Advanced International Macroeconomics and Trade
Study Board of Market and Management Anthropology, Economics, Mathematics-Economics, Environmental and Resource Management
Teaching language: English
EKA: B560002112, B560002102
Censorship: Second examiner: None
Grading: 7-point grading scale
Offered in: Odense
Offered in: Autumn
Level: Master
Course ID: B560002101
ECTS value: 10
Date of Approval: 26-03-2019
Duration: 1 semester
Course ID
Course Title
Teaching language
ECTS value
Responsible study board
Study Board of Market and Management Anthropology, Economics, Mathematics-Economics, Environmental and Resource Management
Date of Approval
Course Responsible
Offered in
Level
Offered in
Duration
Mandatory prerequisites
Recommended prerequisites
Microeconomics, Macroeconomics, International economics, Statistics & Econometrics (or similar courses) are recommended.
In particular, the student is expected to be familiar with the consumption theory and the production theory that are central to any microeconomic course. Furthermore, the student should be familiar with different types of markets: perfect competition, monopoly, oligopoly, monopolistic competition.
Students should be able to discuss macroeconomic shocks in models of the closed or open economy in a graphical, verbal, and formal way. For example they know how to use Cramer’s rule to compute multipliers. They have some knowledge about the effectiveness of monetary and fiscal policy in macro models of the open economy under fixed and flexible exchange rate regimes.
Students are also expected to be familiar with basic international trade theory and policy under perfect and imperfect competition. They should be able to explain why countries trade, what the gains of trade are, and how international trade affect the income distribution. Furthermore, they should have knowledge about the effect of tariffs and quotas.
The mathematical knowledge of function optimization with or without constraints constitutes therefore an asset. Students are able to run OLS regressions and interpret regression output in a statistical software such as “R” or STATA.
These are all competences and skills obtained in the bachelors' courses Microeconomics (course no. 9115501 / B540008101) and Mathematics (course no. 9105701 / B540006101), International economics (course no. 9342301 / B540022101), Statistics & Econometrics.
Aim and purpose
One block will run under the label “New Macroeconomic Thinking” and we will contrast pre- and post-crisis views on the field of macroeconomics.
We will use Blinder’s article “ls There A Core of Practical Macroeconomics that We Should All Believe?” as a starting point and refresh our knowledge with respect to the common view on macroeconomics before the crisis. Blanchard et al. (2010) should serve as a first reference on the pots-crisis view on macroeconomics.
Afterwards we will opt in the class for the further root of departure. One main focus will be the financial crisis including banking, currency and sovereign debt crises. We will also discuss the policy implications and policy tools to avoid such crises.
We will shed light on the monetary policy rules such as the Taylor (1993) rule and will use this concept to estimate country specific interest rates for each member of the Euro area. This empirical examination will question, whether the euro area is an optimal currency area (Nechio 2011).
We will also work on issues such as the size of fiscal multipliers (Alesina/Ardagna (2010) versus Gravelle/Hungerford 2011).
A second block might also deal with topics related to foreign exchange (FX) market:
- FX expectations
- Forward Rate premium puzzle
- PPP puzzle
Another block will deal with various topics realted to international trade theory models and international trade policy.
Content
The course is an advanced course in international macroeconomics and covers the following models:
- IS/LM and AS/AD model
- Mundell/Fleming model, monetary model
- Currency Crisis models
- Monetary policy rules (Taylor rule)
- Purchasing Power Parity, Uncovered Interest Rate Parity
The class covers elements of trade theory policy:
- Import tariffs and import quotas
- Gains from Trade and Regional Agreements
- Strategic Trade Policy and Antidumping
Learning goals
Description of outcome - Knowledge
Demonstrate knowledge about the models of international macroeconomics and trade:
- By reading selected chapters of textbooks as well as academic papers the students will gain a good understanding of the models of international macroeconomics and international trade and their implications. This knowledge will be re-inforced during group exercises and lectures by highlighting the central assumptions and insights of each model. Students can close their knowledge gaps by asking questions and getting answers, either during small group discussions, lectures or office hours.
- During class discussions students will gain a good understanding of the main policy implications of each model and are able to compare models outcome. During lectures, we will especially highlight the basis of these different outcomes by pointing to the different model structures and assumptions.
Description of outcome - Skills
Demonstrate skills that enable students to
- Apply their knowledge to the reading and analysis of journal articles in the literature covered.
- Analyze complex micro and macroeconomic problems by applying several theoretical or empirical methods.
- Should have the skills to conclude about appropriate policy response in the different settings.
Description of outcome - Competences
Demonstrate competences that enables students to:
- Apply their knowledge to other contexts, like news from the media, figures released in the press or in the statistics.
- Describe and explain their solution of case studies in a written or oral way.
Literature
Examples:
Olivier Blanchard, Giovanni Dell’Ariccia, and Paolo Mauro (2010): Rethinking Macroeconomic Policy, IMF Staff Position Note, February 12, 2010, SPN/10/03
Nechio, Fernanda: Monetary Policy When One Size Does Not Fit All
FRBSF ECONOMIC LETTER, 2011-18, published: June 13, 2011.
