Instructor: Noel Brodsky

Office: 2831 (215D) Coleman Hall

Phone: 581-6334

Hours: 1:00pm-2:00pm MWF or by Appointment

Grade Determination: Undergrads

1 Final Exam (cumulative) 100 points

Undergraduates: 1 Term Paper, 7-10 pages, 100 points with ex-ante weight choice 40-60% (default 50%)


Graduates: 1 Term Paper, 12-15 pages, 100 points (50% of grade from paper, 50% from final)

1 Final Exam (cumulative) 100 points

Expected Grade Distribution and Curve Structure: Curve Structure: Average exam score will be set at or near a baseline "B", whenever necessary. Each exam has its own curve, absolutely determined one week after the exam is returned. The Cutoffs are as follows: 88% = A, 77% = B, 66% = C, 55% = D, below 55% is an F

If you have a documented disability, and wish to discuss academic accommodations, please contact me as soon as possible.

Reading Assignments: Rivera-Batiz, Francisco and Luis A. Rivera-Batiz., International Finance and Open-Economy Macroeconomics, 2th ed., MacMillan, New York, 1994

Course Structure:


Topic I. International Finance

A. Introduction

B. The Foreign Exchange Market (Chapter 1)

1.Spot Markets in Foreign Exchange

2.Forward and Futures Markets in Foreign Exchange

C. Central Banks, Exchange Regimes, and the International Monetary System (chapter 2)

1. The Flow approach to Exchange Rate Determination

2. The Flow approach to the Balance of Payments

D. International Money and Capital Markets (Chapter 4)

1. Covered Interest Parity

E. Exchange Rate Risk and Uncovered International Investments (Chapter 5)

1. Uncovered Interest Parity

F. Asset Markets, the Balance of Payments, and the Exchange Rate(Chapter 19)

1. The Monetary Approach to the Exchange Rate

G. The Monetary and Asset Market approach to the Balance of Payments(Chapter 20)

1. The Monetary Approach to the Balance of Payments

II. Open Economy Macroeconomics

A. A Broad Picture of the Open Economy: International Transactions and the Balance of Payments Accounts (Chapter 9)

1. Closed Economy Systems

B. National Income Accounting and the Open Economy (Chapter 11)

C. The Determination of Output, Exchange Rates, and the Trade Balance (Chapter 13)

D. Balance of Payments Adjustments and the Macroeconomics of Fixed Exchange Rate Regimes (Chapter 14)

E. Expectations, Exchange Rate Dynamics, and Economic Policy (Chapter 15)

F. Production, Prices, and Unemployment in the Open Economy (Chapter 16)

G. Prices, Output, and Economic Adjustment Under Flexible Exchange Rates (Chapter 17)

ECN 4861 Class notes can be seen here as a Word 97 Document ECN 4861 Word Document (Fall 2001) Class notes. There is also an Excel 97 spreadsheet: ECN 4861 Excel Spreadsheet (Fall 2001) Covered Interest Differential Excel Spreadsheet. Touch either of the blue (or red) underlined links.