International Finance - EC548

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


EC500 Microeconomics
EC502 Macroeconomics





The module introduces students to the theoretical underpinnings that constitute international finance and the nature and extent of monetary and financial relations between countries.

The module introduces basic concepts of international macroeconomics such as the balance of payments and exchange rates, and arbitrage conditions. It then proceeds to analyse the impact of opening up the economy on the alternative macroeconomic policies available. The main factors that determine exchange rates between currencies, and the power of different models are also considered. Finally, the module explores 'hot topics' in international finance including the benefits and drawbacks of fixed and floating exchange rates, the concept of a speculative attack, 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 apply 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.

The topics covered in the module include:
1. Open economy macroeconomics and policy.
2. Exchange rates determination theory and empirics.
3. Microfounded models of the current account.
4. International financial flows.
5. International indebtedness.
6. International financial crises
7. International monetary arrangements.


This module appears in:

Contact hours

10 lectures
6 seminars


This module is an elective for all Single and Joint Honours degree programmes in Economics.
This module is not available to students across other degree programmes in the University.

Method of assessment

In Course Test, (45 minutes) (20%)
Examination (2 hours) (80%)

Indicative reading

Copeland, L. (2008), Exchange Rates and International Finance (5th ed.), Prentice Hall.
Pilbeam, K. (2013), International Finance (4th ed., Palgrave Macmillan.
Feenstra, R.C. and A.M. Taylor (2008), International Economics, Worth Publishers.
Sarno, L. and Taylor, M (2002). The Economics of Exchange Rates, CUP.

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 be able to:

* demonstrate knowledge and understanding of basic theoretical concepts such as exchange rates, interest rates and capital movements in an international setting.
* synthesise and critically compare different economic analyses of issues relating to international finance and policy formation.
* critically assess and examine the main debates on international money and finance problems arising in the media newspapers and specialised magazines.
* understand the implications of capital flows for the international transmission of economic shocks.
* identify, analyse and understand macroeconomic policy coordination within a global context.

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