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International Economics-II
Paper Code:
ECO 413
Credits:
4
Contact Hours:
60.00
Objective:
To acquaint the students with the fundamentals of foreign exchange market and balance of payments.
12.00
Unit I:
Balance of Payments
- Balance of Payments - Components;
- Disequilibrium in Balance of Payments - Causes;
- Measures to correct disequilibrium in the Balance of Payments;
12.00
Unit II:
Devaluation
- Devaluation-Elasticities Approach and Income Absorption Approach;
- The J curve effect;
- Foreign Trade Multiplier.
12.00
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;
12.00
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).
12.00
Unit V:
International Economic Organisations
- 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:
