Econ 476 – Till Schreiber – Fall 2011 International Finance/Open ...

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Oct 28, 2013 (3 years and 9 months ago)

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Econ
476


Till Schreiber


Fall 2011


International Finance/Open Economy Macro

Description

This course will provide a discussion of international topics of macroeconomic interest. It
includes topics such as the balance of payments, interest parity,
determination of output and
interest rates in the open economy, purchasing power parity, systems of exchange rates, financial
crises, and the global financial "architecture". Relevant articles from scientific journals beyond
textbook readings will be inclu
ded.

The course is basically divided into two parts.

The first is
primarily model
-
oriented, the second empirical.

The pace is going to be fast, I will assume that
you remember some of the international material from Econ 304 (prereq for this course).

I exp
ect
that you spend on average about 2 hours outside of class studying
the

material and doing
assignments for each hour of lecture time. Thus, with 3 hours of lectures a week, this means an
additional 6 hours a week outside of class work. This time allotmen
t assumes that you still
remember most of the material covered in Econ 304 and have kept pace with current events in
the world economy. Otherwise your time
commitment

may be larger.



Required Materials

Textbook: Krugman, Obstfeld: International Econom
ics, 7
th
,

8
th
, or 9
th

edition

(the latest edition
has an additional co
-
author; Marc Melitz)
. You can probably buy used copies of either edition
cheaply online, that's fine. You do NOT need any additional material such as study guides,
online package, CD/DV
D or whatever else may come with the book. You absolutely need the
book.

Also required is the following book:

Rajan, Raghuram (2010). Fault Lines: How Hidden Fractures Still Threaten the World Economy.
Princeton: Princeton University Press.

It sells new on Amazon for about $20, used for about
$10.

Additional required articles will be made available on Blackboard.

Grading

Two midterm exams (25% and 30%), Final (30%), and 5 short written summary assignments
(best 4
-

15%). In addition you can

earn small extra credit by correctly answering short pop
-
up
questions in class.


I will curve each exam to a class median of B (score in the mid 80s), but only to a maximum of
10 points.
I will never curve down.
Since starting to teach the course
at Willi
am & Mary
in the
fall of 2006 the
needed curve adjustment has become larger and larger. During my first years the
curve adjustment was in the range of 5 or 6 points
. It

has increased
since

and topped out at 17
last semester (Spring 2011)
, the difficulty of

the material remained unchanged, at least in my
view
. This is unacceptable. It means that many students can
get by

without a solid grasp of the
material
.
In response,

I will limit the curve adjustment to a maximum of 10 points for each exam.
Thus if the course median score is 70 on an exam, I will only add 10 points to each student’s
score compared to 15 in the past. This would then lead to a lower grade average compar
ed to
past semesters. I hope that this policy will lead to an increased commitment to mastering the
material. You may use a hand
-
written, double
-
sided 8.5x11’’ sheet of notes on all exams. I will,
as in the past, post all my old exams with solutions.


The
written summary assignments work as follows:

I will assign an article for you to read and
will ask you to summarize its main points and line of argument.

Each of these summaries must
not exceed 2 pages.

These assignments have a specified due date and time,

if turned in later than
the specified time on the due date you will receive a loss of 1 point (out of 10 maximum).

Each
additional day late results in a further reduction of 1 point.




A detailed and updated list of all class meetings and readings is ava
ilable on Blackboard, I will
post each upcoming written summary assignment at least one week before it is due.

All exams are non
-
cumulative, meaning I won’t explicitly go back to the material covered in
chapter 12 for the final. Of course, you will still n
eed to know the earlier material as later
chapters build on earlier concepts. I will offer the chance to take a cumulative final which covers,
in addition to the new part, some questions going back to the material from the midterms (one or
both, your choi
ce).
Example:
Say you do poorly on midterm 2. Normally that score would count
for 30% of your grade. If you decide to take the final which includes questions on midterm 2
material the score you earn on those questions will then count for 15% of your course

grade,
your original midterm 2 score will only count for 15% of the course grade. Note that this might
mean that you do even worse the second time around. It is your decision whether to take the
opportunity of the cumulative part

for either or both midter
ms
.
If you’d like to do so, you need to
email me about it at the latest the day before the final exam.

In general there will be no make
-
up exams. If you miss an exam for a valid and documented
excuse (athletic events, DOCUMENTED medical emergency, dean of
students excuse, interview
etc.) I will waive the exam from your course grade and increase the share of the other exams.
Note that this might be risky as then a lot of your grade will depend on the final.

If you miss an
exam without a valid excuse you will

receive a score of 0.

Unfortunately, in previous semesters one or more students in the course attempted to cheat
during exams by hiding solutions to old exams in the bathroom.

Thus, I will
in general
not allow
students to leave the classroom during an exa
m or quiz.

I plan to proctor all exams to answer any
student questions.
All exams are designed for 80 minutes.

If you can come up with a better
solution that ensures that students cannot cheat in this manner, please let me know.

This is the grade distribut
ion of the last two semesters I taught Econ 476 (Fall 2010, Spring 2011
combined
, 72 students
).


22

A

24

B

14

C

6

D

4

F

2

W

You can expect a failing grade if your performance deserves it. Don’t fail Econ 476 in your
senior year
, you don’t have to
.

Office Hours

Before class Tuesday, Thursdays 12:30


1:50, Morton 112, and by appointment.

Schedule of Class meetings

I will post updates to this schedule with additional readings etc. on Blackboard. The exam dates
and assignment dates are fixed.

Chapters

refer to the older 7
th

and 8
th

editions. For the new 9
th

edition add one. So in the 9
th

edition chapter 12 becomes chapter 13.

August




8/25

(Thu): Introduction
; Start ch. 12; IMF (2011
a
, pp. xv
ii/xviii

and 1
-
2
8
) and IMF
(2011b)
.



8/30

(Tue): Ch. 12

September



9/1

(Thu): Poole (2005), ch. 13



9/6

(Tue): ch. 13, ch. 14



9/8

(Thu): ch. 14,
Blanchard and Milesi
-
Ferretti (2009) First Summary Assignment due



9/13

(Tue): ch. 14



9/15

(Thu): Svensson (2007), ch. 14



9/20

(Tue): Midterm 1 prep



9/22

(Thu):
Midterm 1



9/27

(Tue): ch. 15



9/29

(Thu): ch. 15

October



10/4

(Tue): ch. 16,
Taylor and Taylor (2004) Second Summary Assignment due



10/6

(Thu): ch. 16



10/11

(Tue): no class (Fall break)



10/13

(Thu): ch. 17



10/18

(Tue): ch. 17,
Third Summary Assignment due



10/20

(Thu): ch. 19, Obstfeld (1996)



10/25

(Tue): ch. 19, Roubini and Setser (2004)



10/27

(Thu): Midterm 2 prep

November



11/1

(Tue):
Midterm 2



11/3

(Thu): ch. 20



11/8

(Tue): ch. 20,
Fourth Summary Assignment



11/10

(Thu): Eurozone in crisis



11/15

(Tue): ch.

21, Radio shows



11/17

(Thu): ch. 21,
Brunnermeier (2009) Fifth Summary Assignment



11/22

(Tue): ch. 21, Regulation Blinder (2009)



11/29

(Tue): Rajan (2010), some current events

December



12/
1

(Thu): continue from Tuesday



12/14

(
WED
):
Final Exam according t
o exam schedule
, second period (2
-
5pm)
, very last
possible exam. Note that the rules of the College mean that I CANNOT move the final
exam.