Makro-Pic Open Economy Macroeconomics

Thursday 10:15 - 12:00, Room ZHG 002
Exercises: Thursday 16:00-18:00, Room ZHG 006
The first lecture will be on April 28th !
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

2. A Theory of Current Account Determination

Reference: SUW Chapter 3 and 5

3. Current Account Determination in a Production Economy

Reference: SUW Chapter 4 and 6
Aguiar, M., and Gopinath, G. (2007). Emerging Market Business Cycles: The Cycle Is the Trend. Journal of Political Economy, 115(1), 69-102.

4. Twin Deficits: Fiscal and Current Account Imbalances

Reference: SUW Chapter 7

5. International Capital Market Integration

Reference: SUW Chapter 8

6. 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.

7. Demographic Development and Global Imbalances

Reference: Mendoza, Auclert, A., Malmberg, H., Martenet, F., and Rognlie, M. (2021). Demographics, wealth, and global imbalances in the twenty-first century (No. w29161). National Bureau of Economic Research.

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.

9. Determinants of the Real Exchange Rate

Reference: SUW Chapter 9

10. Aggregate Demand Shocks and Real Exchange Rates

Reference: SUW Chapter 10

11. Exchange Rate Policy and Unemployment

Reference: SUW Chapter 11

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).

13. Sovereign Debt: Conventional Theories

References: SUW, Chapter 12
Maurice Obstfeld and Kenneth Rogoff, 1996, Foundations of International Macroeconomics, Chapter 6.2.

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, Journal of Finance 69(2), 819-866.
Tirole, J., 2012, Country solidarity, private sector involvement and the contagion of sovereign crisis.

15. Monetary Policy and Exchange Rate Determination

Reference: SUW Chapter 13

Special Lecture: The Russian--Ukrainian War: Open-Economy-Macro Issues

References: provided on lecture slides