UW-Madison ECONOMICS 872 - Economics 872 Syllabus (7 pages)

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Economics 872 Syllabus



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Economics 872 Syllabus

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Lecture Notes


Pages:
7
School:
University of Wisconsin, Madison
Course:
Economics 872 - Adv International Economics

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Econ 872 Spring 2010 C Engel Syllabus This course covers topics in open economy macroeconomics and international finance It introduces topics of current research in the field There are several topics listed below We may not cover all of them Why study open economy macroeconomics 1 What economies are closed Although American macroeconomics tends to favor closedeconomy models that approach is likely to become outdated soon enough A closed economy model may still be a reasonable approximation for the U S economy but for nowhere else Open economies have significantly different features than close economies so it is necessary to understand how openness affects the macroeconomy 2 It is useful to learn the field just to learn the methodologies Open economy macro is necessarily general equilibrium while closed macro sometimes focuses on partial equilibrium behavior Open economy models are forced to deal with agents that are not homogenous because there are at least agents in two different countries while closed models often have representative agents Understanding the key issues in open economy macro models requires understanding the interaction between financial markets goods markets and factor markets while these interactions are often trivialized in closed macro 3 Research in open economy macro is driven by empirical anomalies the behavior of prices asset pricing puzzles risk sharing puzzles etc Closed macro often ignores inconvenient empirical facts but they are impossible to ignore in open macro because they are so prominent in the study of prices exchange rates current account balances etc Referee reports For each topic there will be a short introductory lecture Then we will go into some recent papers in detail We won t be able to cover all the papers on the reading list so I will ask you to read some of them and write referee reports The referee report will be a 3 page singlespaced report on the paper I expect these reports to state the problem that the paper is



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