International Macroeconomics

The second part of the class will be given by Nicolas Coeurdacier (see his part of the syllabus on his website here)
This syllabus is for the first 6 weeks

IMPORTANT: this syllabus is preliminary; the website will be updated regularly

TEXTBOOK: There will be no single set text, but there will be frequent citations from the following textbook:
M. Obstfeld and K. Rogoff, Foundations of International Macroeconomics (MIT Press, 1996)
(abbreviated OR in list of readings)

- Mid term assignment (1) given in lecture 4, handed back at lecture 6
- Mid term assignment (2) given in lecture 8, handed back at lecture 10
- final exam

Notes on Dixit-Stiglitz

Solution to mid-term assignment


Lecture 1  Real exchange rates and purchasing power parity

Slides 1; Slides 2

Lectures 2 and 3 International prices and exchange rates: empirics and theory

slides 1

Slides 2 (Atkeson and Burstein)

Lectures 4-5-6. The international transmission mechanism: New Open Economy Macroeconomics and review of overshooting Dornbush model

slides 1

Slides 2

Slides 3

  • OR, Ch. 10
  • Dornbusch, Rudiger, 1976, "Expectations and Exchange Rate Dynamics," Journal of Political Economy, Vol. 84, pp. 1161-76.
  • G. Corsetti and P. Pesenti, 2001, ‘Welfare and Macroeconomic Interdependence’, Quarterly Journal of Economics. 116
  • G. Corsetti and P. Pesenti, CEPR DP 5080, 2005, ‘The simple geometry of transmission and stabilization in closed and open economy’ Giancarlo Corsetti, Luca Dedola, Sylvain Leduc, Optimal monetary policy in open economies , Handbook of Monetary Economics, vol. III,
  • Emmanuel Farhi and IvánWerning, Fiscal Unions, mimeo Harvard University
  • -----------------------------------------, Dealing with the Trilemma: Optimal Capital Controls with Fixed Exchange Rates
  • -----------------------------------------, Dilemma not Trilemma? Capital Controls and Exchange Rates with Volatile Capital Flows
  • Jordi Gali and Tommaso Monacelli, 2005, Monetary Policy and Exchange Rate Volatility in a Small Open Economy, Review of Economic Studies (2005) 72, 707–
  • Lane, Philip, "The New Open Economy Macroeconomics: A Survey," Journal of International Economics 54 (August 2001): 235-66.