Econ 842 - Spring 2020
Syllabus
- Course Description and Outline
Problem Sets
Problem Set 1 -- Due February
5
Problem Set 2 -- Due March
18
Possible Paper Topics
Online Lectures
Lecture on "Why Doesn't Capital
Flow From Rich to Poor Countries?"
Lecture on "Capital Flows to
Developing Countries: The Allocation Puzzle"
Lecture on "Growing Like China"
Lecture on First-Generation Currency Crisis Models
Lecture on Second-Generation Currency Crisis
Models
Lecture Notes
Lecture Slides 1
Two Period Model - Part1
(Endowment Economy)
Two Period Model - Part 2
(Comparative Statics) Slides
for 2-Country Model
Two Period Model - Part 3
(Production and Investment)
Lecture Slides 2
Slides on Valuation Effects
(Gourinchas&Rey) and Investment Risk (Ventura)
Lecture Slides 3
Lecture Slides 4
Lecture Slides 5
Lecture Slides 6
Lecture Slides 7 (Part A)
Lecture Slides 7 (Part B)
Lecture Slides 7 (Part C)
Lecture Slides on Risk Sharing
with Lack of Commitment
Lecture Slides on International Business
Cycles with Complete Markets
Lecture Slides on International
Business Cycles with Exogenous Incomplete Markets
Lecture Slides on International
Business Cycles with Endogenous Incomplete Markets
Lecture Slides on First Generation
Currency Crisis Models
Lecture Slides on Second Generation
Currency Crisis Models
Lecture Slides on the Backus-Smith
Puzzle
Lecture Slides on Morris and
Shin
Lecture Slides on Angeletos and
Werning
Lecture Slides on Bai and Zhang
Lecture Slides on Van
Nieuwerburgh and Veldkamp
Lecture Slides on "Why Doesn't Capital
Flow From Rich to Poor Countries?"
Lecture Slides on "Capital Flows
to Developing Countries: The Allocation Puzzle"
Lecture Slides on "Growing
Like China"
Notes on Risk Sharing and International
Portfolio Diversification
Notes on Home Bias
Notes on Open-Economy DSGE Models
Additional Textbook Material
"Lectures in Open
Economy Macroeconomics" by M. Uribe
--- A graduate level text. Chapters 2-4 are useful
background.
"International Macroeconomics"
by M. Uribe and S. Schmitt-Grohe
--- An undergraduate text. A useful reference. A lot of the
same topics, but using simple graphs and 2-period models.
Some Background
Reading
The Economist (5-14-09) --
"Birth Pains"
The Economist (1-22-11)
-- "The Rise of the Redback/Stranger
than Fiction"
The Economist (2-23-11)
-- "Learning to Like Inflation"
Feldstein (1-28-11) -- "The End of China's Surplus"
The Economist (9-25-10)
-- "A Mao in Every Pocket"
The Economist (11-6-10)
-- "Beyond Bretton Woods 2"
Krugman (2011) -- "Can Europe Be Saved?"
Bernanke (2009) -- "Asia
and the Global Financial Crisis"
Obstfeld and Rogoff (2009) -- "Global Imbalances and the Financial Crisis"
Old Problem Sets
and Exams
Problem Set 1 (due February 1)
Problem Set 2 (due March
22)
Problem
Set 1 (due February 20)
Problem Set 2 (due April
11)
Final Exam (Spring 2009)
Final Exam (Spring 2011)
Midterm Exam and Solutions
(Spring 2011)
Midterm Exam (Spring
2016)
Midterm Exam (Spring
2017)
Midterm Exam (Spring 2018)
Midterm Exam (Spring 2019)
Final Exam (Spring 2014)
Final Exam (Spring 2016)
Final Exam (Spring 2017)
Data Sets
Exchange Rate and Current Account data for USA,
UK, Canada, and Japan (quarterly, 1965-2007).
(Warning: It looks like the the national accounts data are
annualized, but not the current accounts).
Updated data set (quarterly, 1965-2009)
(Warning: Look for coding errors and unit inconsistencies! The
online IFS database appears to be a mess.)
Papers
Old Term Papers
Callum McLeod (2009), "International
Business Cycles"
Adam Tubridy (2009), "Public
Information in a Global Game"
Min Xu (2009), "The Exchange
Rate in China"
Ryan Perrin (2017), "High-Frequency Trading in the
Foreign Exchange Market: New Evil or Technological Progress?"
