Objective of Study
International Finance is a discipline that studies the phenomena, laws and rules of the monetary and capital movements among countries. The subject of international finance curriculum is generally related to monetary and macroeconomic relations between countries in the world. There are some constantly evolving subjects to deals with real-world issues.
Features
This course covers the most importance recent developments in international finance. Here we emphasize three features:
• We strive to embody the comprehensiveness of the subject. This course covers not only the contents of macro economy such as balance of payments, international capital flow and international policy coordination in an open economy, but also the contents of micro economy such as foreign exchange, foreign exchange market transactions.
• This course incorporates some new topics of international finance, such as the effects of exchange rate fluctuation, and the analysis of China's balance of payments in recent years.
• This course combines theory with practice. Based on the introduction of relevant principles, some practical problems are provided in the chapters. This is helpful to grasp the theoretical knowledge better and improve the ability of practice.
Contents
Contents of International finance include eight chapters: Foreign exchange markets and foreign exchange transactions,Exchange rate determination、Balance of payment、 International capital flows、International financial crisis、International monetary systems、Exchange rate system and Macroeconomic policy in an open economy.
There are 54 lectures in the curriculum.
Lecture Goals
The goals are to make students grasp the overall theory and knowledge comprehensively, understand the important role of international monetary and finance in national economy development. Then students can apply the basic theory and policy to analyze some international finance events, and obtain the abilities to deal with related problems in an open economy.
Outline
Chapter 0 Introduction
Chapter 1 Foreign Exchange Market and Foreign Exchange Transaction
1.1 Foreign exchange
1.2 Foreign exchange market
1.3 Spot and forward transactions
1.4 Futures transaction
1.5 Foreign currency swaps
1.6 Foreign currency options
1.7 Interest arbitrage
1.8 Hedging and speculation
Unit Test 1
Chapter 2 Exchange Rate Determination
2.1 What determines exchange rates?
2.2 Purchasing-power parity theory
2.3 Asset market approach
2.4 Exchange rate overshooting
2.5 Forecasting foreign exchange rate
2.6 International comparisons of GDP: PPP
Unit Test 2
Chapter 3 Balance of Payments
3.1 Introduction
3.2 Balance-of-payments accounting principles
3.3 Current account
3.4 Capital and financial account
3.5 Recording of transaction in the balance of payments
3.6 What is meant by a deficit or surplus？
3.7 Adjustment mechanisms to the balance of payments
3.8 Elasticity approach to the balance of payments
3.9 Absorption approach to the balance of payments
Unit Test 3
Chapter 4 International Capital Flows
4.1 International capital flow definition
4.2 Gains and losses from international lending
4.3 Theoretical benefits and problems
4.4 Capital flows: Push vs pull factors
Unit Test 4
Chapter 5 Financial Crises
5.1 International lending to developing countries
5.2 Financial crisis: what can and does go wrong
5.3 Resolving financial crisis and reducing the frequency
5.4 Case Study: the financial crisis of 2008
Unit Test 5
Chapter 6 International Monetary System
6.1 The gold standard
6.2 Bretton woods system
6.3 The collapse of Breton woods and the recent period of floating rate
6.4 The European experience in currency
6.5 International reserves
Unit Test 6
Chapter 7 Exchange-Rate Systems
7.1 Choosing an exchange rate system
7.2 Fixed exchange-rate system
7.3 Floating exchange rates system
7.4 Managed floating rates system
Unit Test 7
Chapter 8 Macroeconomic Policy in an Open Economy
8.1 Economic objectives and instrument
8.2 IS-LM-BP model
8.3 Effect of monetary and fiscal policy
8.4 International economic policy coordination
Unit Test 8
Teaching Materials
• Thomas A. Pugel. International Finance (Seventeenth Edition). China Renmin University Press,2020.
• David Eiteman, Arthur Stonehill, Michael Moffett. Multinational Business Finance (12th Edition).
China Machine Press, 2016.
• Robert J Carbaugh. International Finance (Fifteenth Edition). China Renmin University Press, 2017.
• Keith Pilbeam. International Finance ( Fourth Edition). China Renmin University Press, 2017.
