Principles of International Finance and Open Economy Macroeconomics - 1st Edition - ISBN: 9780128022979, 9780128025383

Principles of International Finance and Open Economy Macroeconomics

1st Edition

Theories, Applications, and Policies

Authors: Cristina Terra
eBook ISBN: 9780128025383
Paperback ISBN: 9780128022979
Imprint: Academic Press
Published Date: 1st June 2015
Page Count: 362
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Description

Principles of International Finance and Open Economy Macroeconomics: Theories, Applications, and Policies presents a macroeconomic framework for understanding and analyzing the global economy from the perspectives of emerging economies and developing countries.

Unlike most macroeconomic textbooks, which typically emphasize issues about developed countries while downplaying issues related to developing countries, this book emphasizes problems in emerging economies, including those in Latin American countries.

It also explains recent developments in international finance that are essential to a thorough understanding of the effects and implications of the recent financial crisis.

Key Features

  • Concentrates on developing country perspectives on International Finance and the Economy, including those in Latin American countries
  • Provides case studies and publicly available data allowing readers to explore theories and their applications
  • Explains recent developments in international finance that are essential to a thorough understanding of the effects and implications of the recent financial crisis
  • Proposes a unified mathematical model accessible to those with basic mathematical skills

Readership

Upper-division undergraduate and graduate level students working in international macroeconomics.

Table of Contents

  • Foreword
  • Preface
    • How to Use This Book
  • Acknowledgments
  • 1. Introduction
    • 1.1 Mathematical Modeling
    • 1.2 Book Structure
  • Part I: Definitions
    • Part I. Definitions
    • 2. How to Measure International Transactions
      • 2.1 Balance of Payments
      • 2.2 National Accounts
      • 2.3 Balance of Payments Equilibrium
      • 2.4 Open Economy Models
      • Mathematical Appendix
      • 2.5 Exercises
    • 3. The Foreign Exchange Market
      • 3.1 The Nominal Exchange Rate
      • 3.2 The Goods and Services Market: The Real Exchange Rate
      • 3.3 The Assets Market: Interest Rate Parity Conditions
      • Mathematical Appendix
      • 3.4 Exercises
  • Part II: Current Account and Real Exchange Rate
    • Part II. Current Account and Real Exchange Rate
    • 4. What Is the Optimum Current-Account Level?
      • 4.1 Basic Hypotheses
      • 4.2 Consumption Smoothing
      • 4.3 Comparing with a Closed Economy
      • 4.4 How Economic Shocks Affect the Current Account
      • 4.5 Adding Government
      • 4.6 The Model with Production and Investment
      • 4.7 The Model and the World
      • 4.8 Exercises
    • 5. The Equilibrium Real Exchange Rate
      • 5.1 The Real Exchange Rate and the Price of Nontradable Goods
      • 5.2 Production, Consumption, and Equilibrium
      • 5.3 How Does the Real Exchange Rate Respond to Shocks?
      • Mathematical Appendix
      • 5.4 Exercises
  • Part III: Determination of the Nominal Exchange Rate
    • Part III. Determination of the Nominal Exchange Rate
      • Why Different Models?
    • 6. Money and Exchange Rate in the Long Run
      • 6.1 Money, Assets, and Goods Markets
      • 6.2 Exchange Rate Fundamentals
      • 6.3 Applications, Extensions, and Limits of the Model
      • Mathematical Appendix
      • 6.4 Exercises
    • 7. Macroeconomic Policies and Exchange Rate in the Short Run
      • 7.1 Rigid Prices: The Mundell–Fleming Model
      • 7.2 Sticky Prices: The Mundell–Fleming–Dornbusch Model
      • 7.3 Monetary Models with Price Rigidity: Their Uses and Limitations
      • 7.4 Exercises
    • 8. Portfolio Diversification and Capital Flows
      • 8.1 Assets from Different Countries: Imperfect Substitutes
      • 8.2 Gross Capital Flows and Current Account
      • 8.3 Net International Investment Position
      • 8.4 Impact of Shocks on Exchange Rate and Current Account
      • Mathematical Appendix
      • 8.5 Exercises
  • Part IV: Crises and Exchange Rate Policy
    • Part IV. Crises and Exchange Rate Policy
    • 9. Currency Crises
      • 9.1 The Speculative Attack as Asset Price Arbitrage
      • 9.2 Crises as Self-Fulfilling Prophecies
      • 9.3 The Role of Banks and Foreign Debt
      • 9.4 Contagion
      • 9.5 Exercises
    • 10. Exchange Rate Regimes
      • 10.1 Classification of Exchange Rate Regimes
      • 10.2 What Exchange Rate Regime Should Be Chosen?
      • Mathematical Appendix
      • 10.3 Exercises
    • 11. Political Economy of Exchange Rate Policy
      • 11.1 Distributive Impacts of the Real Exchange Rate
      • 11.2 Exchange Rate as an Indicator of Competence
      • 11.3 The Economic Policy of Fiscal Policy
      • Mathematical Appendix
      • 11.4 Exercises
  • Part V
    • Annexes
      • I List of Currencies
      • II Data List
      • III List of Mathematical Symbols
    • References
    • Index

Details

No. of pages:
362
Language:
English
Copyright:
© Academic Press 2015
Published:
Imprint:
Academic Press
eBook ISBN:
9780128025383
Paperback ISBN:
9780128022979

About the Author

Cristina Terra

Cristina Terra is professor of economics at ESSEC Business School. PhD in economics from Princeton University, she has taught in France, Brazil, and the United States. She has been Director of École Doctorale Économie Management et Mathématiques de Cergy at Université de Cergy-Pontoise, and Director of Graduate Studies at Fundação Getulio Vargas, Brazil. Her mains research interests are International Economics and Development Economics, with several articles published in international economic journals, such as Journal of International Economics, Journal of Development Economics, The Quarterly Journal of Economics, among others. She is member of the editorial board of Journal of Applied Economics and an associate researcher at THEMA and CEPII.

Affiliations and Expertise

ESSEC Business School and THEMA, France

Reviews

"Cristina Terra’s superb intermediate international macroeconomics  textbook fills an important void by providing analysis that is more mathematically rigorous than standard mass  market texts, yet remains quite accessible to both advanced undergraduates and first year graduate students.  The book is also different in its focus on emerging market policy issues, though the financial crisis has shown that advanced economy practitioners would do well to learn these lessons also.  Another very appealing aspect of the book is that a great deal of the material is encompassed within a unified analytical framework, helping students to see links between issues.  A very useful addition to the market, especially for juniors and seniors that are really too advanced for standard intermediate international macro books."  --Kenneth Rogoff, Harvard University

"The world of international finance has been since 2007 one of the most interesting and complex ever known. Developing countries are emerging, developed economies are facing serious fiscal and demographic challenges, the international monetary system is chaotic, balance of payments imbalances abound, exchange rates fluctuate, and challenges only increase. Cristina Terra's book comes at a good time, putting these issues in order clearly and didactically. Covering basic concepts and relevant models in a clear and in a well-illustrated way, this book will serve as an essential reference for academics and practitioners."  --Arminio Fraga Neto, Gávea Investimentos, Brazil

"An inspiring textbook on international macroeconomics, developed with lucid economic intuition and illustrated with up-to-date issues in global economy." --Ou Hu, Youngstown State University