Special Topics in International Finance

Special Topics in International Finance


Josef Taušer from VŠE in Prague (CZ).


Josef Taušer  Vysoká škola ekonomická v Praze
W. Churchill square 4
13067 Prague 3
Czech Republic


The student should have taken a course in intermediate macroeconomic and microeconomic theory at the undergraduate level.

Lecture topics

The lecture topics are:

  1. Simple Monetary Policy Strategies in Open Economies: the AS-AD Framework
  2. Monetary Policy in the Canonical New Keynesian Model
  3. An Expanded New Keynesian Open Economy Model
  4. Monetary Policy in a Common Currency Area
  5. The UIP Puzzle and Monetary Policy: Is There a Connection?
  6. The UIP Puzzle from the Perspective of Financial Economics
  7. Currency Crises: First Generation Model and Second Generation Model
  8. Financial Crises

Course contents

This course surveys a few key topics in the literature on monetary and financial economics in open economies. The initial focus of the course is on the conduct of monetary policy in open economies. Following this, we turn our attention to the Uncovered Interest Rate puzzle. A discussion of crisis episodes is meant to highlight the vulnerability of financial markets in both emerging and advanced countries in recent years.

This is a lectures-based course. The readings are drawn from the literature.

The second edition of this text is being written. Students will be provided with hand-outs that are drawn from new chapters in the second edition.

Core reading

A basic reference text for the discussion of monetary policy in the New Keynesian model is Froyen and Guender, Optimal Monetary Policy under Uncertainty, Edwin Elgar, Cheltenham, UK, 2008 (paperback). Available from online booksellers (Amazon.com, etc. $59).

Learning outcomes

This course aims at

  • showing how thought on monetary policy has evolved over the past 20 years
  • demonstrating the advantages and disadvantage of various monetary policy strategies
  • highlighting the difference between the conduct of monetary policy in open as opposed to closed economies
  • providing an overview of important topics in monetary and financial theory in the context of the recent financial crises
  • highlighting the crucial role played by financial markets in transmitting monetary impulses to the real sector of the economy


The course is taught over several weeks.


Students are evaluated through a written exam of three hours that assesses all the relevant learning outcomes.