International Financial Policy


KANO, Takashi

Credits / Language / Semester

2Credits / English / Summer


This course introduces recently-developed theoretical models of international finance and open macroeconomics and reviews their empirical investigations. In particular, the course focuses on models of the current account and the real and nominal exchange rates.

(1) Mathematical and statistical preliminaries
(2) Two-period open economy models
(3) Intertemporal approach to the current account
(4) Empirical investigations of the intertemporal approach
(5) International real business cycle models
(6) Uncertainty in international financial markets
(7) Low of one price, PPP, and real exchange rates
(8) Money in international financial markets: nominal exchange rates
(9) Empirical investigations of exchange rate models
(10) Foreign exchange market efficiency

The course is organized mainly for master students. Knowledge of undergrad-level micro and macro economics and econometrics is prerequisite.

Teaching Methods



Mid-term and final exams

Required Text

Obstfeld, M. and Rogoff, K., Foundations of International Macroeconomics, 1996, MIT Press.
Frenkel, J.A. and Razin, A., Fiscal Policies and Growth in the World Economy, third edition, 1996, MIT Press.
Mark, N.C., International Macroeconomics and Finance: Theory and Econometrics Method, Blackwell.
Walsh, C. E., Monetary Theory and Policy, 2001, MIT Press.
Romer, D., Advanced Macroeconomics, 2001, McGraw-Hill.
Hamilton, J.D., Time Series Analysis, 1994, Princeton University Press.

Related Resources