ECON 3510 - International Finance III

North Terrace Campus - Semester 1 - 2015

This course deals with the analysis of two important and related macroeconomics issues in open economies: the exchange rate and the capital flows. The objectives of the course are two-fold: to introduce the main concepts, principles and models in the theory and empirical works in those two key areas of International Finance; to apply analytical tools to understand the relevant policy issues in the global markets. Based on additional reading materials, discussions on relevant current events from various parts of the globe will be carried out.

  • General Course Information
    Course Details
    Course Code ECON 3510
    Course International Finance III
    Coordinating Unit School of Economics
    Term Semester 1
    Level Undergraduate
    Location/s North Terrace Campus
    Units 3
    Contact Up to 3 hours per week
    Available for Study Abroad and Exchange Y
    Prerequisites ECON 2506 & ECON 2507
    Incompatible ECON 3032
    Course Description This course deals with the analysis of two important and related macroeconomics issues in open economies: the exchange rate and the capital flows. The objectives of the course are two-fold: to introduce the main concepts, principles and models in the theory and empirical works in those two key areas of International Finance; to apply analytical tools to understand the relevant policy issues in the global markets. Based on additional reading materials, discussions on relevant current events from various parts of the globe will be carried out.
    Course Staff

    Course Coordinator: Dr Steven Hail

    Office location: Nexus 10, Level 3, Room 3.34
    Telephone:       8313 5671

    Course Timetable

    The full timetable of all activities for this course can be accessed from Course Planner.

  • Learning Outcomes
    Course Learning Outcomes
    On successful completion of this course students will be able to:
    1 explain the organisation and institutional details of foreign exchange and international money markets
    2 understand the significance of international flows of portfolio capital in the modern global foreign exchange market, and the world economy
    3 understand and apply, at a formal level, the main neoclassical models of exchange rate determination, and assess their empirical validity
    4 be familiar with insights provided by behavioural economics into expectations formation and decision making on the foreign exchange market
    5 understand and apply a macroeconomic model incorporating the above as a guide to exchange rate forecasting
    6 analyse the causes of historical exchange rate movements, and some of the contributory factors to a variety of financial crises, with reference to the models covered
    University Graduate Attributes

    This course will provide students with an opportunity to develop the Graduate Attribute(s) specified below:

    University Graduate Attribute Course Learning Outcome(s)
    Knowledge and understanding of the content and techniques of a chosen discipline at advanced levels that are internationally recognised. 1-6
    The ability to locate, analyse, evaluate and synthesise information from a wide variety of sources in a planned and timely manner. 1-6
    An ability to apply effective, creative and innovative solutions, both independently and cooperatively, to current and future problems. 1-6
    Skills of a high order in interpersonal understanding, teamwork and communication. 1-6
    A proficiency in the appropriate use of contemporary technologies. 1-6
    A commitment to continuous learning and the capacity to maintain intellectual curiosity throughout life. 1-6
    A commitment to the highest standards of professional endeavour and the ability to take a leadership role in the community. 1-6
    An awareness of ethical, social and cultural issues within a global context and their importance in the exercise of professional skills and responsibilities. 1-6
  • Learning Resources
    Required Resources
    Currencies, Capital Flows and Crises, John T. Harvey, Routledge (London and New York), 2009
    Recommended Resources

    There are several other texts which could have been used on this course. None are recommended here as substitutes to Harvey, since the different texts use a variety of approaches to the models to be discussed, and this can be a source of confusion. Nevertheless one supplementary text which would be of value to course participants in the early part of this course is Exchange Rates and International Finance, (4th or 5th Edition) Laurence Copeland, Prentice Hall/Financial Times (Pearson Education), 2005/8.  

    Online Learning
    MyUni - http://www.myuni.adelaide.edu.au 

    Other online Resources will be provided via the above site, during the course.
     
  • Learning & Teaching Activities
    Learning & Teaching Modes

    The lectures will closely follow the text. The idea is that the lectures and the text should reinforce each other. You are strongly advised to keep up with the reading. You will find that the lectures are far easier to follow if you have already been exposed to the material via the text.

    The tutorials will be primarily based on problem solving and discussions, in preparation for your final examination.

    Workload

    The information below is provided as a guide to assist students in engaging appropriately with the course requirements.

    Lectures: 2 Hours per week
    Tutorials: 1 Hour per week
    Home study expectation: 6 Hours per week

    Learning Activities Summary
    Please note, the following schedule is tentative. Changes can and will be made throughout the semester as necesary, all changes will be published on MyUni.

    Week Course Plan
    TOPIC READINGS
    1 Course Overview:
    Introduction to Basic Concepts in International Finance and Foreign Exchange Markets
    Harvey - Chapter 1 and a Reading Provided via MyUni
    2 International Parity Relationships Reading Provided via MyUni
    3 Neoclassical Models 1 -The Monetary Model of Floating and Fixed Exchange Rates Harvey - Chapter 2
    4 Neoclassical Models 2 - The Dornbusch Overshooting Model of Floating Exchange Rates Harvey - Chapter 2
    5 Empirical evidence on these models and later developments Reading provided via MyUni
    6 Behavioural economics and decision making in the foreign exchange market Harvey - Chapter 3
    7 Capital Flows and Exchange Rates Harvey - Chapter 4
    8 Exchange Rate Modelling using a Keynesian Model Harvey - Chapter 5
    9 Expectations and Currency Crises  Harvey - Chapter 5
    10 Real World Applications - volatility in the USD over time Harvey - Chapter 6
    11 Real World Applications - the Peso (1994) and Asian (1997) crises Harvey - Chapter 6
    12 Currency Areas and the Euro-zone Experiment Readings provided via MyUni
  • Assessment

    The University's policy on Assessment for Coursework Programs is based on the following four principles:

    1. Assessment must encourage and reinforce learning.
    2. Assessment must enable robust and fair judgements about student performance.
    3. Assessment practices must be fair and equitable to students and give them the opportunity to demonstrate what they have learned.
    4. Assessment must maintain academic standards.

