This course is devoted to economic analysis of exchange rate behavior, balance of payments adjustments, the financing of payments imbalances, and related topics in the areas of international monetary, macro, and financial economics. A simple but flexible model of exchange rate determination will be formulated and tested empirically. Considerable emphasis will be given to issues concerning alternative monetary arrangements such as fixed vs. flexible exchange rates, currency unions, and commodity-money standards. Some historical consideration of the pre-1914 gold standard and the 1945-1971 Bretton Woods system will be included, as well as institutional discussion of the present (and prospective) European Monetary System.
