UNIVERSITY OF MANITOBA Faculty of Arts Department of Economics Summer 2016

UNIVERSITY OF MANITOBA
Faculty of Arts
Department of Economics
Summer 2016
Course Title:
Course Number:
Class Meetings:
Class Location:
International Finance
Econ 3680 A01
Mondays and Wednesdays: 4:15 pm - 7:00 pm
EITC E2 Rm: 125
Instructor:
Office Location:
Email:
Office hours:
Prosper Koto
551 Fletcher Argue
[email protected]
Mondays 10:00 am – 11:00 am
Course Description:
A study of the theory of international financial markets and issues in open economy macroeconomics focusing on the
balance of payments, exchange rates and the effects of global economic integration on national economies.
Prerequisite: a grade of "C" or better in one of ECON 2020 or ECON 2471 or the former ECON 2470 (018.247) or
the former ECON 2800 (018.280). ECON 3020 or ECON 2481 or the former ECON 2480 (018.248) is
recommended.
Objectives and Content:
The expansion of the international economy since the Second World War produced an international environment in
which markets have bypassed national regulations. The purpose of this course is to study the economists’ perspective
on international finance. The examination of the institutions of international finance and the key policy problems that
have arisen in recent decades are the primary concern of this course. Exploring questions of policy within the
international financial system requires an understanding of three principal types of material: 1) the institutional
structure of the modern global financial system 2) the principles of financial policy analysis of an open economy 3) the
principles affecting some current policy issues in international finance. This course will cover all three.
Copyright Statement:
It is the policy of the University of Manitoba to regard any and all class materials, outlines, handouts, syllabi,
PowerPoint Presentations, (including audio and video recordings) as the intellectual property of the course professor.
Copyright and all rights to distribution, transmission, release, or duplication in any form and by any means including
electronic media, of this material belong to the course instructor, who has sole decision-making authority concerning
requests for release, use, or publication.
Required Textbook:
1. P.R. Krugman, M. Obstfeld and M. J. Melitz (2015). International Finance: Theory and Policy, 10th Edition
Recommended Textbook:
2. Keith Pilbeam (2013) International Finance, Fourth Edition, Basingstoke UK: Palgrave Macmillan.
Page 1 of 4
Course Technology:
This course is on D2L. To access D2L, open a browser and type http://umanitoba.ca/d2l into the web address line.
Enter your UMnetID username and case-sensitive password (usually your password used in JUMP) in the appropriate
fields in the login dialog box. Click Login. Be sure to familiarize yourself with the course site right away and visit it
often. The site contains basic information that will be of use to you as we proceed through the course, including
graphs/tables for you to print and bring to class, handouts, announcements, the course outline, and any other
information related to the course.
I expect that you to:
 Conduct yourself politely during classes. Good behavior includes keeping quiet during class, and so forth.
If you engage in actions that are disruptive to the class, I will probably ask you to leave the classroom for
the duration of the class session.
 Read your textbooks before each class
 Practice answering problems and questions often.
 Ask questions in class. Do not be afraid of asking a “silly” or “stupid” question. There is no such thing.
There are probably 10 or more other students with the same problem as you so you will be doing many
people a favor.

Seek help from the instructor and teaching assistant in office hours. Ask for help as soon as you can once
you have a question or confusion. Do not wait until right before a due date or test.
You can expect me:
 To reply to your email within 48 hours. Do not send a follow-up message until you have allowed 48 hours
to pass since sending your initial inquiry.

To check my email once per weekday, usually before 10:00 am. I will not check email over the weekend.
Any email you send must contain your first and last name and student number in the text body. Please use
full sentences in your emails.

You do not need an appointment to see me during my office hours. You can just drop by my office during
those times. If you want to meet me another time, send me an email, and we can set up a time
Academic integrity:
Be sure to acquaint yourself with the University’s policies on academic integrity and dishonesty, including plagiarism
and cheating as well as exam impersonation, covered in section 7 of the UM’s Calendar and are also described and
discussed at the Arts Student Resources website at http://www.umanitoba.ca/faculties/arts/student/index.html.
Ignorance of the regulations and policies regarding academic integrity is not a valid excuse for violating them. The
most common penalty in the Faculty of Arts for academic dishonesty on a test or examination is F on the paper and F
(CW) for the course. For more severe acts of academic dishonesty on a test or examination, such as repeat violations,
the penalty can also include suspension for up to five years from registration in courses taught in a particular
department in Arts or from all courses taught in this faculty.
Page 2 of 4
Methods of Evaluation:
Type
1. MyEconLab (top 8 out of 9)
2. Midterm
May 25, 2016
3. Assignment(s)
TBA
4. Final Exam (2 hrs)
June 17, 2016
Contribution to final Grade
24% (3% each)
25%
11%
40%
MyEconLab: There will be nine labs assigned, one for each chapter (Appears as homework in MyEconLab). Each lab
consists of 10 to 20 questions from each chapter. You are required to purchase access code to this site. For each lab
session, you have two attempts. Your top score out of the two attempts will count. The first five lab assignments are
due May 24. The remaining the lab assignments are due on June 15, 2016. There will be no extensions for any reason
for labs. Your lowest lab score out of the nine will be dropped. Each remaining lab contributes 3%, and the total will
count for 24% of your total. More information on how to sign into MyEconLab is found at the last page of the course
outline. Or,
please follow the link below;
https://register.pearsoncmg.com/reg/include/consent.jsp?originalDest=/reg/buy/buy1.jsp?productID=3
19164
Notes about evaluation:
 Assignments and exams will be based primarily on content from the textbook. The test and exam will
potentially cover all course material, including readings, lectures, handouts, and additional exercises.

There will be no make-up for tests. If you miss a test for documented medical or compassionate reasons, the
weight of the test will be shifted to the final exams. However, if you miss a test or assignment without a
documented medical or compassionate reason, you will receive a score of zero.

Presenting a medical note does not necessarily guarantee that your case will be treated on compassionate
grounds; the decision to shift the weight of a missed test to the final exam will be based on the merits of your
case.

You must appeal any mark on term work whether informally or formally, within ten working days of receiving
your score.
Grading Scale:
A+: 100% - 95%
B+: 84.9% - 75%
C+: 64.9% - 60%
D: 54.9% - 48%
A: 94.9% - 85%
B: 74.9% - 65%
C:
F: 47.9% - 0%
59% - 55%


Course grades are subject to departmental review.
The last day for voluntary withdrawal from this course is June 7, 2016

In keeping with UM policy, any term work that has not been claimed by students will be held for four months
from the end of the final examination period for the time in which the work was assigned. At the conclusion
of this time, all unclaimed term work will be destroyed according to FIPPA guidelines.
Final Exam: June 17, 2016
Page 3 of 4
Tentative outline of topics:
1. National Income and the Balance of Payments
 Krugman, Obstfeld & Melitz (2015), Chapter 2
 Pilbeam, Chapters 1-5
2. Exchange Rates and Foreign Exchange Markets
 Krugman, Obstfeld & Melitz (2015) Chapter 3
3. Money, Interest Rates, and Exchange Rates
 Krugman, Obstfeld & Melitz (2015), Chapter 4
4. Price Levels and the Exchange Rate in the Long Run
 The Law of One Price and the Purchasing Power Parity
 The Fisher Effect, the Interest Rate, and the Exchange Rate Under the Flexible-Price Monetary
Approach
 Krugman, Obstfeld & Melitz (2015), Chapter 5
5. Output and the Exchange Rate-Short Run
 Krugman, Obstfeld & Melitz (2015), Chapter 6
6. Fixed Exchange Rates and Foreign Market Intervention
 Krugman, Obstfeld & Melitz (2015), Chapter 7
7. Financial Globalization: Opportunity and Crisis
 Krugman, Obstfeld & Melitz (2015), Chapter 9
8. The Theory of Optimum Currency Areas
 Krugman, Obstfeld & Melitz (2015), Chapter 10
9. Financing Development
 Krugman, Obstfeld & Melitz (2015) , Chapter 11
Page 4 of 4