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International Finance Topics

The document outlines key topics in international finance, including national income accounting, balance of payments, exchange rates, and the foreign exchange market. It covers the relationship between money, interest rates, and exchange rates, as well as long-run and short-run dynamics affecting these variables. Additionally, it discusses fixed exchange rates, central bank interventions, and the implications of monetary policies on the economy.

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EDWIN THUNGARI
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0 views2 pages

International Finance Topics

The document outlines key topics in international finance, including national income accounting, balance of payments, exchange rates, and the foreign exchange market. It covers the relationship between money, interest rates, and exchange rates, as well as long-run and short-run dynamics affecting these variables. Additionally, it discusses fixed exchange rates, central bank interventions, and the implications of monetary policies on the economy.

Uploaded by

EDWIN THUNGARI
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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International Finance Topics

Chapter 2: National Income accounting and the balance of payments


 The National Income accounts
o National product and national income
o Capital depreciation and international transfers
o Gross domestic product
 National income accounting for an Open Economy
 The balance of payments accounts
Chapter 3: Exchange rates and the foreign exchange market: an asset approach
 Exchange rates and international transactions
 The foreign exchange market
 The demand for foreign currency assets
 Equilibrium in the foreign exchange market
 Interest rates, expectations, and equilibrium
Chapter 4: Money, Interest Rates and Exchange Rates
 Money defined: a brief review
 The demand for money by individual
 Aggregate money demand
 The equilibrium interest rate: the interaction of money supply and demand
 The money supply and the exchange rate in the short run
 Money, the price level, and the exchange rate in the long run
 Inflation and exchange rate dynamic
Chapter 5: Price Levels and the Exchange rate in the long run
 The law of one price
 Purchasing power parity
 A long-run exchange rate model based on PPP
 Empirical evidence on PPP and the law of one price
 Explaining the problems with PPP
 Beyond purchasing power parity: a general model of long-run exchange rates
 International interest rate difference
 Real interest parity
Chapter 6: Output and the exchange rate in the short run
 Determinants of aggregate demand in an open economy
 The equation of aggregate demand
 How output is determined in the short run
 Output market equilibrium in the short run: the DD schedule
 Asset market equilibrium in the short run: the AA schedule
 Short-run equilibrium for an open economy: putting the DD and AA schedules
together
 Temporary changes in monetary and fiscal policy
 Inflation bias and other problems of policy formulation
 Permanent shifts in monetary and fiscal policy
 Macroeconomic policies and the current account
Chapter 7: Fixed exchange rates and foreign exchange intervention
 Why study fixed exchange rates?
 Central bank intervention and the money supply
 How the central bank fixes the exchange rate
 Stabilization policies with a fixed exchange rate
 Balance of payments crises and capital flight
 Managed floating and sterilized intervention
 Reserve currencies in the world monetary system
 The gold standard

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