Economics 344: Economics of International Finance Block 5 -- Jan. 21 - Feb. 13, 2002 Block 5 -- Jan. 22 - Feb. 14, 2001 Block 5 -- Jan. 24 - Feb. 16, 2000 Block 5 -- Jan. 18 - Feb. 10, 1999 Block 5 -- Jan. 19 - Feb. 11, 1998

International economics is considered a separate sub-field within economics. This arises because of the evolution of economic thought, issues which international boundaries and separate national entities introduce into the study of economics, and the distinctive theories and analytical tools which have been devised to deal with these issues. But there are many similarities between the type of economics applied within a nation or region and that applied to relations between nations or regions. Many of the problems to be solved at the international level are similar, as are the tools of analysis. Thus, international economics is an extension of what you have already learned in the basic principles course.

This course is concerned with international finance; a separate course deals with international trade. One objective in this course is to develop an understanding of the role which money plays internationally, including foreign exchange markets and balance of payments accounting. Another objective is to understand national adjustment mechanisms as they react to international conditions. In all of this, money is to be viewed similar to its domestic role as a facilitator of productive transactions. However, it will become evident that internationally as well as domestically, malfunctioning financial systems sometimes hinder rather than facilitate the efficient operation of economic processes.

A related objective is to evaluate in depth the various currency exchange rate systems which have in the past or presently do exist. There is a growing concern that flexible exchange rates are not an adequate basis for a stable and efficient international payments system, either multilaterally or for groups of countries such as Europe or NAFTA. Further, there are increasing calls for a return to some more fixed exchange rate system, with some on the extreme end calling for a return to the Gold Standard. It is essential that this debate be covered in this course, including the arguments for and against reform of existing arrangements.

Prerequisites: Principles of Economics

Instructor: Professor Dwight Brothers (dbrothers@ColoradoCollege.edu)

Updated : February 20, 2001