Syllabus - Spring 2024. Further files and details are available at the Moodle system
Ing. Vilém Semerák, M.A., Ph.D.
Annotation -
Last update: Ing. Vilém Semerák, M.A., Ph.D. (20.02.2024)
This course is taught only in English.
Detailed (and more frequently updated) information on this course are provided on the moodle site of this course.
The course will only be taught in the traditional form (on-site) during the Spring 2023/24. No streaming or recording is planned.
This course covers, with a focus on both theory and empirics, basic topics in international finance (exchange rate economics & international macroeconomics) at undergraduate level. The course does not deal with international business methods (logistics, use of letters of credits etc.), instead it focuses on theory and policy analysis and attempts to provide some insight into questions such as the following ones:
• How closely (and in which ways) are international financial transactions linked to national economies and international trade?
• Why determines exchange rates?
• How do national economic policies influence external equilibrium of an economy?
• What effect have different foreign exchange policies and foreign exchange arrangements have on economic stability and economic growth?
• What causes balance of payments crises/international financial crises?
• When it is optimal for several countries to share one currency?
• How many global currencies do we really need?
The course is a logical complement to the International Trade I (JEB039), however, it can be also studied independently, the International Trade course is not considered to be a prerequisite.
We will attempt to provide up-to-date examples and references whenever possible (e.g. by discussing topical issues such as global imbalances, internationalization of “new currencies” (RMB), functioning of new digital currencies, stability of Eurozone.
Last update: Ing. Vilém Semerák, M.A., Ph.D. (20.02.2024)
Tento kurz je v současnosti vyučován jen v anglickém jazyce.
Výuka bude v letním semesteru akad. roku 2023/2024 probíhat pouze prezenčně.
Detailní informace ke kurzu jsou k dispozici na moodle stránkách (přístupový kód bude sdělen během první přednášky, případně je možné o něj požádat vyučujícího).
This course covers, with a focus on both theory and empirics, basic topics in international finance (exchange rate economics & international macroeconomics) at undergraduate level. The course does not deal with international business methods (logistics, use of letters of credits etc.), instead it focuses on theory and policy analysis and attempts to provide some insight into questions such as the following ones:
• How closely (and in which ways) are international financial transactions linked to national economies and international trade?
• Why determines exchange rates?
• How do national economic policies influence external equilibrium of an economy?
• What effect have different foreign exchange policies and foreign exchange arrangements have on economic stability and economic growth?
• What causes balance of payments crises/international financial crises?
• When it is optimal for several countries to share one currency?
• How many global currencies do we really need?
The course is a logical complement to the International Trade I (JEB039), however, it can be also studied independently, the International Trade course is not considered to be a prerequisite.
We will attempt to provide up-to-date examples and references whenever possible (e.g. by discussing topical issues such as global imbalances, internationalization of “new currencies” (RMB), functioning of new digital currencies, stability of Eurozone.
Aim of the course -
Last update: Ing. Vilém Semerák, M.A., Ph.D. (22.02.2016)
At the end of the course its students should:
(i) Understand the logic of balance of payments accounting and its relationships to the national accounting.
(ii) Be able to find and work with usual data on exchange rates and balance of payments.
(iii) Understand the logic of basic macroeconomic models of exchange rate determination.
(iv) Understand the main trends in development of international monetary systems and exchange rate regimes.
(v) Be able to use basic macroeconomic models which can elucidate relationships between national economic policies, exchange rates and external (dis)equilibria of individual economies.
Last update: Ing. Vilém Semerák, M.A., Ph.D. (22.02.2016)
At the end of the course its students should:
(i) Understand the logic of balance of payments accounting and its relationships to the national accounting.
(ii) Be able to find and work with usual data on exchange rates and balance of payments.
(iii) Understand the logic of basic macroeconomic models of exchange rate determination.
(iv) Understand the main trends in development of international monetary systems and exchange rate regimes.
(v) Be able to use basic macroeconomic models which can elucidate relationships between national economic policies, exchange rates and external (dis)equilibria of individual economies.
