Economics 344: Economics of International Finance 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 field within economics.  This arises because of tradition, difficulties which international boundaries and separate national entities introduce into economics, and the analytical tools and theories which have evolved.  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 within such economies are similar as are the tools of analysis.  Thus, international economics is an extension of what you have already learned about economics.

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 domestic 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 real transactions.  However, it will become evident internationally as domestically that money sometimes hinders rather than facilitates transactions; this dimension of international finance is also part of the course.

A related objective is to evaluate in depth the various international monetary systems which have or do exist.  There is a growing concern that flexible exchange rates are not an adequate basis for a stable and efficient international monetary 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 international monetary reform.

Updated : November 4, 1999