NUS Business School
National University of Singapore
BMA5122
Macroeconomics and Finance: Perspectives from Asia
Semester 1, AY2014/2015
Instructor: Prof. Kim Sun Bae (BIZ1 #6-7, bizsbk@nus.edu.sg)
Teaching Assistant: Yang Guangpu (guangpuyang@nus.edu.sg)
Course Objective
This module explores the link between macroeconomics, financial markets and policy in Asia, from a
structural as well as cyclical perspective. Students taking this module should have three goals in mind:
1.
2.
3.
Gain a broader historical and comparative perspective on Asia’s economic development and
macroeconomic policy framework
Deepen understanding of applied macro and international economics theory through case
studies focused on Asia
Develop an appreciation of the interplay between financial markets and macro/financial
policy
The course draws on and extends many analytical tools of macro and international economics
covered in BMA5011, which is a pre-requisite. Topics covered include: capital flows in Asia and policy
challenges, real exchange rate adjustment in Asia and macroeconomic imbalances, regional economic
integration and implications for business cycles and asset price, and the legacy of Asian financial crisis
and the future of Asian exchange rate regime.
Office Hours


Mondays and Thursdays, 3-5pm, or by appointment
In either case, please give me a heads up by e-mail at least a day in advance
Assessment method
 In-class exams (40%)
 Group case study (35%)
 Class participation (25%)
Required textbooks
 Krugman, Paul, Maurice Obstfeld and Andrew Melitz, International Economics
 Mishkin, Frederick, Economics of Money, Banking and Financial Markets (Global Edition, 9/e)
Other reading
A significant part of the materials covered in this course is not covered in textbooks. I have therefore
compiled a set of reading materials culled from a wide range of sources, including:
 Financial press
 Economics and finance blogs
 Investment bank and fund management research
 Academic journals
 Central bank research
 International organizations (e.g. IMF, BIS, ADB)
Students are encouraged to read the assignment materials (as well as the lecture notes) before each
lecture.
Course Outline & Lecture Schedule
Week 1 (Aug. 11)
1. Course Introduction
2. Equilibrium real interest rate & Secular Stagnation
3. Business Cycles, Financial Markets & Policy (Expectations & Asset Price)
Week 2 (Aug. 18)
4. Business Cycles, Financial Markets & Policy (Financial Markets & Policy)
5. Case Study: Fed's exit from QE
Week 3 (Aug 25)
6. Globalization of Financial Markets
7. Capital Flows in Asia
Week 4 (Sep. 1)
8. Capital flows in China and policy challenges
9. Balance of payments and Foreign Exchange Crises
Week 5 (Sep. 8)
10. FX Market: Background & Basics
11. Managing FX Risk: Theory & Practice
Week 6 (Sep. 15): Mid-Term Exam
Reading Week (Sep. 22-26)
Week 7 (Sep. 29)
12. Real Exchange Rate: Equilibrium, Misalignment & Adjustment
13. Real Exchange Rate Adjustment in Asia
Week 8 (Oct. 6)
14. Case Study: China Rebalancing
15. Case Study: India’s Malaise
Week 9 (Oct. 13)
16. International Policy Spillovers & Coordination: Theory
17. Policy Spillover & Coordination in Asia: Practice
Week 10 (Oct. 20)
18. Regional Economic Integration: Implications for Business Cycle Dynamics in Asia & Financial
Markets
19. Evolution & the Future of Asia's FX regime
20. Bubbles & Financial Crisis
Week 11 (Oct. 27)
1. Macroeconomics & Finance: Mainstream vs. “Heterodox” Approaches
2. Financial Structure, Financial Deregulation and Economic Growth in Asia
Week 12 (Nov. 3)
3.
4.
Student case study
Student case study
Week 13 (Nov. 10)
5. Student case study
6. Student case study
Week 14: In-Class Final exam (Nov. 17)