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International Money and Finance - 9th Edition - ISBN: 9780128041062, 9780128041079

International Money and Finance

9th Edition

Authors: Michael Melvin Stefan Norrbin
eBook ISBN: 9780128041079
Hardcover ISBN: 9780128041062
Imprint: Academic Press
Published Date: 30th March 2017
Page Count: 344
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International Money and Finance, Ninth Edition presents an institutional and historical overview of international finance and international money, illustrating how key economic concepts can illuminate real world problems.

With three substantially revised chapters, and all chapters updated, it functions as a finance book that includes an international macroeconomics perspective in its final section. It emphasizes the newest trends in research, neatly defining the intersection of macro and finance.

Successfully used worldwide in both finance and economics departments at both undergraduate and graduate levels, the book features current data, revised test banks, and sharp insights about the practical implications of decision-making.

Key Features

  • Includes current events, such as the LIBOR and Greek crises
  • increases emphasis on countries other than the US
  • Minimizes prerequisites to encourage use by students from varied backgrounds


Upper-division undergraduate and graduate level students worldwide working in international finance and economics

Table of Contents

Part I: The International Monetary Environment

Chapter 1. The Foreign Exchange Market

  • Abstract
  • Foreign Exchange Trading Volume
  • Geographic Foreign Exchange Rate Activity
  • Spot Exchange Rates
  • Currency Arbitrage
  • Short-Term Foreign Exchange Rate Movements
  • Long-Term Foreign Exchange Movements
  • Summary
  • Exercises
  • Further Reading
  • Appendix A Trade-Weighted Exchange Rate Indexes
  • Appendix B The Top Foreign Exchange Dealers

Chapter 2. International Monetary Arrangements

  • Abstract
  • The Gold Standard: 1880–1914
  • The Interwar Period: 1918–1939
  • The Bretton Woods Agreement: 1944–1973
  • Central Bank Intervention During Bretton Woods
  • The Breakdown of the Bretton Woods System
  • The Transition Years: 1971–1973
  • International Reserve Currencies
  • Post Bretton Woods: 1973 to the Present
  • The Choice of an Exchange Rate System
  • Currency Boards and “Dollarization”
  • Optimum Currency Areas
  • The European Monetary System and the Euro
  • Summary
  • Exercises
  • Further Reading
  • Appendix A Current Exchange Rate Arrangements

Chapter 3. The Balance of Payments

  • Abstract
  • Current Account
  • Financing the Current Account
  • Additional Summary Measures
  • Transactions Classifications
  • Current Account Disequilibria
  • Balance of Payments Equilibrium and Adjustment
  • The US Foreign Debt
  • How Serious Is the US Foreign Debt?
  • Summary
  • Exercises
  • Further Reading

Part II: International Parity Conditions

Chapter 4. Forward-Looking Market Instruments

  • Abstract
  • Forward Rates
  • Swaps
  • Futures
  • Options
  • Other Forward-Looking Instruments
  • Summary
  • Exercises
  • Further Reading

Chapter 5. Eurocurrency Markets and the LIBOR

  • Abstract
  • Reasons for Offshore Banking
  • Interest Rate Spreads and Risk
  • International Banking Facilities
  • Offshore Banking Practices
  • LIBOR Rigging
  • Summary
  • Exercises
  • Further Reading

Chapter 6. Exchange Rates, Interest Rates, and Interest Parity

  • Abstract
  • Interest Rate Parity
  • Effective Return on a Foreign Investment
  • Deviations From Covered Interest Rate Parity
  • Interest Rates and Inflation
  • Exchange Rates, Interest Rates, and Inflation
  • Expected Exchange Rates and the Term Structure of Interest Rates
  • Summary
  • Exercises
  • Further Reading
  • Appendix A What are Logarithms, and Why are They Used in Financial Research?

Chapter 7. Prices, Exchange Rates, and Purchasing Power Parity

  • Abstract
  • Absolute Purchasing Power Parity
  • The Big Mac Index
  • Relative Purchasing Power Parity
  • Time, Inflation, and PPP
  • Deviations From PPP
  • Overvalued and Undervalued Currencies
  • Real Exchange Rates
  • Summary
  • Exercises
  • Further Reading
  • Appendix A The Effect on PPP by Relative Price Changes

Part III: Risk and International Capital Flows

Chapter 8. Foreign Exchange Risk and Forecasting

  • Abstract
  • Types of Foreign Exchange Risk
  • The Foreign Exchange Risk Premium
  • Market Efficiency
  • Foreign Exchange Forecasting
  • Fundamental Versus Technical Trading Models
  • Summary
  • Exercises
  • Further Reading

