Lecture Slides for ITF-220/ECON-1531
Spring 20
12
The required textbook reading is the second half of World Trade and Payments, R.Caves, J.Frankel, and R.Jones, 10th ed. (Addison-Wesley), 2007.  (Available from The COOP, or on reserve at the KSG library.) 

Please notify Minoo Ghoreishi, Asst. to Prof. Frankel, of any problems with these links. (minoo_ghoreishi@harvard.edu)

Topic   Chapter in World Trade & Payments  Lecture
number
Lecture Date   (approx.)
ELASTICITIES & THE TRADE BALANCE

Balance of payments accounting

15  1 Jan. 23

Supply and demand for foreign exchange

16.1  2 Jan. 25

Export and import elasticitiesEmpirical effects of devaluation on the trade balance

16.2   3  Jan. 30  

CLICK HERE FOR L1-L3 SLIDES (combined file) 

THE KEYNESIAN MODEL

National saving identity; fiscal multiplier in an open economy.

17.1- 17.2 4 Feb. 1

Export multiplier; & the transfer problem.

17.3-17.4 5 Feb. 6

Large-country repercussions;
& Transmission of disturbances.

17.5-17.6
18.1
6 Feb. 8

Expenditure-reducing policies vs.-switching policies 

18.2 7 Feb. 13

Monetary factors

18.3 8 Feb. 15

CLICK HERE FOR L7 and L8 SLIDES (combined file) 

Topic   Chapter in World Trade & Payments  Lecture
number
Lecture Date   (approx.)
MONETARY APPROACH TO THE BALANCE OF PAYMENTS

Reserve flows & the gold standard              

19.1 & Appendix A 9 Feb. 22

Purchasing Power Parity

19.2-19.4 10 Feb. 27
GLOBALIZATION OF FINANCIAL MARKETS

Liberalization; spot & forward exchange market

21.1-21.3 11 Feb. 29

 Emerging Markets; Pros and Cons of financial opening

21.4 & 28.1
Ch. 21 Appendix  
12 March 5
FISCAL AND MONETARY POLICY UNDER INTERNATIONAL CAPITAL MOBILITY

Mundell-Fleming -- with exchange rate fixed

22.1-22.3 13 March 7

Applications/problems of policymaking

22.4-22.7; 24.1 15 March 19

MIDTERM EXAM, Wednesday, March 21

  March 21
Topic   Chapter in World Trade & Payments  Lecture
number
Lecture Date   (approx.)

Mundell-Fleming model - with the exchange rate floating

23.1-23.2 16 March 26

Perfect capital mobility & ImpossibleTrinity 

23.3-23.4 17 March 28

Crises in emerging markets

24.2-24.5, 24.7-24.9 18 April 2
INTERDEPENDENCE AND COORDINATION

Effects of fiscal expansion in a large country  
Estimates of transmission
International policy coordination

25.1
25.2
25.3
19 April 7
SUPPLY AND INFLATION

Aggregate Supply and wages

26.1 20 April 9

Inflation and anchors for money
Exchange rate regimes and OCAs

26.3-26.4
26.5-26.6
21 April 11
EXPECTATIONS AND THE DETERMINATION OF THE EXCHANGE RATE

Interest parity conditions & the monetarist/Lucas model

27.1-27.2; 27.3 22 April 16

The overshooting model;  forecasting

27.4-27.5; 27.6 23 April 18


Portfolio risk: foreign exchange risk and diversification

28.1-28.2 24 April 23

Portolio risk:  sovereign default

28.3 25 April 25

Final Exam   Thursday, May 3, 2012   2:00 - 5:00 p.m.