International Finance and Open-Economy Macroeconomics

Theory, History, and Policy

This historically-based textbook on international finance and open-economy macroeconomics provides a complete course on the theory and policies that shaped our international financial system. Utilizing the 1944 Bretton Woods Conference as a unifying theme, the book covers all the standard topics of international finance, such as foreign exchange markets, balance of payments accounting, macroeconomic policy in an open economy, exchange rate crises, multinational enterprises, international banking, and the evolution of our international financial system. The detailed international financial theory is presented in a lively manner that reflects the close relationship between actual world events and the development of economic thought.

The book also analyzes the causes of the 2008 international financial crisis and recession, encourages critical thinking about whether the current international financial system promotes human well-being, and concludes with a discussion on whether it is time to summon the world's financial leaders to another Bretton Woods Conference. In additional to providing students with a solid understanding of international finance and open-economy macroeconomics, the book is written in a reader-friendly style that makes it a good reference for anyone interested in the many fascinating issues related to our still-evolving global financial system and, more generally, our global economy.

The Instructor's manual is available upon request for all instructors who adopt this book as a course text. Please send your request to [email protected].

Contents:

• Introduction to International Finance:

  • Introduction
  • The Balance of Payments and the Macroeconomy

• The Foreign Exchange Market:

  • The Foreign Exchange Market
  • The Interest Parity Condition
  • Dealing with Exchange Rate Volatility: Hedging Foreign Exchange Exposure
  • The Microstructure of Foreign Exchange Markets

• Open-Economy Macroeconomics:

  • The Mundell–Fleming Open-Economy Model
  • The Supply Slide of the Economy
  • The Aggregate Demand/Aggregate Supply Model

• The History of International Financial Policy:

  • Exchange Rate Crises
  • More Exchange Rate Crises
  • The International Financial System: The International Gold Standard, 1870–1914
  • The Tumultuous Interwar Period: 1918–1940
  • Bretton Woods to the Present
  • The Euro and the European Union

• International Financial Issues:

  • Foreign Direct Investment and Multinational Enterprises
  • International Investment, International Banking, and International Financial Markets
  • The 2008 Financial Collapse and Recession: Is It Time for a New Bretton Woods Conference?

Readership: Undergraduate and graduate students in international finance; students in international economics; economists, financial industry professionals and government officials.
Key Features:

• Provides readers an international finance text that is more focused than other general international economics textbooks
• Combines theory, evidence, case studies, history, and policy chapters to provide readers comprehensive and practical knowledge pertaining to international finance and open-economy macroeconomics
• Emphasizes relevance over pure theory by linking theoretical models to world events and the broader history of thought