Rome, Italy - Course Descriptions - International Economics

Course Information

Contact Hours and Credits

Availability

Summary

The primary objective of the course is to illustrate and explain the driving forces behind the financial and commercial decisions of multinational enterprises.

Full Description

Objectives

The primary objective of the course is to illustrate and explain the driving forces behind the financial and commercial decisions of multinational enterprises. Decision-making in an international environment requires an understanding of foreign exchange markets, of the causes for currency fluctuations and of the ways a firm can protect itself in a fairly volatile environment. The first part of the course concentrates on the theory and policy of international trade with the clear objective of explaining the reality and characteristics of the international environment in which multinational companies operate. The second part concentrates on the operation, mechanics and structure of the international financial system, emphasizing its private and public institutional foreign exchange markets, capital flows, speculation, payment tools and alternative foreign investments.

Syllabus

• Introduction. The importance of international trade and finance for multinational enterprises. The origins of international trade.
• Comparative advantage and gains from trade.
• International trade patterns and income distribution; factor endowments.
• International factor movements.
• Protectionism: tariffs and non-tariff barriers. National welfare: the political economy of protection.
• Trade controls in practice. Preferential trade arrangements.
• Foreign exchange markets.
• The balance of payments accounts.
• Flexible and fixed exchange rate systems. Past and present international monetary arrangements.
• Forward-looking market instruments. Exchange rates, interest rates and interest parity.
• International investment and capital flows. Purchasing power parity doctrine. Determinants of the balance of trade and payments.
• Exchange rate determination. Import and export financing. Financial management of the multinational firm. The international money market.

Recommended Text(s)

Given the intensive nature of the course, there is no required textbook. Students are simply required to attend all classes and take extensive notes. They are also strongly encouraged to read the Financial Times and The Economist before, during and after the course. Copies of selected articles will be distributed in class to be used as case studies.

Other Information

Students are required to keep abreast of current international marketing issues by reading the Economist and BusinessWeek, on top of the Financial Times and Wall Street Journal Europe. Practically every week, the instructor will send via e-mail, or post on his personal website, selected news items taken from the above-mentioned media sources.

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