Prof. Dr. Andreas Freytag, PD Dr. Markus Pasche

The examination consists of several parts: there are two assignments during the semester (25% each) and a final written exam (50%). The points of the assignments and the points of the exam are added and translated into a grade. Students can also combine the points achieved in an assignment with the resit exam.

If parts of the exam are within the usual registration period of the examination regulations, the special regulations issued by the examination board apply for the latest possible registration and deregistration before the first part of the exam.

To be announced at the beginning of the course.

English

684 M.Sc. Economics: Pflichtmodul / Wahlpflichtmodul

Lecture (2h per week), Exercise (2h per week)

• Theory of exchange rate determination
• Understanding balance of payments
• Macroeconomics of open economies: Dornbusch’s overshooting model; New Keynesian macroeconomic model
• Taxonomy and history of exchange rate regimes
• Rules versus discretion: theoretical foundations of monetary policy
• Central bank independence (de jure and de facto)
• Theories of currency crisis
• Current issues of monetary policy

• Students are able to explain the various determinants of exchange rates, and how foreign exchange markets interact with other markets in a macroeconomic model. They can apply their macroeconomic knowledge to real situations, and assess monetary policy responses to demand and supply changes.
• Students are able to describe and to critically analyze the theoretical foundations of a pre-committed, time consistent monetary policy and central bank independence. They are able to explain how monetary policy is affected by fiscal policies as well as by institutional settings (e.g. exchange rate regimes).
• Students understand the different mechanisms how a currency crisis might occur.
• Students are able to make informed contributions to current debates about macroeconomic development and monetary and fiscal policies.