UEH Standard Programs

This course deals with the issues and problems related to the exchange rates and macroeconomics of the open economy. International macroeconomics focuses on answering questions, such as: What is the role of monetary and fiscal policy in an open economy? What determines the balance of payments, the level of economic activity, and inflation? Should countries fix or float exchange rates? First, the national income accounting (NIA) and the balance of payments (BOP) will be introduced to reinforce students’ knowledge. Next is the determination of exchange rates in international money markets (monetary approach); and international portfolio diversification (assets approach). Students will then be introduced to the models that help to determine the short-run and long-run exchange rates; how fiscal and monetary policies work and affect an open economy under different exchange rate regimes. The last and also very important part is to revisit the international monetary system with the reassessment of the role of USD vs. RMB.