1. BGP-620: International Macroeconomics Course Preview, Shopping Day
Prof. Jeffrey Frankel
January 19, 2017

2. BGP-620: International Macroeconomics [formerly ITF 220: The Economics of International Financial Policy]
I.e., Open-economy macroeconomics
Professor: Jeffrey Frankel
Office hours: Mon.& Tues., 3:00-4:00.
Pre-requisites:
Introductory micro-economics
Intermediate macro-economics
Comfort with quantitative thinking, esp. algebra

3. Prerequisite for BGP 620: standard Intermediate macroeconomics.
For example: API 121 Macro Theory & Policy Spring Jeff Fuhrer

4. Courses at more advanced levels than BGP-620:
API-120 Fall JF Advanced Macro for Open Economy I
API-119 Spring Filipe Campante + JF Advanced Macro for Open Economy II

5. Other useful / relevant courses
Econometrics
Finance –
API Fall Akash Deep Finance
BGP Spring Carmen Reinhart Financial Crises
International trade --at a much less technical level,
BGP Fall Robert Lawrence Political Economy of Trade
BGP-225 Spring Robert Lawrence Future of Globalization
& Larry Summers

6. Substitutes for BGP-620 In the Economics Department (FAS):
- Ec Spring Gita Gopinath Foundations of International Macroeconomic Policy (intermediate) - Ec Fall Ken Rogoff International Financial and Macroeconomic Policy (advanced) -- Ec Not offered International Monetary Economics

7. Professor Jeffrey Frankel, Kennedy School, Harvard University
Topics covered in BGP-620
I) ELASTICITIES & THE TRADE BALANCE
II) THE KEYNESIAN MODEL OF INCOME
MONEY AND THE BALANCE OF PAYMENTS
IV) GLOBALIZATION OF FINANCIAL MARKETS
V) FISCAL & MONETARY POLICY UNDER INTERNATIONAL CAPITAL MOBILITY
VI) INTERDEPENDENCE & COORDINATION
VII) SUPPLY, INFLATION & MONETARY UNION
VIII) EXPECTATIONS, MONEY & DETERMINATION OF THE EXCHANGE RATE
Professor Jeffrey Frankel, Kennedy School, Harvard University

8. Some applied illustrations
of international economic questions that we study in BGP-620

9. Why has the US trade balance shown a downward trend since 1965?
with temporary improvements in & ?
↑ Surplus ↓ Deficit

10. Why did global trade collapse in the 2008-09 global recession?
(much more than usual)
2009
Bussière, Callegari, Ghironi, Sestieri, & N.Yamano, 2013, "Estimating Trade Elasticities: Demand Composition and the Trade Collapse of "

11. Has fiscal austerity helped, as a response to the euro crisis?
Source: P.Krugman, 10 May 2012, via R.Portes, May 2013.

12. Why are MacDonald’s hamburgers expensive in Norway & Switzerland?
but cheap in India & Ukraine?

13. Why has China been losing foreign exchange reserves since mid-2014?
June 2014
Dec.2016
Decline since peak: $1.0 trillion

14. Why did Mexico used to suffer a currency crisis every 6 years?
Mexican inflation,
Changes in the $ value of the peso,

15. Hyperinflation: Why did Zimbabwe’s inflation rate reach 2,600% per month in mid-2008?

16. After Fed “taper talk” in May 2013, why did capital flows to Emerging Markets reverse?
Powell, Jerome  “Advanced Economy Monetary Policy and Emerging Market Economies.”  Speech at the Federal Reserve Bank of San Francisco Asia Economic Policy Conference, November .