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10. Aggregate Demand Shocks and Real Exchange Rates

Reference: SUW Chapter 10
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11. Exchange Rate Policy and Unemployment

Reference: SUW Chapter 11
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12. The European Balance of Payments Crisis

References: H.-W. Sinn et al., 2012, The European Balance of Payments Problem. EEAG Report 2012, Chapter 2.
(with updates from H.-W. Sinn, 2015, The Euro Trap).
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13. Sovereign Debt: Conventional Theories

References: SUW, Chapter 12
Maurice Obstfeld and Kenneth Rogoff, 1996, Foundations of International Macroeconomics, Chapter 6.2.
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14. Sovereign Debt: New Developments

Reference: Panizza, U., Sturzenegger, F., and Zettelmeyer, J., 2009, The economics and law of sovereign debt and default; Journal of Economic Literature 47-47.
Gennaioli, N., Martin, A., and Rossi, S., 2014, Sovereign default, domestic banks, and financial institutions.
Tirole, J., 2012, Country solidarity, private sector involvement and the contagion of sovereign crisis.
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15. Monetary Policy and Exchange Rate Determination

Reference: SUW Chapter 13
slides

Material from 2016:

Excursion: Trump and the Current Account


slides

Guest lecture (Cheng Wang, Fudan University): Dynamics of Sovereign Default


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