API 120: Macroeconomic Policy Analysis I Jeffrey Frankel, Harpel Professor of Capital Formation and Growth Harvard Kennedy School COURSE OVERVIEW

Teaching Fellow: Tilahun Emiru Course Assistants: Jing Zhao & ________ Faculty Assistant: Minoo Ghoreishi, Belfer 505 384-7329 Lectures: L140, Mon. & Wed., 2:40-4:00 pm (& Fri., 9/6/13) Review Sessions: Fri., 8:40-10:00  & 10:10-11:30 am, L140  Final exam: Monday, Dec.16, 2 p.m.- 5 p.m. If you can’t take the exam that day, or the mid-term, don’t take the course. Grading : Problem sets 25% (8 of them), mid-term exam 25%; final exam 50%. Who can take the course? MPA/IDs, for whom it is designed. One or two others, to whom I have given permission, and at their own risk.

Class meeting guidelines The same expectations for classroom conduct reviewed in other MPA/ID classes apply here too. E.g., be on time. Use name placards. Fixed seating chart, same as in other classes. Drop boxes for all MPA/ID assignments on 2nd floor of Littauer behind the Forum Screen. Assignments must be turned in by 1pm on the day they are due.   Assignments will be returned via mail folders in the MPA/ID area. Problem set handouts will be placed at both sides of the classroom.  Lectures will start on time.

Topics: Devaluation and the Trade Balance The Mundell-Fleming Model III. Money and Inflation IV. Purchasing Power Parity V. Small Open Economies VI. Exchange Rate Regimes VII. Integration of Financial Markets VIII. Exchange Rate Determination IX. Emerging Markets X. Portfolio Diversification

APPENDIX 1: Overview of Models & Assumptions

Empirical Evidence

Overview of Models and Assumptions (concluded)

Appendix 2: Lectures by Topic

Lectures by Topic (continued)

Lectures by Topic (continued)