The following topics shall be discussed: - the efficient markets approach; - the monetary approach to the Balance of Payments and the portfolio balance approach; - the exchange rate regimes and the "fear of floating" debate; - the Balassa-Samuelson effect and the persistence of the deviations from the PPP; - the recent (excess) foreign exchange reserve policy of central banks; the theory of rational speculative bubbles; - the recent financial crises and the literature on contagion.
- Giulio Cifarelli: Corso di Economia Internazionale Finanziaria. Parte I°. Analisi del Tasso di Cambio Nominale, Firenze, 2004.
- Mark .P. Taylor: Exchange-Rate Behavior under Alternative Exchange-Rate Arrangements, in Understanding Interdependence,
The Macroeconomics of the Open Economy, P.B. Kenen (ed.), Princeton University Press, Princeton, 1995, pp. 34-83.
- Giulio Cifarelli and Giovanna Paladino (2006): The International Reserves Glut: Is It for Real?, Studi e Discussioni n. 142, Dipartimento di Scienze Economiche, Università di Firenze (available on the Social Science Research Network).
- Stephan Reitz and Franz Westerhoff (2007): Commodity Price Cycles and Heterogeneous Speculators: A STAR GARCH Model, Empirical Economics, 33, 231-244.
Additional readings
Barry Eichengreen: Capital Flows and Crises, The MIT Press, Cambridge, Mass. 2004, chapters 6-7-8-9.
Prerequisites
A preliminary knowledge of Macroeconomis and of Econometrics is strongly recommended.