Course completion requirements -
Last update: Ing. Vilém Semerák, M.A., Ph.D. (20.02.2024)
Grading and related issues:
Continuous work during the course, active and honest participation in the teamwork, and successful participation in the final exam are expected from all participants.
There will be three assignments
The contribution of all the components to the final grade is as follows:
Online quizzes: 12%
Final exam: 64%
(Team) assignments: 24%
Additional bonus points for participation: up to 10 percentage points.
The test will include a quiz (multiple choice questions) + solution of problem sets, mainly by means of models and graphs. The creative thinking and understanding of the problem (e.g. described by a model), will be graded higher than a mere memorization of facts or formulas.
All assignments worked out in this course (by teams or individuals) must be original and subject to specific rules. Plagiarism will be severely punished.
Last update: Ing. Vilém Semerák, M.A., Ph.D. (20.02.2024)
Grading and related issues:
Continuous work during the course, active and honest participation in the teamwork, and successful participation in the final exam are expected from all participants.
There will be three assignments
The contribution of all the components to the final grade is as follows:
Online quizzes: 12%
Final exam: 64%
(Team) assignments: 24%
Additional bonus points for participation: up to 10 percentage points.
The test will include a quiz (multiple choice questions) + solution of problem sets, mainly by means of models and graphs. The creative thinking and understanding of the problem (e.g. described by a model), will be graded higher than a mere memorization of facts or formulas.
All assignments worked out in this course (by teams or individuals) must be original and subject to specific rules. Plagiarism will be severely punished.
Literature -
Last update: Ing. Vilém Semerák, M.A., Ph.D. (20.02.2024)
Main textbook: P. Krugman, M. Obstfeld, M. J. Melitz: International Trade, Theory & Policy. 9th edition or newer. Addison-Wesley (Pearson), 2012.
Alternative texts:
M.D. Levi: International Finance, 5th edition. Routledge, 2009
P. Wang: The Economics of Foreign Exchange and Global Finance. Springer-Verlag Berlin, 2009
T. Pugel.: Int. Economics, 2009, part I & II., pp. 1-378 (available in the IES library)
D. Appleyard, A. Field, S. Cobb: International Economics, McGraw-Hill/Irwin, any recent edition
Other older texts may also be useable for many of the topics, please contact the instructor if you have questions about any of them.
Other sources (selected chapters/sections will be used):
Mundell (1961): A Theory of Optimum Currency Areas. AER
Obstfeld & Taylor (2017): International Monetary Relations: Taking Finance Seriously
Paulson, Henry J. (2020): The Future of Dollar.
Reinhart & Rogoff (2004): The Modern History of Exchange Rate Arrangements: A Reinterpretation.
Rogoff, K. (1996): The Purchasing Power Parity Puzzle. Journal of Economic Literature, Vol. 34, No. 2 (Jun., 1996), pp. 647-668
Rose (2015): How do currency unions affect trade
Wren-Lewis et al (1998): What are equilibrium real exchange rates?
Yang (2012): Aggregate Savings and External Imbalances in China
Requirements to the exam -
Last update: Ing. Vilém Semerák, M.A., Ph.D. (20.02.2024)
Continuous work during the course, active and honest participation in the teamwork, and successful participation in the final exam are expected from all participants.
There will be three assignments
The contribution of all the components to the final grade is as follows:
Online quizzes: 12%
Final exam: 64%
(Team) assignments: 24%
Additional bonus points for participation: up to 10 percentage points.
The test will include a quiz (multiple choice questions) + solution of problem sets, mainly by means of models and graphs. The creative thinking and understanding of the problem (e.g. described by a model), will be graded higher than a mere memorization of facts or formulas.
All assignments worked out in this course (by teams or individuals) must be original and subject to specific rules. Plagiarism will be severely punished.
Grading scale (based on the weighted average score):
A … 91 – 100
B … 81 – 90
C … 71 – 80
D … 61 – 70
E … 51 – 60
F … 0 – 50
Last update: Ing. Vilém Semerák, M.A., Ph.D. (20.02.2024)
Continuous work during the course, active and honest participation in the teamwork, and successful participation in the final exam are expected from all participants.