Current Accounts
Ventura (2002), "Towards a Theory
of Current Accounts"
Ghosh (1995), "Capital Mobility Amongst
the Major Industrialized Countries: Too Little or Too Much?",
Economic Journal
Glick & Rogoff (1995), "Global
vs. Country-Specific Productivity Shocks and the Current Account", Journal of Monetary Economics
Engel & Rogers (2006), "The
U.S. Current Account Deficit and the Expected Share of World Output",
Journal of Monetary Economics
Gourinchas & Rey (2007), "International Financial Adjustment",
Journal of Political Economy
Caballero et. al. (2008), "An
Equilibrium Model of Global Imbalances and Low Interest Rates",
American Economic Review
Mendoza et. al. (2009), "Financial Integration, Financial Development,
and Global Imbalances", Journal
of Political Economy
"When a Flow Becomes a Flood",
from The Economist January,
24, 2009
Exchange Rates
Rogoff (1996), "The Purchasing Power
Parity Puzzle", Journal of
Economic Literature
Engel (1999), "Accounting for U.S. Real Exchange Rate Changes",
Journal of Political Economy
Canzoneri et. al. (1999), "Relative
Labor Productivity and the Real Exchange Rate in the Long Run: Evidence
for a Panel of OECD Countries", JIE
Kocherlakota & Pistaferri (2007), "Household Heterogeneity and Real Exchange Rates",
Economic Journal
Engel (2006), "Exchange Rate Models",
NBER Reporter
Engel & West (2005), "Exchange Rates
and Fundamentals", Journal
of Political Economy
Engel & West (2004), "Accounting
for Exchange Rate Variability in Present Value Models when the Discount
Factor is Near 1", American
Econ. Review
Meese (1990), "Currency Fluctuations
in the Post-Bretton Woods Era", Journal of Economic Perspectives
Mark & Sul (2001), "Nominal Exchange Rates and Monetary
Fundamentals: Evidence from a Small Post-Bretton Woods Sample",
J. of Intl. Economics
Bacchetta & van Wincoop (2006), "Can Information Heterogeneity Explain the Exchange
Rate Determination Puzzle?", Amercan Economic Review
Engel (1996), "The Forward Discount
Anomaly and the Risk Premium: A Survey", Journal of Empirical Finance
Burnside et. al. (2006), "The Returns to Currency Speculation",
NBER working paper.
Chakraborty & Evans (2008), "Can Perpetual Learning Explain the Forward
Premium Puzzle?", Journal of
Monetary Economics
Kim (2009), "Exchange Rates and
Fundamentals Under Adaptive Learning", Journal of Economic Dynamics and Control
"Burger-Thy-Neighbor Policies",
from The Economist February
9, 2009
Risk Sharing and Home
Bias
Obstfeld & Rogoff (2000), "The
Six Major Puzzles in International Macroeconomics: Is There a Common Cause?",
NBER Macro Annual
Lewis (1999), "Trying to Explain Home
Bias in Equities and Consumption", Journal of Economic Literature
Cole & Obstfeld (1991), "Commodity
Trade and Risk-Sharing: How Much do Financial Markets Matter?",
J. of Monetary Economics
Lucas (1990), "Why Doesn't Capital Flow From
Rich to Poor Countries?", American Economic Review
Gourinchas & Jeanne (2006), "The Elusive Gains from International Financial
Integration", Review of Economic
Studies
Gourinchas &
Jeanne (2012), "Capital Flows
to Developing Countries: The Allocation Puzzle", Review of Economic Studies
Song, Storesletten, % Zilibotti (2011), "Growing Like China", American Economic Review
Heathcote & Perri (2008), "The International Diversification Puzzle
Is Not As Bad As You Think", working paper
Obstfeld (1994), "Risk-Taking, Global
Diversification and Growth", American Economic Review
Van Nieuwerburgh & Veldkamp (2009), "Information Immobility and the Home Bias Puzzle",
Journal of Finance
Business Cycles
Backus, Kehoe & Kydland (1992), "International
Real Business Cycles", Journal
of Political Economy
Backus & Smith (1993), "Consumption
and Real Exchange Rates in Dynamic Economies with Nontraded Goods",
Journal of International Economics
Baxter & Crucini (1995), "Business Cycles and the Asset Structure of
Foreign Trade", International
Economic Review
Kehoe & Perri (2002), "International
Business Cycles with Endogenous Incomplete Markets", Econometrica
Bai & Zhang (2010), "Solving
the Feldstein-Horioka Puzzle with Financial Frictions", Econometrica
Obstfeld & Rogoff (2000), "New Directions for Stochastic
Open-Economy Models", Journal
of International Economics
Lane (2001), "The
New Open Economy Macroeconomics: A Survey", Journal of International Economics
Chari et. al (2002), "Can Sticky Price Models Generate
Volatile and Persistent Real Exchange Rates?", Review of Economic Studies
Bergin (2006), "How Well Can the New Open
Economy Macroeconomics Explain the Exchange Rate and Current Account?",
J. Intl. Money and Finance
Currency Crises
Obstfeld (1996), "Models of Currency
Crises with Self-Fulfilling Features", European Economic Review
Morris & Shin (1998), "Unique
Equilibrium in a Model of Self-Fulfilling Attacks", American Economic Review
Angeletos & Werning (2006), "Crises and Prices: Information Aggregation,
Multiplicty, and Volatility", American Economic Review