International Finance
Overview
- Credit value: 30 credits at Level 6
- Convenor: Veronika Akhmadieva
- Prerequisites: Macroeconomics or Macroeconomic Theory and Policy, plus a solid grounding in finance and mathematics to the level of Quantitative Techniques I and Principles of Finance
- Assessment: coursework (20%) and a three-hour examination (80%)
Module description
This module provides you with:
- an overview of foreign exchange rate markets and their effect on the economy
- an introduction to balance of payments accounting, models for exchange rate determination and the relevant parity conditions governing exchange rates and monetary and fiscal policy
- the basics of the role of exchange rates for corporations and investors.
Learning objectives
By the end of the module, you will:
- understand the relationship between balance of payments accounts and national income accounts and understand the mechanics of balance of payments accounting
- understand how the foreign exchange market functions and know common parity conditions in the foreign exchange market, including purchasing power parity, covered interest parity and uncovered interest parity
- be able to analyse the effects of monetary and fiscal policy in an open economy and understand how market participants’ beliefs about future monetary policy affect the current exchange rate
- know the difference between floating and pegged exchange rates and how they affect policy effectiveness
- know what different international monetary arrangements have been in place historically.