COURSE INFORMATION
Course Title: OPEN ECONOMY: THEORY AND APPLICATION
Code Course Type Regular Semester Theory Practice Lab Credits ECTS
ECO 803 C 1 3 0 0 3 10
Lecturer and Office Hours: Güngör Turan 17.00-18.00 Wednesdays
Second Lecturer(s): NA
Teaching Assistant(s) and Office Hours: NA
Language: English
Compulsory/Elective: Elective
Classroom and Meeting Time: 18.00-20.45 on Wednesdays regularly
Course Description: This course focuses on comparison of traditional models such as Mundell-Fleming-Dornbusch model to more recent approaches often referred to as the "New" Open-Economy Macroeconomics. The basic of New models are imperfect competition in labor and/or product markets, nominal rigidities, and optimal price-setting behaviors leading to time-varying markups. The models presented here focus on optimal monetary policies in open economies, exchange rate regimes, and the gains from international coordination.
Course Objectives: This course is particularly emphasizes the international dimension of macroeconomics. The general perspective is that of developing countries and other small open economies, defined as those for whom the terms of trade are determined on world markets and for whom foreign income, inflation and interest rates can also be taken as given. The focus is on monetary, fiscal, and exchange rate policy, and on the determination of the current account balance, national income, and inflation. Models of devaluation include those where the price of internationally traded goods in terms of non-traded goods is central. A major overall theme is the implications of increased integration of global financial markets. Another is countries’ choice of monetary regime, especially the degree of exchange rate flexibility.
COURSE OUTLINE
Week Topics
1 Introduction, content, scope of the course and teaching methodology, and overview of macroeconomics
2 Open Macroeconomics: Economic growth and business cycle
3 Journal article review: Inflation Targeting and Exchange Rate Pass-Through: The Turkish Experience; Is growth pro-poor in the Balkan region?
4 Journal article review: Are international monetary programs effective?; Control of inflation of the road to the European Monetary Union-The case of Slovenia
5 Journal article review: Monetary policy in Bosnia and Herzegovina under the currency board regime; Monetary policy rules and inflation processes in open emerging economies, evidence from the twelve new EU members
6 Journal article review: The economic effects of Croatia's accession to the European Union; Inflation targeting and exchange rate regimes in Serbia and selected transition economies
7 Journal article review: Institutional determinants of sectoral FDI in Eastern European and Central Asian countries, the role of investment climate and democracy; Is inflation targeting effective? Monetary transmission in Poland, Czech Republic, Slovakia and Hungary
8 Journal article review: Interconnection of interest rate, price level, money supply and real GDP: The case of the Czech Republic; The role of financial development in growth and investment
9 Preparing a paper: title, abstract, introduction, literature review, empirical research: model, methodology, data, data specification, application, results, discussion, conclusions and references, annex
10 Preparing a paper: empirical application using E Views 7
11 Submitting a paper for an int conf
12 Publishing a paper in an indexed journal-1
13 Publishing a paper in an indexed journal-2
14 Publishing a paper in an indexed journal-3
Prerequisite(s):
Textbook: Mankiw, G., Macroeconomics, e.g., 8th ed. (Worth: NY), 2013. Maurice Obstfeld and Kenneth Rogoff, Foundations of International Economics (MIT Press, 1996).
