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Unit information: International Macroeconomics in 2018/19

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Unit name International Macroeconomics
Unit code EFIM30029
Credit points 10
Level of study H/6
Teaching block(s) Teaching Block 1 (weeks 1 - 12)
Unit director Dr. Correia
Open unit status Not open

EFIM10007 Economic Principles 2



School/department School of Economics
Faculty Faculty of Social Sciences and Law


The unit explains the macro economic implications of an economy being part of an international economy.

It explores theories of why we observe the movements in foreign exchange rates that we do;

why such movements can be volatile;

why there have been many currency crises in recent years;

how government macroeconomic policy operates in an international setting;

and why countries might join a currency union.

Intended learning outcomes

At the end of the course students will develop an understanding of

  • how exchange rates are determined;
  • the impossibility of having at the same time (i) free international capital flows, (ii) a fixed exchange rate and (iii) an independent monetary policy;
  • the pros and cons of various exchange rate regimes (e.g., fixed versus flexible exchange rates);
  • the theory of optimum currency areas;
  • what macro fiscal and monetary policy can do in the context of a small open economy;
  • how an economy’s macroeconomic policy and performance are affected by developments in the international economy.

Teaching details

9 lectures

4 classes

Assessment Details

Summative Assessment:

This is a 1.5 hour closed book exam (100%).

Each question will require students to demonstrate some of the learning outcomes; which ones will depend upon the question.

The exam paper addresses all learning outcomes.

Formative Assessment:

Students will write one essay which will form the basis of class discussions.

The typical essay length is 2000 words.

This essay too will require the student to demonstrate some of the learning outcomes;

which ones will depend upon the question.

Reading and References

P. Krugman, M. Obstfeld and M. Melitz. International Economics: Theory and Policy (Addison-Wesley)