Taylor, John B. (1993): Discretion versus policy rules in practice, Carnegie-Rochetser Conference Series on Public Policy Vol. 39, 195 -214.
Jane G. Gravelle, Thomas L. Hungerford (2011): Can Contractionary Fiscal Policy Be Expansionary? June 6, 2011 Congressional Research Service
7-5700, www.crs.gov R41849
Alberto Alesina and Silvia Ardagna (2010), Large Changes in Fiscal Policy: Taxes versus Spending, in Tax Policy and the Economy, ed. Jeffrey R. Brown, vol. 24 (Chicago: University of Chicago Press, 2010), pp. 35-68.
Various Case Studies.
The Taylor rule in the year 2015: Still a benchmark for monetary policy?
When one size does not fit all – Monetary policy for a heterogeneous group of countries
The Swiss Currency Crisis
The Russian Bear: Already Dead or Still Alive?
Teaching Method
The teaching will be conducted by several teachers.
In order to facilitate the exchange of thoughts all students are expected to use name tags.
In order to document the attendance pattern of the class members, a signature list will be passed around at the beginning of each lecture.
Workload
Scheduled classes:
3 lectures weekly in 15 weeks.
Workload:
Teaching activities result in an estimated distribution of the work effort of an average student as follows:
Lectures - 45 hours
5 smaller Assignments - 80 hours
1 larger Assignment - 80 hours
Preparation & Reading - 75 hours
Total 270 hours.
Examination regulations
Exam
Name
Exam
Timing
Five smaller group assignments (part 1)
Exam: During lectures
Reexam: February
One larger group assignment (part 2)
Exam: January
Reexam: February
Rules
-3 is not allowed, 00 is not allowed
Tests
Five smaller group assignments - part 1
Name
Five smaller group assignments - part 1
Form of examination
Take-home assignment
Censorship
Second examiner: None
Grading
7-point grading scale
Identification
Student Identification Card - Date of birth
Language
English
Duration
Date for submission will appear from the examination plan.
Length
No limitations.
Examination aids
All exam aids allowed.
Assignment handover
Course page in Blackboard.
Assignment handin
Via SDUassignment in the course page in Blackboard.
ECTS value
5
Additional information
Part 1 weighs 50% in the final grading of the course.
Five smaller group assignments.
Written in groups of 4-5 students (the instructor can decide exemptions).
Groups are formed by students. If students are unable to form groups, the instructor can form groups.
It must be clearly stated, who is responsible for which part in order to make an individual assessment.
All students have to have an active role when a group has to present its solution. In case that a student does not take an active role in the presentation or is absent, the student can only earn 75% of the credit of the group.
Re-examination
Form of examination
Take-home assignment
Identification
Student Identification Card - Exam number
Duration
24 hour individual take-home
Examination aids
All exam aids allowed. However, it is not allowed to communicate with anybody
Assignment handover
Course page in Blackboard.
Assignment handin
Via SDUassignment in the course page in Blackboard.
Additional information
Part 1 weighs 50% in the final grading of the course.
EKA
B560002112
One larger group assignment (part 2)
Name
One larger group assignment (part 2)
Form of examination
Take-home assignment
Censorship
Second examiner: None
Grading
7-point grading scale
Identification
Student Identification Card - Date of birth
Language
English
Duration
Date for submission will appear from the examination plan.
Length
No limitations.
Examination aids
All exam aids allowed.
Assignment handover
Course page in Blackboard.
Assignment handin
Via SDUassignment in the course page in Blackboard.
ECTS value
5
Additional information
Part 2 weighs 50% in the final grading of the course.
One longer group assignment: Writing a case study and a teaching note.
Written in groups of 4-5 students (the instructor can decide exemptions).
It must be clearly stated, who is responsible for which part in order to make an individual assessment.
The weight of 50% for the longer group assignment might be split as follows: 20% for a first draft of the case & teaching note, 10% for comments to the draft of another group, 20% for the final draft of the case & teaching note.
Re-examination
Form of examination
Written examination on premises
Identification
Student Identification Card - Exam number
Duration
3 hours.
Examination aids
All exam aids allowed. However, it is not allowed to communicate with anybody.
Assignment handover
In the examination room.
Assignment handin
Via SDUassignment in the course page in Blackboard.
Additional information
Part 2 weighs 50% in the final grading of the course.
EKA
B560002102
External comment
NOTE - This course is identical with the former course 9110101 Advanced International Macroeconomics and Trade.
Students having passed the graduate course International Trade Theory and Policy (8907802) cannot be examined in this course.
Used examination attempts in the former identical course will be transferred.
Courses that are identical with former courses that are passed according to applied rules cannot be retaken.
The student is automatically registered for the first examination attempt when the student is registered for a course or course element with which one or more examinations are associated. Withdrawal of registration is not possible, and students who fail to participate in an examination have used one examination attempt, unless the University has made an exemption due to special circumstances.
The student is responsible for registering for 2nd and 3rd examination attempt.
Evaluation at the re-exam may be changed.