International Economics-II

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

        Course Objectives:

 

     The objectives of this course are -

 

  1. To introduce the students to 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 make them understand the role of various international monetary and trade organizations.

 

 

Course Outcomes (COs):

Course

 Outcome (at course level)

Learning and teaching strategies

Assessment Strategies 

Paper Code

Paper Title

ECO 413

International Economics-II

CO53: Understand the causes and measures to correct balance of payments disequilibrium.

CO54: Comprehend the concept of devaluation and its approaches.

CO55: Acquire knowledge of exchange rate theories, exchange control mechanism and foreign exchange markets.

CO56: Analyze the role of IMF, World Bank and WTO

Approach in teaching: Interactive Lectures, Discussion,  Case studies.

 

Learning activities for the students:

Presentations, Assignments and Group discussions.

Class activity, Assignments and  Semester end examinations.

 

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.L., International Economics, Prentice Hall, Upper Saddle River, N.J.
  2. Vaish, M.C. & S. Singh, International Economics.
  3. Cherunilam Francis, International Economics, Tata McGraw Hill Education Private Ltd, New Delhi
  4. Kindleberger, C.P., International Economics, R.D. Iruim, Homewood.
  5. Sodersten, B.O., International Economics, McMillan Press Ltd. London.
  6. Chacholiades, M., International Trade- Theory & Policy, McGraw Hill, Kogabusha, Japan.
Academic Session: 
2020-21
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