1 Econ 322- International Finance Spring 2013 IntroductionAyse Kabukcuoglu
2 Goals of the course International finance is one of the many elective courses offered by CASE This course covers timely and important topics in international finance: exchange rates, the balance of payments, and the role of policy I would like you all to enjoy the course, learn some international finance and get good grades
3 Today’s lecture SyllabusTextbook, lecture notes, course evaluation (attendance, exams, assignments, quizzes), make-up policy, early final exams Econ202 and Econ322 A short intro to international finance
4 Textbook: International Macroeconomics, Robert C. Feenstra and Alan MTextbook: International Macroeconomics, Robert C. Feenstra and Alan M. Taylor (2012), Worth Publishers, 2nd Ed.
5 Authors Prominent international economistsProf. Robert Feenstra - University of California, Davis Prof. Alan Taylor - University of Virginia
6 The textbook Available at the bookstore Do you need to buy the book?We will cover 8-9 chapters (most of the book) It is fun to read… You will have homework assignments/study questions from the book Reading the book will definitely help you get a better grade
7 Lecture notes Slides (in pdf and ppt format)Detailed and regularly updated Will be posted after the lecture No substitutes to the class Course evaluation will not be based only on the material included in the slides Anything covered in the class, homework, quizzes, etc. will be important for the exams
8 Course website https://ais.ku.edu.tr/course/24439/Default.html(Or go to ‘courseware list’) All course material will be posted there lecture notes past exams study questions/assignments announcements
9 Study tips Study on a regular basisThe course material will grow very fast Each new topic will be related to the previous topic(s) Solve homework questions for self study Review the lecture notes and read the book Go to office hours for further help
10 Office hours My office hours: Tue 3.30 pm-5.30 pm (CAS 276)Or by appointment me for an appointment No office hours this week
11 Teaching assistant Cavit Baran ([email protected])Office hours will be announced later this week Responsible for grading
12 Evaluation Exams: 1 midterm + 1 finalMost questions involve problems with simple math Some short essay questions Closed notes/closed book, no calculators, no cheat sheets The midterm will be held in class (March 11, 2pm-3:15 pm) The final exam date TBA by the Registrar Final exam will be cumulative
13 Evaluation Homework and Quizzes4 or 5 homework with questions mostly from textbook exercises I may also assign readings (research papers, newspapers, etc.) The homework will not be graded A max. of 10 pop-quizzes related to the homework questions The lowest 2 of your quiz grades will be dropped
14 Grading Exams: 85% Pop quizzes: 15% (the lowest 2 will be dropped)max(35% midterm+50% final, 20% midterm+65% final) (i.e. If you have a dramatic improvement in your second exam grade relative to the first, I will take this into account) Pop quizzes: 15% (the lowest 2 will be dropped) Homework: 0%
15 Make-up policy Exams: If you have a valid excuse (e.g. health problem or family emergency), you may be eligible for a make-up Provide a document (e.g. medical report) if possible You must contact me ASAP when you miss an exam You can take only one make-up exam (if you miss two exams, the make up will be given for the midterm only) The make-up will be given at the end of the semester and will be cumulative (date and place TBA)
16 Make-up policy Quizzes:No make-up quizzes will be given under any circumstances However, the lowest two of your quiz grades will be dropped
17 Attendance and participationAttending the lectures and participating in discussions are important Although you will not be directly evaluated based on attendance/participation, they are essential for performing well in this course
18 Attendance and participationPlease make an effort to join discussions Do not hesitate to ask questions Try to pay attention to the class Please avoid all kinds of distracting behavior Talking to your neighbors constantly during the lectures Texting (switch off your cell phones!) Always coming to the class late
19 Pre-requisites Econ 202 (intermediate macroeconomics)Prior knowledge of intermediate macro will be assumed on topics such as IS-LM model Monetary and fiscal policy; their interactions with key macroeconomic variables National income accounting
20 Econ 322: International FinanceCourse outline The global macroeconomy The exchange rate Balance of payments, policy, etc. Special topics
21 Econ 322: International FinanceCourse outline The global macroeconomy a summary of this semester’s topics (Ch. 1)
22 Course outline 2. The exchange rateIntro. to Exchange Rates and the Foreign Exchange Market, Ch. 2 Exchange Rates I: The Monetary Approach in the Long Run, Ch. 3 Exchange Rates II: The Asset Approach in the Short Run, Ch. 4
23 Course outline Midterm exam covering chapters 1-4 March 11, in class
24 Course outline 3. Balance of paymentsNational and International Accounts: Income, Wealth, and the Balance of Payments,Ch. 5 Balance of Payments: Gains from Financial Globalization, Ch. 6 The Balance of Payments II: Output, Exchange Rates, and Macroeconomic Policies in the Short Run, Ch.7
25 Course outline 4. Hot topics in international macroeconomicsFixed versus Floating: International Monetary Experience, Ch. 8 Topics in International Macroeconomics (A closer look at issues such as the global financial imbalances, the global macroeconomy and the crisis, etc.) Ch. 11 (if time permits)
26 This course Is mainly on a country’s economic analysis in a global macroeconomic environment Will pay attention to Turkish economy to some extent Will have a heavy focus on the US, Europe as well as emerging economies such as China
27 Courses that you might be interested inEcon Money and Banking by Selva Demiralp Econ 480 – Economics of Institutions by Sumru Altug Econ 481- Turkish Economy by Kamil Yilmaz
28 Any questions?
29 Now: a brief look at the world economySome economic updates from the Federal Reserve Bank of Dallas (Readings will be posted) Focus on GDP growth, inflation, exchange rates and external imbalances Throughout the course, we will talk about theories and empirical evidence to understand the global economic phenomena Here are some examples:
30 GDP growth in the world
31 GDP growth and inflation for emerging economies
32 It is not only Turkey facing a currency depreciation…
33 Low inflation in Euro-Area
34 Chinese GDP growth
35 Capital flows to emerging economies
36 Euro-Area net exports