Chapter 9. Financial Management of the Multinational Firm

  • Abstract
  • Financial Control
  • Cash Management
  • Letters of Credit
  • An Example of Trade Financing
  • Intrafirm Transfers
  • Capital Budgeting
  • Summary
  • Exercises
  • Further Reading
  • Appendix A Present Value

Chapter 10. International Investment

  • Abstract
  • Portfolio Diversification
  • Reasons for Incomplete Portfolio Diversification
  • International Investment Opportunities
  • The Globalization of Equity Markets
  • Foreign Direct Investment
  • Capital Flight
  • Capital Inflow Issues
  • Summary
  • Exercises
  • Further Reading
  • Appendix A American Depositary Receipts

Chapter 11. International Lending and Crises

  • Abstract
  • International Lending
  • Causes of Financial Crises
  • International Lending and the Great Recession
  • International Lending and the Greek Debt Crisis
  • IMF Conditionality
  • The Role of Corruption
  • Country Risk Analysis
  • Summary
  • Exercises
  • Further Reading

Part IV: Modeling the Exchange Rate and Balance of Payments

Chapter 12. Determinants of the Balance of Trade

  • Abstract
  • Elasticities Approach to the Balance of Trade
  • Elasticities and the J-Curve
  • Currency Contract Period
  • Pass-Through Analysis
  • The Marshall–Lerner Condition
  • The Evidence From Devaluations
  • Absorption Approach to the Balance of Trade
  • Summary
  • Exercises
  • Further Reading

Chapter 13. The IS-LM-BP Approach

  • Abstract
  • The Internal and External Macroeconomic Equilibrium
  • The IS Curve
  • The LM Curve
  • The BP Curve
  • Equilibrium
  • Monetary Policy Under Fixed Exchange Rates
  • Fiscal Policy Under Fixed Exchange Rates
  • Monetary Policy Under Floating Exchange Rates
  • Fiscal Policy Under Floating Exchange Rates
  • Using the IS-LM-BP Approach: The Asian Financial Crisis
  • International Policy Coordination
  • Summary
  • Exercises
  • Further Reading
  • Appendix A The Open Economy Multiplier

Chapter 14. The Monetary Approach

  • Abstract
  • Specie-Flow Mechanism
  • The Monetary Approach
  • The Monetary Approach to the Balance of Payments
  • The Monetary Approach to the Exchange Rate
  • The Monetary Approach for a Managed Floating Exchange Rate
  • Sterilization
  • Sterilized Intervention
  • Summary
  • Exercises
  • Further Reading

Chapter 15. Extensions and Challenges to the Monetary Approach

  • Abstract
  • The Role of News
  • The PB Approach
  • The Trade Balance Approach
  • The Overshooting Approach
  • The Currency Substitution Approach
  • Recent Innovations to Open-Economy Macroeconomics
  • Summary
  • Exercises
  • Further Reading


No. of pages:
© Academic Press 2017
30th March 2017
Academic Press
eBook ISBN:
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About the Authors

Michael Melvin

Michael Melvin is with the Rady School of Management at UCSD where he coordinates and teaches in the Master of Finance program. Prior roles include Managing Director and Head of Currency and Fixed Income Research at BlackRock, Adjunct Professor at the Haas School of Business at UC Berkeley, Co-editor of the Journal of International Money & Finance, and Professor of Economics at Arizona State University.

Affiliations and Expertise

Rady School of Management at UCSD, La Jolla, CA

Stefan Norrbin

Stefan Norrbin is a Professor of Economics. His research interests and fields of specialization are in International Finance and Trade, Applied Macroeconomics, and Applied Econometrics. After earning his Ph.D. from ASU in 1986, Dr. Norrbin joined the University of Alabama at Tuscaloosa as an Assistant Professor of Economics for three years. He left the UA to work with McKinsey & Co. in Stockholm, Sweden, as an Associate/Financial Institutions Specialist. His tasks were to research and advice on mergers and strategic positioning of banks and insurance firms. In 1990 Dr. Norrbin joined the Florida State University as a professor of economics.

Affiliations and Expertise

Florida State University, Tallahassee, FL, USA


"The new edition of this well-known textbook on International Money and Finance has been updated so that it is fully up-to-date. The textbook is a valuable source of information for students with an interest in these subjects." --Charlotte Christiansen, Aarhus Universitet, Denmark

"Connecting (international) macro and finance is the hard task before us. Melvin and Norrbin have risen to the challenge with breadth and detail." --Romar Correa, University of Mumbai, India

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