Boston College
Rosen Valchev
Department of Economics
Fall 2015
ECON 3372: International Finance
Syllabus
Time: TTh 10:30am
Location: Gasson Hall 310
Professor: Rosen Valchev
Office: 396 Maloney Hall
E-mail: valchev@bc.edu
Office Hours: Tuesday 8-9 or by appointment
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Course Description
In this course we will use analytical open economy models to study international financial
markets, international trade and balance of payments issues. We will cover a variety of theoretical frameworks used to model economies open to trade in goods and assets, and their
various interactions. Topics of particular interests are exchange rate determination, capital
flows, trade flows, and other international linkages between economies. We will also apply
the analytical tools we learn to address the macroeconomic aspects of current policy issues
such as the global impact of the financial crisis, exchange rate policy, currency unions and
the special case of the Euro, sovereign debt crises, and persistent trade deficits and international indebtedness.
Pre-requisites: ECON2202 or ECON2204
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Course Materials
The required textbook for the course is:
Krugman, P, Obstfeld. M and M. Melitz (2014, 10th Edition), International Economics,
Theory and Policy, Pearson Series in Economics, Prentice Hall.
Any extra material will be posted on the course website.
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Course Evaluation
Class Participation:
Homework:
Midterms:
Final:
10%
15% (4 out of top 5 scores)
30% (15% each)
45%
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Exams: There will be two midterms, one on October 1st and one on November 5th . The
midterms are not cumulative, but the final exam is. The date of the final follows the university final exams schedule.
If you happen to miss one of the two midterms, and you have an approved absence as per
your Academic Dean, then the weight of that midterm is added to the second one. If you
happen to miss both, then the all their weight is added to the final. If you miss an exam
without an approved absence then you earn 0% on it. Make-up final exams will only be given
under extraordinary circumstances and on a case-by-case basis. You need to check with me
ahead of time if you would absolutely need to miss the final.
You need to submit any requests for re-grading in writing, and clearly articulate what you
believe is incorrect and why. Requests must be handed in within 1 week of receiving back
your assignment. Re-grading requests may lead to re-grading of the whole assignment, and
thus can lead to both an increase and a decrease in your overall score. In any case, I will
return your re-graded assignment within 1 week of receiving your request.
Homework: You are allowed to work in groups on homework, but you must write-up and
submit your own solutions. Do not copy word for word. Writing your own copy is an important part of preparation for the exams. Homework is due at the beginning of class on the
specified day and no late submissions will be accepted. But I will only count the top 4 scores
(out of 5) hence you have some insurance if you cannot hand in one of the homeworks on time.
Class participation: Your are not expected to speak up every single class, but I would
like everyone to be engaged in discussions at one point or another throughout the semester.
Do the assigned readings, and come to class with any questions you may have. Do not feel
like they have to be particularly sophisticated or technical.
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Students with Disability
If you have a disability and will be requesting accommodations for this course, please register with either Dr. Kathy Duggan (dugganka@bc.edu), Associate Director, Connors Family
Learning Center (learning disabilities or AHD) or Dean Paulette Durrett, (paulette.durrett@bc.edu),
Assistant Dean for students with disabilities, (all other disabilities).
Advance notice and appropriate documentation are required for accommodations.
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Course Outline
I will refer to the textbook as KOM below. You are expected to do the weekly readings
before the start of the Tuesday class each week, unless I indicate otherwise in class.
Week
Week
Week
Week
Week
Week
Week
Week
Week
Week
Week
Week
Week
Week
Week
1 (Sep 1, 3):
2 (Sep 8, 9):
3 (Sep 15, 17):
4 (Sep 22, 24):
5 (Sep 29, Oct 1):
6 (Oct 6, 8):
7 (Oct 13, 15):
8 (Oct 20, 22):
9 (Oct 27, 29):
10 (Nov 3, 5):
11 (Nov 10, 12):
12 (Nov 17, 19):
13 (Nov 24, 26):
14 (Dec 1, 3):
15 (Dec 8):
Introduction / Nat. Income Accounts (KOM Chapter 13)
Exchange Rates (KOM Chapter 14)
UIP (Own material – no required reading this week)
Money, Interest Rates and Exchange Rates (KOM Chapter 15)
Review & MIDTERM
Price Levels and the Exchange Rate in the Long-Run (KOM Chapter 16)
Output and the Exchange Rate in the Short Run (KOM Chapter 17)
Fixed Exchange Rates (KOM Chapter 18)
International Monetary Systems: an historical overview (KOM Chapter 19)
Review & MIDTERM
Financial Globalization (KOM Chapter 20)
Currency Unions, the Euro (KOM Chapter 21)
Developing Countries (KOM Chapter 22) / Thanksgiving
Developing Countries: Growth, Crisis and Reform (KOM Chapter 22)
Review (only one class that week)
Preliminary Schedule of Problem Sets: This might change over the course of the
semester, based on how fast or slow we are progressing. If it does, I will let you know.
Due Date Covers
Problem Set 1: Sep 22
Chapters 13, 14, UIP
Problem Set 2: Oct 20
Chapters 16, 17
Problem Set 3: Oct 27
Chapter 18
Problem Set 4: Nov 17
Chapters 20
Problem Set 5: Dec 1
Chapters 21, 22
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