PA 854: Macroeconomic Policy and International Financial Regulation

This site provides resources for students in PA 854 at the University of Wisconsin, Madison for Spring 2013 Semester

Chinese foreign reserves, ex.-gold, in billions of USD. Source: IMF, International Financial Statistics..

Instructor
Professor Menzie Chinn
Office Hours: MW 3-3:45, W 5:30-6
7418 Social Sciences
Tel: (608) 262-7397
email: mchinn@lafollette.wisc.edu
Home Page

Course Syllabus

The textbook is Caves, Frankel and Jones, World Trade and Payments 10th Edition, available at the University Bookstore. Additional assigned readings will be available on the Web (via links on this website).

Important Dates

• Midterm 1: 3/11
• 3/18 lecture cancelled
• Special lecture on Wed, 3/20: 7324 Social Sciences (Lecture by Gong Cheng)
• Special location for Mon, 4/1 lecture: 594 Van Hise
• Midterm 2: 4/24
• Term paper due: 5/10. 5/13 5PM.

Course Materials and Sources of Economic Information

Downloadable Course Materials

• Lecture 01 (1/23)
• Lecture 02 (1/28)
• Notes on Exchange Rate Determination, Devaluation and Elasticities Approach
• Notes on the NSI and the Keynesian Model
• Notes on the Two Country Keynesian Model
• OECD, Herve (2010) Tables 3, 4
• Notes on Expenditure Switching/Reducing
• Problem Set 1 due 2/25
• Notes on IS-LM
• Notes on Aggregate Demand - Aggregate Supply
• Notes on IS-LM-TB=0
• Problem Set 1 Answers due 2/25
• Problem Set 2 due 3/6
• Spring 2012 Midterm 1
• Problem Set 2 Answers due 3/6
• Notes on IS-LM-BP=0 under Fixed Rates
• Notes on IS-LM-BP=0 under Floating Rates
• Midterm 1 Answers
• Midterm 1 Statistics/Grade Distribution
• Paper Assignment due 5/10
• Notes on The IS-LM-BP=0 Model with Expected Depreciation under Floating and Fixed Rates
• Notes on The Financial and Economic Crisis Interpreted in a CC-LM Models
• Notes on Purchasing Power Parity
• Notes on Interest Rate Parity
• Problem Set 3
• Notes on Exchange Rate Determination
• Notes on Bubbles in Exchange Rates
• Spring 2012 Midterm 2
• Problem Set 3 Answer Key due 3/17
• Notes on the Trilemma
• Midterm 2 Answers
• Midterm 2 Statistics/Grade Distribution
• Problem Set 4 due 5/6
• Handout on Emerging Market Issues
• The Euro Zone in Crisis (5/8)
• Problem Set 4 Answers due 5/6

Required Readings

• [WEO] IMF, World Economic Outlook update (January 2013).
• [BIS] TriennialCentral Bank Survey Report on global foreign exchange market activity in 2010 (Basel: BIS, December).
• [CEA] White House Council of Economic Advisers, The Economic Report of the President, 2013, Chapter 2.
• [OECD] K. Herve, 2010, “The OECD's New Global Model,” Economics Department Working Paper No. 368 (Paris: OECD, December).
• [PP] M. Pakko and P. Pollard, 2003, “Burgernomics: a big Mac guide to purchasing power parity,” Federal Reserve Bank of St. Louis Review 85(6): 9-28.
• [Br] M. Brunnermeier, forthcoming, “Deciphering the Liquicity and Credit Crunch of 2007-08,” Journal of Economic Perspectives.
• [Ch] M. Chinn, 2006, "The Rehabilitation of Interest Rate Parity in the Floating Rate Era: Longer Horizons, Alternative Expectations, and Emerging Markets," JIMF 25.
• [Hu] M. Hutchison, 2003, “Is official foreign exchange intervention effective,” FRBSF Economic Letter 2003-20 (July 18).
• [Fr] J. Frankel, 2003, “Experience of and lessons from exchange rate regimes in emerging economies,” mimeo (Cambridge: Harvard University, September).

