Advanced International Finance

This course offers a rigorous exposition of the latest theoretical developments in international monetary economics. By exposing the students to a substantial amount of journal articles, the course aims at building up students' technical and theoretical background as well as providing the economic and financial knowledge that are useful to a future financial economist, analyst or dealer. Some of the technical applications that could not be covered in the course of International Monetary Economics will be covered here. Students interested in pursuing postgraduate studies in economics or finance are recommended to take this course. Finance, engineering and science students with strong mathematical background that have interest to work in the government and finance sectors are also encouraged to take this course. Topics covered include exchange rate overshooting models; portfolio balance models; stock-flow interactions; role of market fundamentals, expectation, financial and political news and release of government statistics on exchange rate and asset price movements; exchange rate determination using dynamic general equilibrium models; herding behavior; models on the impacts of chartists and fundamentalists on exchange rate dynamics; the US dollar bubble in the early 1980s; the impact of the US budget deficit on its current account and the US dollar appreciation; hysteresis effect and exchange rate pass through; models on speculative attack; empirical tests on purchasing power parity; Stein's natural equilibrium exchange rate model; the monitoring band system; and Singapore's exchange rate system.