8/19/2019 ECON 352-International Finance-Syed M Hussain

1/2

 Lahore University of Management Sciences

ECON 352 – International FinanceSpring 2016 

Instructor Syed Muhammad Hussain

Room No. 260

Office Hours TBA 

Email Muhammad.hussain@lums.edu.pk 

Telephone

Secretary/TA

TA Office Hours

Course URL (if any)

Course Basics

Credit Hours 4

Lecture(s) Nbr of Lec(s) Per Week 2 Duration 110 minutesRecitation/Lab (per week) Nbr of Lec(s) Per Week Duration

Tutorial (per week) Nbr of Lec(s) Per Week Duration

Course Distribution

Core

Elective

Open for Student Category

Close for Student Category

COURSE DESCRIPTION

The main objective of this course is to provide you with a clear understanding of the foundations of internationalfinance by using a blend of theoretical concepts and real world applications such as balance of payments problemsand policies and the causes of exchange rate movements. In addition, we will also examine some current policy-related issues that have taken center stage in international media. For example, Which exchange rate regime isbetter: fixed or flexible? What are the benefits and costs of forming a monetary union? Why have there beenexchange-rate crises in Asia, Russia and South America in late 1990s? How can the international monetarysystem be reformed and improved? By the end of the course you should be able to understand basic analysisof open economy models, apply this analysis to address key policy issues and take interest in the debates thatmakes this area so exciting and fascinating. 

COURSE PREREQUISITE(S)

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Intermediate Macroeconomics

COURSE OBJECTIVES

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To introduce students to the basic concepts of international finance including exchange rates and foreign exchange markets.

To enable students to analyze graphical and basic mathematical models of open economy.

To study real world problems in lights of topics learnt in the course.

Learning Outcomes

mailto:Muhammad.hussain@lums.edu.pkmailto:Muhammad.hussain@lums.edu.pkmailto:Muhammad.hussain@lums.edu.pk

8/19/2019 ECON 352-International Finance-Syed M Hussain

2/2

 Lahore University of Management Sciences

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At the end of this course, we will discuss the experience of various developing countries and see how the theoretical models

explain the success and failure stories of these countries. We will also discuss some of the recent developments in Pakistan and

rationalize them using the tools we will have by then.

Grading Breakup and Policy

Quiz(s): 6 (one will be dropped) – 30%

Midterm Examination: 30%

Final Examination: 40%

Examination Detail

Midterm

Exam

Yes

Final Exam

Yes

COURSE OVERVIEW

Week TopicsRecommended

Readings

Objectives/

Application

1-6

Foreign Exchange Markets, Balance of

Payments, Exchange rates, Interest Rate Parity,

International Capital Flows.

Melvin (chapters 1 – 5)

Krugman & Obstfeld (chapters 12 –

15)

7-8

Output and Exchange Rates in the Short Run –

The DD-AA model

Krugman & Obstfeld (chapter 16)

9-10

Fixed Exchange Rates and Foreign Exchange

Intervention

Krugman & Obstfeld (chapter 17)

11 History of International Monetary System Krugman & Obstfeld (chapter 18)

12Floating Exchange Rates Regimes Krugman & Obstfeld (chapter 19)

13-14

Special Topics in International Finance

(Optimum Currency Areas, Experience of

Developing Countries)

Krugman & Obstfeld (chapters 20,

22)

Textbook(s)/Supplementary Readings

International Money and Finance, 7th edition, Michael Melvin.

International Economics: Theory and Policy, 6th edition, Krugman and Obstfeld.