6 ECTS credits
150 h study time
Offer 1 with catalog number 6007644DEW for working students in the 1st semester at a (D) Master - preliminary level.
Given the widely divergent background of students, the introductory part of the course will be devoted to building a three-markets model – the DD-AA model – that allows to analyse the impact of government macroeconomic policies (both monetary and fiscal policy) in an open economy and under both floating and fixed exchange rates. Additionally, the following topics will be covered (in part by means of blended learning): national income accounts and the financial consequences of current account deficits, balance of payments accounts, and the balance sheet of a central bank.
The second part of the course will discuss the institutional framework of the European System of Central Banks. Topics covered will include: the mandate and target of the ECB, the ECB’s two-pillar strategy, the policy instruments of the ECB, a comparison of the ECB with other central banks, etc.
The final part of the course will analyse – depending on the time available – important topics related to the conduct of monetary and fiscal policy in the euro-zone, such as: the use of ‘unconventional’ monetary policy tools, the importance of regional differences, fiscal federalism, the interaction between fiscal and monetary policy, etc.
In short, we will gradually move from 'pure' theory to topics of a more applied nature, and from general issues to more eurozone-specific topics.
Required reading: Chapters 1-7 & 10 from Krugman, P. R., Obstfeld M. and M. Melitz, International Finance: Theory and Policy, Global Edition, 11e, Pearson, 2018 (ISBN 13: 978-1292238739).
Additional material will be made available via the Canvas website of the course.
All slides will be made available via the website.
At the end of the course, students should be familiar with the institutional framework of the European System of Central Banks (ESCB) as well as with the mandate and strategy of the European Central Bank (ECB).
Students should understand how monetary policy works in general (under both floating and fixed exchange rates), and more specifically how the monetary policy instruments of the ECB function. Students should understand the difficulties of conducting monetary policy in the presence of regional differences between eurozone member countries.
Students should understand the macro-economic impacts of fiscal policy in a currency union. Students should be able to analyse important issues related to the conduct of economic policy in the euro-zone – and in particular the interaction between fiscal and monetary policy.
Students should have a clear understanding of the factors that influence the external value of the euro. Students should understand the financial implications of running a current account deficit, c.q. surplus. Students should understand the difficulties of conducting monetary policy in the presence of regional differences between eurozone member countries.
Finally, and most importantly, should also be able to apply the theories studied on real-life cases and come up with an informed opinion.
The final grade is composed based on the following categories:
Written Exam determines 90% of the final mark.
Other Exam determines 10% of the final mark.
Within the Written Exam category, the following assignments need to be completed:
Within the Other Exam category, the following assignments need to be completed:
Written exam for 90% of the grade; intermediate test on the content of the blended learning material for 10% of the grade. Examples of old exam questions are available via the website.
This offer is part of the following study plans:
Master of European Integration: Track 1_Economic Integration: European Economy - Migration and Europe
Master of European Integration: Track 2_Economic Integration: European Economy - European External Relations and Security Policy
Master of European Integration: Track 3_Economic Integration: European Economy - European Environmental Governance