Unit information: Open-Economy Macroeconomics in 2022/23

Unit name	Open-Economy Macroeconomics
Unit code	ECON30010
Credit points	20
Level of study	H/6
Teaching block(s)	Teaching Block 1 (weeks 1 - 12)
Unit director	Dr. Correia
Open unit status	Not open
Units you must take before you take this one (pre-requisite units)	EFIM20033 Intermediate Microeconomics AND EFIM20034 Intermediate Macroeconomics AND EFIM20011 Econometrics 1 OR EFIM20038 Microeconomic Analysis AND EFIM20037 Macroeconomic Analysis AND EFIM20010 Applied Quantitative Research Methods OR EFIM20038 Microeconomic Analysis AND EFIM20037 Macroeconomic Analysis AND EFIM20041 Quantitative Methods for Finance 1
Units you must take alongside this one (co-requisite units)	None
Units you may not take alongside this one	None
School/department	School of Economics
Faculty	Faculty of Social Sciences and Law

Unit Information

Why is this unit important?

The world economy is ever more globalized. When the US Federal Reserve changes their key rate in a way that was not anticipated by the markets, the value of the dollar rises or falls, and this has macroeconomic repercussions in the US economy as well as all around the world. Whenever domestic instability in an emerging economy convinces investors to move their capital abroad, this can be the prelude to a triple currency-, banking- and sovereign-debt-crisis. Having a national currency (e.g., the £) is considered essential by many sovereign states. But there are countries (e.g., the Eurozone members) that have opted to share a single currency. And there are others (e.g., Ecuador) that have foregone their own currency altogether and use a stable international currency such as the US dollar as the legal tender.

This unit gives you the background to understand these events and decisions by exploring the macroeconomic theory and policy issues that arise when openness takes central stage.

How does this unit fit into your programme of study?

This unit builds on the macroeconomics students learned in years 1 and 2, in the sense that students will be familiar with a focus on frameworks that

1. explain broad aggregates such as national income, the interest rate and inflation (or the price level);
2. explain what fiscal policy and monetary policy can (and cannot) achieve;
3. portray economies being regularly hit by various shocks.

However,

• The unit is substantially more applied than the pre-requisite macroeconomics units
• The unit emphasises novel effects and issues due to openness and the inter-relatedness of economies.

Your learning on this unit

An overview of content

• Exchange rates (ER henceforth) and the foreign exchange market
• Money, prices, interest rates, and ER in the short- and in the long-run
• Macroeconomics (shocks and policies) under flexible ER and fixed ER
• Applications: crises (e.g., the UK and the ERM crisis, the East Asian Crisis, the Euro crisis) and current issues (e.g., capital controls, the international monetary system, currency manipulations, dollarizations and euroizations)

How will students, personally, be different as a result of the unit what you know, how you think and what you can do.

By the end of the unit students will have a much better understanding of real-world macro than before. And for those working in a financial institution (as, for instance, macro analysts or forex traders), this will substantially improve their ability to analyse issues and make sensible trading calls.

Learning Outcomes

By the end of this unit, students will be able to:

1. Demonstrate knowledge and understanding of past open-economy crises and current issues
2. Apply appropriate macroeconomic models to open-economy issues
3. Analyse the responses of economies to shocks and policy changes
4. Evaluate the possible choices available to countries within the open-economy trilemma

How you will learn

Teaching will be delivered through a combination of large and small group classes, supported by online resources

How you will be assessed

Tasks which help you learn and prepare you for summative tasks

• 1500-word essay
• Problem set

Tasks which count towards your unit mark

• Examination (2-hours) (This assesses all learning outcomes)

When assessment does not go to plan

Reassessment is not normally available for final year units. Where students are taking this as a non-final year unit (e.g. as part of an MSci programme), reassessment will be a 2 hour examination.

Resources

If this unit has a Resource List, you will normally find a link to it in the Blackboard area for the unit. Sometimes there will be a separate link for each weekly topic.

If you are unable to access a list through Blackboard, you can also find it via the Resource Lists homepage. Search for the list by the unit name or code (e.g. ECON30010).

How much time the unit requires
Each credit equates to 10 hours of total student input. For example a 20 credit unit will take you 200 hours of study to complete. Your total learning time is made up of contact time, directed learning tasks, independent learning and assessment activity.

See the Faculty workload statement relating to this unit for more information.

Assessment
The Board of Examiners will consider all cases where students have failed or not completed the assessments required for credit. The Board considers each student's outcomes across all the units which contribute to each year's programme of study. If you have self-certificated your absence from an assessment, you will normally be required to complete it the next time it runs (this is usually in the next assessment period).
The Board of Examiners will take into account any extenuating circumstances and operates within the Regulations and Code of Practice for Taught Programmes.