International Economics-II

Paper Code: 
ECO 413
Credits: 
3
Contact Hours: 
45.00
Max. Marks: 
100.00
Objective: 

1.      To analyze the importance of foreign exchange market, transactions involving foreign exchange and theories for determination of exchange rate.

2.      To acquaint the students with the meaning and components of balance of payments and devaluation.

3.      To examine the role of various international monetary and trade organizations.

9.00
Unit I: 
Balance of Payments

Balance of Payments - Components;Disequilibrium in Balance of Payments - Causes;Measures to correct disequilibrium in the Balance of Payments.

9.00
Unit II: 
Devaluation

Devaluation-Elasticities Approach and Income Absorption Approach;The J curve effect;Foreign Trade Multiplier.

9.00
Unit III: 
Foreign Exchange Market and Exchange Rates

Foreign Exchange Market – functions;Foreign Exchange Rate – meaning and determination of equilibrium exchange rate;Concepts of Arbitrage, Spot and Forward Rates; Futures; Options; Foreign Exchange Risks; Hedging and Speculation; Exchange Rate Regimes – Fixed, Flexible, Managed Floating

9.00
Unit IV: 
Exchange Rate Theories and Exchange Control

Exchange Rate Theories - Mint Parity Theory, Purchasing Power Parity Theory;Foreign Exchange Control – Meaning, Objectives and Methods;Foreign Exchange Management Act (FEMA).

9.00
Unit V: 
International Economic Organizations

International Monetary Fund (IMF);World Bank;Asian Development Bank;GATT and WTO.

Essential Readings: 

1.      Salvatore, D., International Economics: Trade and Finance, Wiley; Eleventh edition 2014.

2.      Cherunilam, Francis, International Economics, Tata McGraw-Hill Publishing Company Limited, New Delhi, 2001. 

References: 

1.      Appleyard, Dennis R., International Economics, McGraw Hill Education (India) , Chennai,  8th edition, 2016.

2.      Rana K.C and Verma K.N., International Economics, Vishal Publishing Company, latest edition.

Academic Session: 
2022-23
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