There will be three assignments
The contribution of all the components to the final grade is as follows:
Online quizzes: 12%
Final exam: 64%
(Team) assignments: 24%
Additional bonus points for participation: up to 10 percentage points.
The test will include a quiz (multiple choice questions) + solution of problem sets, mainly by means of models and graphs. The creative thinking and understanding of the problem (e.g. described by a model), will be graded higher than a mere memorization of facts or formulas.
All assignments worked out in this course (by teams or individuals) must be original and subject to specific rules. Plagiarism will be severely punished.
Grading scale (based on the weighted average score):
A … 91 – 100
B … 81 – 90
C … 71 – 80
D … 61 – 70
E … 51 – 60
F … 0 – 50
Syllabus -
Last update: Ing. Vilém Semerák, M.A., Ph.D. (14.02.2023)
Course outline with dates:
Introduction to international finance. Foreign exchange market: basic features. Sources of data on international transactions, exchanges rates, exchange rate regimes, and financial markets. (February 14th)
Balance of payments structure and national income accounting for open economy. International investment position. Foreign debts. (February 21st)
Introduction to exchange rate determination: asset approach. Covered and uncovered interest rate parity. (February 28th)
Money, interest rates and exchange rates. Long run aspects of exchange rate determination. Oveshooting. (March 7th)
Prices and exchange rates. Fischer effect. Nominal and real (effective) exchange rates. Exchange rates and competitiveness. Balassa-Samuelson effect. (March 14th)
Nominal and real convergence in the EU. Introduction to the AA-DD model. (March 21st)
The AA-DD model: additional details. Application on policy analysis. (March 28th)
Fixed exchange rates: macroeconomic implications. Interventions and sterilization. Policy trilemma. Policy options for reaching internal and external balance. Swan diagram. (April 4th)
Monetary integration: costs and benefits. (April 11th)
Monetary integration: effects – empirical research (April 18th)
Reserve currencies and international monetary system. The future of dollar, RMB, and Euro. (April 25th)
Equilibrium exchange rates: FEER. A brief introduction into the models of balance of payments crises. (May 2nd)
Forex forecasting: fundamental approaches versus alternatives. A brief overview of technical analysis. (May 9th)
Final assignment due. Reserved for a make up class (if needed), can be also used as an early option for the final exam. (May 16th)
Last update: Ing. Vilém Semerák, M.A., Ph.D. (20.02.2024)
Course outline with dates:
Introduction to international finance. Foreign exchange market: basic features. Sources of data on international transactions, exchanges rates, exchange rate regimes, and financial markets. (February 20th)
Balance of payments structure and national income accounting for open economy. International investment position. Foreign debts. (February 27th)
Introduction to exchange rate determination: asset approach. Covered and uncovered interest rate parity. (March 5th)
Money, interest rates and exchange rates. Long run aspects of exchange rate determination. Overshooting. (March 12th)
Prices and exchange rates. Fischer effect. Nominal and real (effective) exchange rates. Exchange rates and competitiveness. Balassa-Samuelson effect. (March 19th)
Nominal and real convergence in the EU. Introduction to the AA-DD model. (March 26th)
The AA-DD model: additional details. Application on policy analysis. (April 2nd)
Fixed exchange rates: macroeconomic implications. Interventions and sterilization. Policy trilemma. Policy options for reaching internal and external balance. Swan diagram. (April 9th)
Monetary integration: costs and benefits. (April 16th)
Monetary integration: effects – empirical research (April 23rd)
Equilibrium exchange rates: FEER. A brief introduction into the models of balance of payments crises. (April 30th)
Forex forecasting: fundamental approaches versus alternatives. A brief overview of technical analysis. (May 7th)
Holiday – Dean’s day (May 14th)
Final assignment due. Reserved for a make up class (if needed), can be also used as an early option for the final exam. (May 21st)
