Modern economies become more and more open and the external sector of an economy becomes more and more important. This textbook aims at clarify ing how an open economy functions, in particular at explaining the determi nants of international fiows of commodities and financial assets. It also aims at examining the effects of these fiows on the domestic and international econ omy and the possible policy acti.ons at the national and international level. Particular attention will be paid to the problems of international economic at both the commercial and monetary level. integration Students will be able to read and interpret the balance of payments of a country, evaluating the various types of balance, to explain the behaviour of commercial fiows in the light of the theories studied, to analyze fiows of financial assets according to interest-rate differentials and other elements, to study the forces that determine exchange rates and cause currency crises, to understand the reasons behind international economic integration such as the European Union, to evaluate the effects of national and international policies.

Inhalt

1 Introduction.- I The Basics.- 2 The Foreign Exchange Market.- 3 Exchange-Rate Regimes and the International Monetary System.- 4 International Interest-Rate Parity Conditions.- 5 The Balance of Payments.- II International Finance and Open-Economy Macroeconomics.- 6 The Basic Models: Elasticities, Multiplier, Mundell-Fleming.- 7 The Monetary and Portfolio Approaches.- 8 Capital Movements, Speculation, and Currency Crises.- 9 Exchange-Rate Determination.- 10 The Intertemporal Approach to the Balance of Payments.- 11 International Monetary Integration and European Monetary Union.- 12 Problems of the International Monetary System.- III International Trade Theory and Policy.- 13 The Orthodox Theory: Comparative Cost, Factor Endowments, Demand.- 14 Tariffs, and Non-Tariff Barriers.- 15 Free Trade vs Protection, and Preferential Trade Cooperation.- 16 The new Protectionism.- 17 The new Theories of International Trade.- 18 Growth, Trade, Globalization.- List of Figures.- List of Tables.- List of Boxes.