040066 KU Topics in International Economics (MA) (2023W)

[The reading list is on the “ambitious” side. The topics we may end up not covering in class due to lack of time will not enter the exams.]

1. Flexible exchange rates

Corsetti, G., & P. Pesenti (2001): “Welfare and Macroeconomic Interdependence,” Quarterly Journal of Economics, 116(2), pp. 421-445

Corsetti, G., & P. Pesenti (2009): “The Simple Geometry of Transmission and Stabilization in Closed and Open Economies,” in R. Clarida & F. Giavazzi (eds.) NBER International Seminar on Macroeconomics 2007, University of Chicago Press, pp. 65–129

2. Fixed exchange rates

Arellano, C. (2008): “Default Risk and Income Fluctuations in Emerging Economies,” American Economic Review, 98(3), pp. 690-712

Na, S., S. Schmitt-Grohé, M. Uribe & V. Yue (2018): “The Twin Ds: Optimal Default and Devaluation,” American Economic Review, 108(7), pp. 1773-1819

Schmitt-Grohé, S., & M. Uribe (2016): “Downward Nominal Wage Rigidity, Currency Pegs, and Involuntary Unemployment,” Journal of Political Economy, 124(5), pp. 1466-1514

3. Monetary unions

Aguiar, M., M. Amador, E. Farhi & G. Gopinath (2015): “Coordination and Crisis in Monetary Unions,” Quarterly Journal of Economics, 130(4), pp. 1727-1779

Broner, F., A. Martín & J. Ventura (2021): “On Public Spending and Economic Unions,” IMF Economic Review, 69(1), pp. 122-154

Farhi, E., G. Gopinath & O. Itskhoki (2014): “Fiscal Devaluations,” Review of Economic Studies, 81(2), pp. 725-760

Farhi, E., & I. Werning (2017): “Fiscal Unions,” American Economic Review, 107(12), pp. 3788- 3834

Fornaro, L. (2022): “A Theory of Monetary Union and Financial Integration,” Review of Economic Studies, 89(4), pp. 1911-1947

Gourinchas, P.O., P. Martin & T.E. Messer (2020): “The Economics of Sovereign Debt, Bailouts and the Eurozone Crisis,” NBER WP 27403

4. The international monetary system

Farhi, E., & M. Maggiori (2018): “A Model of the International Monetary System,” Quarterly Journal of Economics, 133(1), pp. 295-355

Gopinath, G. & O. Itskhoki (2021): “Dominant Currency Paradigm: A Review,” in G. Gopinath, E. Helpman and K. Rogoff (eds.), Handbook of International Economics, 5

Gopinath, G., & J.C. Stein (2021): “Banking, Trade, and the Making of a Dominant Currency,” Quarterly Journal of Economics, 136(2), pp. 783-830

Ilzetzki, E., C.M. Reinhart & K.S. Rogoff (2021): “Rethinking Exchange Rate Regimes,” NBER WP 29347

5. Global imbalances

Caballero, R.J., E. Farhi, & P.O. Gourinchas (2008): “An Equilibrium Model of Global Imbalances and Low Interest Rates,” American Economic Review, 98(1), pp. 358-393

Caballero, R.J., E. Farhi, & P.O. Gourinchas (2017): “The Safe Assets Shortage Conundrum,” Journal of Economic Perspectives, 31(3), pp. 29-46

Caballero, R.J., E. Farhi, & P.O. Gourinchas (2021): “Global Imbalances and Currency Wars at the Zero Lower Bound,” Review of Economic Studies, 88(6), pp. 2570-2621

6. Exchange rate dynamics

Gabaix, X., & M. Maggiori (2015): “International Liquidity and Exchange Rate Dynamics,” Quarterly Journal of Economics, 130(3), pp. 1369-1420

Itskhoki, O. (2020): “The Story of the Real Exchange Rate,” Annual Review of Economics, 13, pp. 423-455

Itskhoki, O. & D. Mukhin (2021): “Exchange Rate Disconnect in General Equilibrium,” Journal of Political Economy, 129(8), pp. 2183-2232

Itskhoki, O. & D. Mukhin (2021): “Mussa Puzzle Redux,” NBER WP 28950

Maggiori, M. (2021): “International Macroeconomics with Imperfect Financial Markets,” in G. Gopinath, E. Helpman and K. Rogoff (eds.), Handbook of International Economics, 5