International Finance - EC548

Location Term Level Credits (ECTS) Current Convenor 2018-19 2019-20
Canterbury Spring
View Timetable
6 15 (7.5) DR W Jiang


EC500 Microeconomics and EC502 Macroeconomics





When we open a newspaper or an economics and business magazine, we often read topics related to monetary and financial relations between countries. A good deal of political debate is also focused on the various aspects that constitute international finance. However, these debates do not allow us to understand their theoretical underpinnings. This is what we are going to study in this module from a rigorous perspective. The first part of the module deals with some basic concepts of international macro such as the balance of payments and exchange rates, and arbitrage conditions. We then go on to analyse the impact of opening up the economy on the alternative macroeconomic policies available. In that part we also analyse the main factors that determine the exchange rates between currencies, and the power of the different models proposed. The third part of the module deals with ‘hot topics’ in international finance. We discuss the benefits and drawbacks of fixed and floating exchange rates, the concept of a speculative attack, how to understand current account imbalances from an inter-temporal perspective, and how world macroeconomic imbalances drove the 2008/09 international financial crisis and recent sovereign debt crisis in Europe.

The module has both a theoretical and an applied emphasis in order to insert the available theories into the real problems of the world economy. It does not analyse the detailed workings of international financial markets or questions related to firm financial management in international capital markets but students interested in these aspects can acquire basic foundations that are fundamental in understanding the context in which firms and governments work.


This module appears in:

Contact hours

11 lectures,
6 seminar classes

Method of assessment

20% In Course Test
80% Examination (2 hours)

Preliminary reading

L Copeland, Exchange Rates and International Finance (5th ed), Prentice Hall, 2008
K Pilbeam, International Finance (4th ed), Palgrave Macmillan, 2013

See the library reading list for this module (Canterbury)

See the library reading list for this module (Medway)

Learning outcomes

By the end of the module you will:
• have built upon previously taken intermediate macroeconomic courses and improved the ability to use macroeconomic analysis
• have an understanding of the basic theory of international macroeconomics and finance
• have a theoretically and empirically rooted understanding of the main debates and problems of open economy macro and policies, exchange rate determination, monetary integration and international financial relations
• be able to assess and rigorously examine the main debates on international financial problems arising in the newspapers and specialised magazines (critical thinking)
• have improved your learning skills, especially those concerned with the understanding and application of macroeconomic models to real life problems. This will also enhance your analytical, numeracy and problem solving skills through the working and application of the models taught
• have improved your writing skills from essay and exam writing and communication skills from seminar debates
• be able to undertake postgraduate (Masters) degrees with macroeconomic contents.

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