1.

Class title

International Macroeconomics

Class code

EC 9xx

   credit value

12

   standard / level

5

   core / optional

Optional

   semester

2

   pre-requisites

31 945 Macroeconomics Environment 2a

Department:

Economics

Names of lecturers (*in charge):

Peter McGregor * and Graeme Roy

Telephone number:

0141 548 3848

email address:

p.mcgregor@strath.ac.uk

Administrator:

Joyce Russell

Telephone number:

0141 548 3865

email address:

j.m.russell@strath.ac.uk

2.

Rationale (including Peer/External comment)

This is an optional class in the MSc Economic Management and Policy degree programme. It is a required class for student pursuing the pathway in International Financial Economics.

3.

Class description/introduction (including cohesion with rest of course)

This class builds on the macroeconomics covered in ME1 and ME2a, focusing on open-economy macroeconomics. Review and analysis of current international macroeconomic and financial issues will be presented, covering both policies and events. Topics covered will include: exchange rates determination; emerging market economies financial crises; causes of currency, banking and financial crises; and issues in the globalization of financial markets. These topics are integrated into a theoretical framework that stresses international factors from the start. Examples from Europe, the US , Japan , and China will be used to enhance knowledge of the world economy.

4.

Class aims

• The principal aim of the class is to provide students with an in depth look at the important economic theory and policy issues bearing on the international macroeconomics – that is relationships between economies. This will involve mastering some basic macroeconomic theory, including treatment of market expectations, and using this to analyse macroeconomic behaviour and performance. The emphasis throughout the course will be to use economic theory to provide a structure and framework for understanding macroeconomic data and events.
• A secondary aim is to provide students with further opportunity to work with and interpret macroeconomic data and to continue to develop report writing skills suitable for professional economists.

5.

Learning outcomes

1. subject specific knowledge and skills

Students should be able to

1. understand the asset-market approach to exchange rate determination and the central role for expectations.
2. discuss international macroeconomic policy issues, including the dynamics of currency crises and issues relevant to the choice of exchange rate regime for emerging markets and advanced economies.

2. cognitive abilities and non-subject specific skills

Students will

1. develop problem-solving skills using abstraction and analytical skills;
2. gain experience in delivering coherent arguments in report writing;
3. enhance their ability to think logically, analytically and critically;
4. enhance their ability to present analysis and write coherent reports and essays under tight time constraints.

6.

Teaching and learning methods

This class will be taught using a combination of 12 hours of lectures and a total of 5 tutorials.

Lectures are intended to provide students with an overview of the various topics covered in the class, and the material presented in them is by no means to be considered exhaustive. Students are expected to do additional directed and independent reading as well as pre–reading to prepare for lectures.

The tutorials are an extremely important part of the class. Their value depends on students’ active participation in the discussion and work of the tutorial. Preparation of the tutorial problems and discussion questions is also essential for the understanding of the tools and concepts presented in lectures.

7.

Indicative Content/Structure of class/Lecture Programme

1. Long-run determinants of exchange rates
2. Exchange rates in the short run
3. International capital markets and international banking
4. Topics in international macro policy
5. Currency crises and contagion

8.

Resources (staff/library/computing/a-v/accommodation)

Increase in resources, offset by savings from withdrawal of MSc International and Financial Economics programme.

9.

Indicative reading list

• Paul R. Krugman, and Maurice Obstfeld (2005) International Economics Theory and Policy, 7th edition, Addison Wesley.
• Paul Hallwood and Ronald MacDonald (2000) International Money and Finance, 3^rd edition, Blackwell.

Additional directed reading, primarily journal articles, will be provided for each topic.

10.

Assessment

The overall mark for this class is based on two components: an assessed essay and a final examination, each accounting for 50% of the total mark.

Assessed essay

An assignment will take the form of a 2,500 word essay.

Examination

A two-hour written examination will be held in May.  This accounts for 50% of the final mark for the class.

including, reassessment

All MSc EMP classes have one re-sit opportunity (subject to a limit on total number of classes that can be resat).

11.

Matrix of learning outcomes/assessment

teaching/ learning method

Evidence of outcome

subject specific knowledge and skills

understand theoretical models of exchange rate determination

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discuss international macroeconomic policy issues, including the dynamics of currency crises and issues relevant to the choice of exchange rate regime for emerging markets and advanced economies.

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cognitive abilities and non-subject specific skills

development of problem-solving skills using abstraction and analytical skills.

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acquisition of experience in delivering coherent arguments in report and essay writing.

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enhancement of ability to think logically, analytically, and critically.

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ability to organise material and prepare essays under tight time constraints.

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