Other References: Kosta Josifidis, Jean-Pierre Allegret, and Emilija Beker Pucar, Inflation Targeting and Exchange Rate Regimes in Serbia and Selected Transition Economies; Eastern European Economics, vol. 49, no. 4, July–August 2011, pp. 88–105.DOI 10.2753/EEE0012-8775490405. Nadia Doytch and Mesut Eren, Institutional Determinants of Sectoral FDI in Eastern European and Central Asian Countries: The Role of Investment Climate and Democracy,Emerging Markets Finance & Trade / November–December 2012, Vol. 48, Supplement No. 4, pp. 14–32. DOI: 10.2753/REE1540-496X4806S402. Jalal El Ouardighi and Rabija Somun-Kapetanovic, Is Growth Pro-Poor in the Balkan Region?, Eastern European Economics vol. 48, no. 3, May–June 2010, pp. 9–21. DOI 10.2753/EEE0012-8775480301. Hakan Kara and Fethi Öğünç, Inflation Targeting and Exchange Rate Pass-Through: The Turkish Experience, Emerging Markets Finance & Trade, Vol. 44, No. 6, Special Issue on Inflation TargetingAround the Globe: The Experience of Advanced and Emerging Market Economics (Nov. - Dec.,2008), pp. 52-66. Dejan Krušec, Is Inflation Targeting Effective? Monetary Transmission in Poland, the Czech Republic, Slovakia, and Hungary;Eastern European Economics, vol. 49, no. 1, January–February 2011, pp. 52–71. DOI 10.2753/EEE0012-8775490104 Borek Vašícek, Monetary Policy Rules and Inflation Processes in Open Emerging Economies Evidence from Twelve New EU Members; Eastern European Economics vol. 48, no. 4, July–August 2010, pp. 36–58. DOI 10.2753/EEE0012-8775480402. Arjan Lejour, Andrea Mervar, and Gerard Verweij, The Economic Effects of Croatia’s Accession to the European Union; Eastern European Economics, vol. 47, no. 6,zNovember–December 2009, pp. 60–83. DOI 10.2753/EEE0012-8775470604. Tomas Urbanovsky, Interconnection of interest rate, price level, money supply and real GDP, the case of Czech, Procedia - Social and Behavioral Sciences 220 ( 2016 ) 531 – 540. Jess Benhabib and Mark M. Spiegel, The Role of Financial Development in Growth and Investment; Journal of Economic Growth, Vol. 5, No. 4 (Dec., 2000), pp. 341-360.
Laboratory Work: Computer Labs
Computer Usage: E-Views software program
Others: No
COURSE LEARNING OUTCOMES
1 Improving students' theoretical skills on advanced and applied macro economics, int economics and monetary economics
2 Improvising students' empirical skills on advanced and applied macro economics, int economics and monetary economics
3 Improvising students' software using skills on advanced and applied macro economics, int economics and monetary economics
4 Improvising students' math modelling, statistics and econometric skills on advanced and applied macro economics, int economics and monetary econo
5 Improvising students' research skills on advanced and applied macro economics, int economics and monetary economics
COURSE CONTRIBUTION TO... PROGRAM COMPETENCIES
(Blank : no contribution, 1: least contribution ... 5: highest contribution)
No Program Competencies Cont.
PhD ECO BAF Program
1 The students are gained the ability to look at the problems of daily life from a broader perspective. They gain the needed skills not only to understand economic problems but also to construct a model and defend in meaningful way. 4
2 To comprehend the interaction between economics and related fields; to achieve original results by using expert knowledge in analysis, synthesis and evaluation of new and complex ideas. 5
3 To be able to obtain new knowledge in economics systematically and to acquire high level skills in research methods in economics. 5
4 To be able to develop new methods that make a contribution to science or to be able to apply existing techniques to an original research idea. 5
5 They have ability to use mathematical and statistical methods in international economics. 5
6 They know how to use computer programs in both daily office usage and statistical data evaluations in economics department. 5
7 They have necessary economics skills that needed in private and public sector. 3
8 They are intended to be specialist in one of departmental fields that they choose from the list of general economics, finance economics, public finance, corporate finance, finance management, international finance markets and institutions, banking and central banking, international finance and banking, money and banking, international trade and banking. 4
9 They have ability to utilize fundamental economic theories and tools to solve economic problems in international level. 5
10 They are aware of the fact that international economics is a social science and they respect the social perspectives and social values of the society’s ethics. 3
COURSE EVALUATION METHOD
Method Quantity Percentage
Presentation
1
50
Term Paper
1
50
Total Percent: 100%
ECTS (ALLOCATED BASED ON STUDENT WORKLOAD)
Activities Quantity Duration(Hours) Total Workload(Hours)
Course Duration (Including the exam week: 16x Total course hours) 16 3 48
Hours for off-the-classroom study (Pre-study, practice) 16 3 48
Mid-terms 0
Assignments 13 2 26
Final examination 16 4 64
Other 16 4 64
Total Work Load:
250
Total Work Load/25(h):
10
ECTS Credit of the Course:
10