University of Minnesota
ECON 8403 & 8404, International Trade and Payments Theory, Minis 1 & 2
Spring 2010, F, 11.00AM-2.50PM, HMH 4-170
MESSAGE BOARD:
No class on Friday, March 12. Make up scheduled on Monday March 22, 9.30-12.30 HH 4-170
No class on Friday, March 26, Make up scheduled on Monday April 12, 10.00-12.45 HH 4-170
No class on Friday, April 9, make up scheduled on Monday April 19, 10.00-12.45 HH 4-170
No class on Friday, April 23, make up scheduled on Monday April 26, 10.00-12.45 HH 4-170
Final exam on May 14, 11.00-1.00 HH 4-170
SYLLABUS
Class 1
Topic: Basic concepts such us net exports, current account, net foreign asset position, terms
of trade, real exchange rate
Set-up of the basic 2 goods international business cycles model
References:
Backus Kehoe and Kydland AER, Heathcote and Perri 2000
Additional Material: Problem set 1
Class 2
Topics: The basic 2 goods international business cycles model. Computation, calibration, data analaysis (filtering) and model evaluation
Domestic business cycle statistics and international correlations
International prices (The Backus Smith puzzle)
The S-curve
References: Backus Kehoe and Kydland AER, Heathcote and Perri 2000, Backus Smith 1993
Class 3
Topics: International comovement and international asset markets
References: Baxter and Crucini 1995
Additional material: Matlab Programs for solving complete markets and bond economy (the files have a .txt extension in order to use them in Matlab you need to chenge the extension to .m) Complete Markets, Bond. These programs require the Uhlig Suite
Class 4
Topic: International risk sharing problems
References: Lecture notes
Additional material: Problem set 2, Brandt Cochrane and Santa-Clara, 2006, Cole and Obstfeld, 1991, Martin 2009
Class 5:
Topic: International portfolio diversification
References: Heathcote and Perri, 2009, Baxter and Jermann 1997, Van Wincoop and Warnock 2006, Notes on solving portfolio problems
Class 6:
Topic: Limited enforcement of contracts: complete markets and incomplete markets
References: Perri 2007 , Arellano 2007, Bulow and Rogoff, 1989
Additional material: Problem set 3
Class 7
Topic: Solving for efficient allocation with limited enforcement: the primal problem
References: Marcet and Marimon 1998, Kehoe and Perri 2002
Class 8
Topic: Solving for efficient allocation with limited enforcement: the dual problem. Decentralization of allocations
References:
Atkeson and Lucas, 1995, Krueger and Perri, 2009
Class 9
Topic: Applications of limited enforcement
References: Perri and Quadrini, 2010, Aguiar and Amador, 2009
Class 10
International Capital Flows
References: Fogli and Perri, 2009, Mendoza, Quadrini and Rios Rull, 2009, Gourinchas and Jeanne, 2009, Sandri, 2009
Additional material: Problem set 4
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