International Macroeconomics

Module code: EC3067
Module co-ordinator: Dr Tanya Oliveira

Does it matter whether a country has a fixed or a flexible exchange rate, or whether it chooses to allow inflows and outflows of financial capital?

Yes, it matters a lot. For example, a country choosing a fixed exchange rate and free movement of financial capital has to give up its monetary independence. But what are the benefits of a fixed exchange rate relative to the cost of lost monetary independence? What happens if a country fixes its exchange rate at an unsustainable level? Will this inevitably lead to a financial crisis, such as those in Latin America in the 1980s or the Far East in the 1990s? How did the recent financial crisis in the USA spread to the rest of the World?

Globalisation and the increased size of international capital markets mean that international finance is an evolving subject that can have substantial impacts upon the welfare of citizens across the globe.

Topics covered

  • Balance of payments
  • Exchange rate determination including purchasing power parity
  • The international monetary system
  • Economics of default and the resolution of debt crises


  • 20 one-hour lectures
  • 5 one-hour seminars


  • Exam, 90 minutes (80%)
  • Coursework (20%)