Seminar in Open Economy Macroeconomics

Transcription

1 1 Summer Semester 2008, Prof. A.Schweinberger Master s Programme in International Economic Relations and Bachelor/Diplomstudiengang VWL Seminar in Open Economy Macroeconomics I shall be offering a seminar in the summer semester There will be a preliminary meeting and an introductory lecture in the first and/or second week of the summer semester. The exact dates will be fixed and published before the beginning of the summer semester. My office is F259. The presentation of papers by the students will take place between June 23 and July 7. A detailed schedule will be arranged with the participating students in the preliminary meeting. A course in basic macroeconomics is a prerequisite of the seminar. The maximum student number is 18. Open economy macroeconomics is concerned with many topical issues such as causes and effects of currency crises, effectiveness of fiscal or monetary policies in open economies with fixed or flexible exchange rates with or without perfect capital mobility, optimal common currency areas, the working of the world financial system etc. One of the key features of open economy macroeconomics is that there are many different modeling approaches, e.g.: a. The standard extensions of IS LM models to open economies, i.e.: the Mundell Fleming model. This model exists in many different variants, b. Asset market equilibrium models, c. Dynamic models such as the Dornbusch overshooting model or the Branson portfolio balance model, d. Models based on microeconomic foundations, i.e.: models of intertemporal optimization, e. Open economy dynamic general equilibrium models with imperfect competition and nominal rigidities (the Obstfeld Rogoff Redux model). My main objective in this seminar is to cover all these various theoretical approaches and applications. What follows is a preliminary list of seminar topics. Please note that students may also propose topics but the final choice of a topic is always subject to my approval. ALSO NOTE THAT ALL THE MAIN TEXTBOOKS WILL BE PUT IN A SEMESTERAPPARAT (RESTRICTED LOAN SECTION) OF THE LIBRARY. PLEASE DO NOT REMOVE THEM FROM THE LIBRARY. If you are interested in participating in my seminar, please choose one of the topics listed below and send me an . I shall try to accommodate your wishes, but a final assignment of topics to students will take place only in the preliminary meeting at the beginning of the next semester. It is important to understand that the list of references is by no means exhaustive. My a.schweinberger at uni konstanz.de

2 2 Topic 1 The Mundell Fleming model with wage and price adjustment. International macroeconomics, theory and policy, by Victor Argy, Routledge, chapter 8. Topic 2 A two country Mundell Fleming type model. Victor Argy op.cit. chapter 13 Open economy Macroeconomics by Rudiger Dornbusch, pages 199 ff. Topic 3 The overshooting model. Rudiger Dornbusch op.cit. pages 202 ff. D. Romer: Advanced Macroeconomics, chapter 5. P.R. Krugman and M. Obstfeld: International economics, theory and policy, Addison Wesley, part II, chapter 14. Topic 4 The Monetary Approach to the Balance of payments R. Dornbusch op. cit. chapter 7 Topic 5 The Branson portfolio balance model Victor Argy, op. cit. chapter 19 Topic 6 The asset market equilibrium model

3 3 P.R. Krugman and M. Obstfeld, op. cit. chapters 13 and 14. Topic 7 Microeconomic foundations of open economy macroeconomics, intertemporal trade and the current account balance. Maurice Obstfeld and Kenneth Rogoff: Foundations of International macroeconomics, chapter 1, sections 1.1., 1.2. and 1.3. Topic 8 Intertemporal trade and the current account balance. Obstfeld and Rogoff op.cit. sections 1.4., 1.5. and 1.A. Topic 9 The new open economy macroeconomcis with imperfect competition and nominal rigidities. Philip R. Lane (2001): the new open economy macroeconomics: a survey, Journal of International economics, 54, page Topic 10 Various theories of causes of currency crises S. Brakman, H. Garretson, Charles van Marrewijk and Arjen van Witteloostuijn: Nations and Firms in the Global Economy, Cambridge University Press, chapters 8 and 9. P. Krugman (1979): A model of balance of payments crises, Journal of Monmey, Credit and Banking, 11, P. Krugman (1996): Are currency crises self fulfilling? NBER Macroeconomics Annual M. Obstfeld (1996): models of currency crises with self fulfilling features, European economic Review. Topic 11 Causes and effects of the Asian financial crisis. Topic 12 Causes and effects of the Ruble Crisis in 1998.

4 4 Topic 13 Causes and effects of the Mexican Peso crisis. Topic 14 Gains from opening a small country to free international trade: a two sector neoclassical model of growth. Impact and long run effects on welfare. Handbook of International Trade, edited by J. Jones and P. Kenen, Vol. 1, North Holland, chapter by Alisdair Smith. Topic 15 J. Ventura (1997): growth and interdependence, Quarterly Journal of economics, 112, Topic 16 Endogenous Growth and International Trade: a Survey by Ngo Van Long and K. Y. Wong in Bjame Jensen and K.Y. Wong (eds.), Dynamics, Trade and Growth, University of Michigan Press. P. Aghion and P. Howitt: Endogenous Growth theory, The MIT press, chapter 11. Topic 17 Empirical studies of exchange rates: prices behavior, rate determination and market efficiency. Handbook of International economics, Vol. II, ed. By R. Jones and P. Kenen, North Holland, chapter 19. Topic 18 Economic Interdependence and coordination of economic policies Handbook of International economics, Vol. II, op. cit. chapter 23. Topic 19 The theory of optimal common currency areas. Is the Euro zone an optimal common currency area? Topic 20 The causes and world wide effects of the subprime mortgage crisis in the USA. Policy options. Topic 21 Evaluate the role of the IMF in the handling of the Asian financial crisis in 1997 and the Rubles crisis in Do you agree with the critique put forward by J. Stiglitz?

5 5 Topic 22 How effective are China s capital controls? By Guonan Ma and Robert N. McCauley, China linking markets for growth, in Ross Garnaut and Ligang Song eds.(2007), ANU Press. Topic 23 China s real exchange rate By Jane Golley and Rod Tyers, China linking markets for growth, in Ross Garnaut and Ligang Song eds. (2007), ANU Press. Topic 24 Reasons for international capital controls a political economy approach. The political economy of capital controls, by Günter G. Schulze, Cambridge University Press, chapters 1 3. International capital and aid flows, chapter 12, part III, pages in Political economy in Macroeconomics, by Allan Drazen, Princeton University Press. Topic 25 Modelling the determination of exchange rates and the efficient asset market hypothesis. David K. H. Begg: the Rational Expectations Revolution in Macroeconomics, theories and evidence, Philip Allan, chapter 8. Victor Argy, op. cit., part VI, pages 327 ff.