EI091 | Spring | 3 ECTS

Advanced International Macroeconomics B: International Policy: Constraints, Changing Effectiveness, and New Tools

This course provides a graduate-level treatment of policy in international economics, with a focus on recent developments. It first reviews assess the drivers of the low level of interest rates in advanced (mostly) economies, as well as the impact of the rising global demand for safe assets. The course then presents the workhorse model of monetary policy design in open economies. It then moves to recent extensions of the model, namely the partial transmission of exchange rates to prices (with a discussion of the dominant role of some currencies), the presence of financial frictions, and the challenge from a lower bound on the interest rate. It proceeds with a review of the evidence of effectiveness of unconventional monetary policies. We then review research on dominant currencies, and the final section offers a discussion of topics that have recently emerged. The first part of the course consists of lectures. The second part consists of presentations of papers from the reading list (with the option to propose a paper not on the list that you would be particularly interested in presenting).