Additional Optional Readings/Links

• J. Shambaugh, "The Euro's Three Crises," BPEA (2012:1)
• IMF, World Economic Outlook (April 2013).
• A. Lowrey, "A Study That Set the Tone for Austerity Is Challenged," NYT 16 April 2013.
• IMF conference, "Rethinking Macro Policy II: First Steps and Early Lessons"
• US Treasury, Semiannual Report on International Economic and Exchange Rate Policies
• J. Frankel, "The Dazzling Dollar," BPEA 1985(1).
• Cheng, "A Growth Perspective on Foreign Reserve Accumulation," mimeo
• Ghosh, Ostry and Tsangarides, "Shifting motives: Explaining the build-up in official reserves in emerging markets since the 1980s," VoxEU, 6 Feb 2012

News Sources

• Financial Times online
• New York Times online
• Washington Post online
• Wall Street Journal online
• BBC news online
• Reuters online
• Bloomberg online
• The Economist

Other

• Resources on the RMB
• PA974-001 (Fall 2012): Monetary Policy and Financial Policy in the Wake of the Great Crisis
• Menzie Chinn and Jeffry Frieden, The Lost Decades: The Making of America’s Debt Crisis and the Long Recovery (W.W. Norton)

Weblogs

• Econbrowser (UCSD and UW-Madison) blog
• Real Time Economic Issues Watch from Peterson Institute for International Economics.
• WSJ RealTime Economics
• SF Fed "FedViews"
• RGE Monitor
• Global Economy Matters blog
• Greg Mankiw's blog (Harvard)
• Brad DeLong (UC Berkeley) blog
• Morgan Stanley Global Economic Forum Commentary on international macro issues.
• Baseline Scenario Blog
• Council of Economic Advisers Blog [US Government].

Economics and Economic Policy Links

• Resources for Economists Extensive links to data sources, working papers and organizations.
• American Enterprise Institute Right of center think tank.
• Brookings Institution Moderate/left of center think tank.
• Peter G. Peterson Institute for International Economics
• Institute for International Finance Think tank associated with international banks.
• Economic Policy Institute Left of center labor-oriented think tank.

International Organizations

• International Monetary Fund
• World Bank
• Bank for International Settlements The central banks' central bank.
• Organization for Economic Cooperation and Development Developed country research organization.

U.S. Government Agencies

• White House Council of Economic Advisers
• U.S. Department of the Treasury
• Congressional Budget Office Nonpartisan analytical agency of the Congress.
• Federal Reserve Board

Current and Historical Data

• Note: IMF, International Financial Statistics, and World Bank, World Development Indicators, available from DISC.
• St. Louis Fed economic database Thousands of time series on economic activity, in an easily downloadable form.
• Economic Indicators Many Department of Commerce economic series, all in one place.
• White House Economic Briefing Room Contains current economic data.
• Economic Indicators Publication of CEA and Congressional Joint Economic Committee contains recent economic data.
• Bureau of Economic Analysis, Dept. of Commerce Data on GDP and components (the national income and product accounts) as well as other macroeconomic data.
• Bureau of the Census, Dept. of Commerce Data on the characteristics of the US population as well as of US firms.
• Bureau of Labor Statistics, Dept. of Labor Data on wages, prices, productivity, and employment and unemployment rates.
• Energy Information Agency, Dept. of Energy Data on on energy (electricity, gas, petroleum) production, consumption and prices.
• Statistical Abstract of the US A compilation of statistics about the US, from government and nongovernment sources.
• Bank for International settlements Effective Exchange Rate Indices.
• Economic Report of the President, various years. The back portion of this annual publication contains about 70 tables of government economic data.
• NBER Data Specialized economic databases created by economists associated with the National Bureau of Economic Research.
• NBER listing of economic releases Compendium of links to economic releases, and archived releases.
• Pacific Exchange Rate Service.
• Federal Reserve Board data Monetary, financial and output data collected by the Nation's central bank.
• Penn World Tables Annual GDP and other data for over a hundred countries, expressed in dollars, after adjusting for differing price levels.