PI-120 Lecture Dates, Topics and Tentative Problem-Set Due Dates
(Lecture titles contain links to corresponding in-class slides;
note that updates may be posted up until the actual date of the class.)
I. DEVALUATION AND THE TRADE
BALANCE
1. (9/7) Course Introduction & Derivation of Marshall-Lerner condition; J-curve
II. THE
MUNDELL-FLEMING MODEL
2. (9/10) Keynesian
trade balance; TB Empirically; Intro to the Mundell-Fleming model
3. (9/12) Monetary and fiscal policy with a fixed exchange rate; Reserve flows
4. (9/17) The model with a floating rate, perfect capital mobility
III. MONEY AND INFLATION
5. (9/19) Aggregate Supply, money growth and inflation
6. (9/24) Monetary policy: Dynamic inconsistency and rules \
8. (10/1) Does PPP hold empirically? Patterns of PPP deviations. How long do they last?
9. (10/3) Why does PPP fail? Sticky prices; Tariffs & transp.costs; Non-traded
goods
V. SMALL OPEN ECONOMIES
10. (10/5) Devaluation in small countries
11. (10/15) The Salter-Swan ("Nontraded Goods") Model
12. (10/17) Dutch Disease
VI. EXCHANGE RATE REGIMES
(Slides for Lecture 13&14 are all in the same single file; link from either lecture title above)
13. (10/22) Classification; Pros and cons of fixed vs. floating rates
14. (10/24) Optimum
Currency Areas & Currency Unions
VII. INTEGRATION OF FINANCIAL MARKETS
(Slides for Lectures 16 & 17 are all in the same single file; link from either lecture title below)
16. (10/31) The theory of gains from intertemporal trade;
17. (11/5) Interest Rate Parity (covered, uncovered, real)
(Slides for Lectures 18 & 19 are in the same single file; link from either lecture title below)
18. (11/7) Flexible-price
models; Bubbles
[ Veterans Day holiday]
19. (11/14) Sticky-price models and overshooting
IX. CRISES IN EMERGING MARKETS
20. (11/19) Speculative attack models
21. (11/26) Warning indicators; Sudden Stops; Contagion;
IMF; Contractionary devaluation
(Slides for Lecture 21 are contained in
2 separate large files.) LINKS HERE: L21a, L21b
X. THE CARRY TRADE, RISK, AND PORTFOLIO DIVERSIFICATION
23. (12/3) Optimal portfolio diversification
24 (12/5) Sovereign risk and Appendix on fiscal procyclicality