International Finance I (International Financial Policy)

Understand objectives and effects of key policies in international finance from both theoretical and empirical perspectives. In particular, this course focuses on a fundamental question: How does, and should, the international financial system play roles in two important macroeconomic phenomena, i.e., business cycle and economic growth? In addition, this course covers frequently discussed recent policy issues such as monetary union, international reserve, and spillovers of macroeconomic policies to other countries.

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It will be organized as in the following outline (subject to some changes). First two topics encompass a variety of basic concepts of the international financial system. The third topic studies deeper the mainstream international macroeconomics. Each topic will be based on a few academic papers. 1. International risk sharing and financial liberalization / globalization 　a. Basic theory and empirics of risk sharing 　b. Reasons for incomplete risk sharing: home bias, sovereign immunity 　c. International reserve / global savings gluts 　d. Welfare cost of business cycle 2. International development and financial liberalization / globalization 　a. Risk sharing and growth 　b. Capital flows and growth 　c. Productivity and finance 　d. Financial liberalization on growth and volatility 3. International business cycles 　a. Measurement and empirical regularities 　b. Open economy model of the current account 　c. Model of the international real business cycles 　d. Monetary policy in an open economy: optimal monetary policy/policy spillovers and coordination