    Assessment Summary
    Students will be assessed based on the following:

    Type Weight  Due Date Objective
    Weekly Assignments 40% Weekly, weeks 2-11 Continuous learning, both summative and formative
    Final Exam 60% See Exam Timetable Summative assessment
    Assessment Related Requirements

    Assignment marks received prior to the final examination are equated into your final grade only if they represent improvement over your final examination grade.

    For example, should you score 75/100 on the weekly assignments and 60/100 on the final, your final grade would be credit at (0.4*75+0.6*60)= 66/100. More will be explained about this throughout the semester. Should you score 60/100 on the weekly assignments and 75/100 on the final, your final grade would be distinction, as only the 75/100 will count. More will be explained about this during the first week of the semester. 

    Since marks received prior to the final examination are redeemable, you have nothing to lose and everything to gain by attending tutorials and doing your best on all of the weekly assignments.


     

    Assessment Detail

    NOTES ON ASSESSMENT
    1. Legible hand-writing and the quality of English expression are considered to be integral parts of the assessment process. Marks cannot be awarded for handwriting that cannot be read.

    2. Assessment marks prior to the final exam may be displayed on the course website through Myuni. Students are encouraged to check their marks and notify the lecturer-in-charge of any discrepancies.

    EXAMINATIONS
    It is each student's responsibility to read the examination timetable. Misreading the timetable is not accepted as grounds for granting a supplementary exam. University staff are not permitted to provide examination times to students over the telephone or in response to personal enquiries.

    Students may NOT take into the examination a DICTIONARY (English or English-Foreign)
    Students may NOT take into the examination a CALCULATOR.

    Submission

    Assignments are to be submitted during tutorials each week, except when alternative arrnagements have been approved by the Topic Co-Ordinator.

    Assignments will generally be returned during tutorials/lectures the week following submission.

     

    Course Grading

    Grades for your performance in this course will be awarded in accordance with the following scheme:

    M10 (Coursework Mark Scheme)
    Grade Mark Description
    FNS   Fail No Submission
    F 1-49 Fail
    P 50-64 Pass
    C 65-74 Credit
    D 75-84 Distinction
    HD 85-100 High Distinction
    CN   Continuing
    NFE   No Formal Examination
    RP   Result Pending

    Further details of the grades/results can be obtained from Examinations.

    Grade Descriptors are available which provide a general guide to the standard of work that is expected at each grade level. More information at Assessment for Coursework Programs.

    Final results for this course will be made available through Access Adelaide.

    Additional Assessment
    If a student receives 45-49 for their final mark for the course they will automatically be granted an additional assessment. This will most likely be in the form of a new exam (Additional Assessment) and will have the same weight as the original exam unless an alternative requirement (for example a hurdle requirement) is stated in this semester’s Course Outline. If, after replacing the original exam mark with the new exam mark, it is calculated that the student has passed the course, they will receive 50 Pass as their final result for the course (no higher) but if the calculation totals less than 50, their grade will be Fail and the higher of the original mark or the mark following the Additional Assessment will be recorded as the final result.
  • Student Feedback

    The University places a high priority on approaches to learning and teaching that enhance the student experience. Feedback is sought from students in a variety of ways including on-going engagement with staff, the use of online discussion boards and the use of Student Experience of Learning and Teaching (SELT) surveys as well as GOS surveys and Program reviews.

    SELTs are an important source of information to inform individual teaching practice, decisions about teaching duties, and course and program curriculum design. They enable the University to assess how effectively its learning environments and teaching practices facilitate student engagement and learning outcomes. Under the current SELT Policy (http://www.adelaide.edu.au/policies/101/) course SELTs are mandated and must be conducted at the conclusion of each term/semester/trimester for every course offering. Feedback on issues raised through course SELT surveys is made available to enrolled students through various resources (e.g. MyUni). In addition aggregated course SELT data is available.

  • Student Support
  • Policies & Guidelines
  • Fraud Awareness

    Students are reminded that in order to maintain the academic integrity of all programs and courses, the university has a zero-tolerance approach to students offering money or significant value goods or services to any staff member who is involved in their teaching or assessment. Students offering lecturers or tutors or professional staff anything more than a small token of appreciation is totally unacceptable, in any circumstances. Staff members are obliged to report all such incidents to their supervisor/manager, who will refer them for action under the university's student’s disciplinary procedures.

The University of Adelaide is committed to regular reviews of the courses and programs it offers to students. The University of Adelaide therefore reserves the right to discontinue or vary programs and courses without notice. Please read the important information contained in the disclaimer.