The aim:
1. Provide an understanding of the fundamental concepts of international finance.
2. Help students to understand how international financial markets work.
3. Prepare students to understand the rules of international capital flows.

Acquired knowledge:
1. Students will have a knowledge about determinants of balance of payments and exchange rates.
2. Students will know and understand how international financial markets work.
3. Students will be familiar with international capital flows.

Acquired skills:
1. Students will be able to articulate determinants of balance of payments and exchange rates.
2. Students will be able to analyse international financial markets.
3. Students will be able to articulate determinants of international capital flows.

Acquired social skills:
1. Students will be better able to understand exchange rates and why currency values fluctuate.
2. Students will be able to assess the benefits resulting from different exchange rate regimes.

Course contents:
1. The Mundell-Fleming model and effectiveness of monetary and fiscal policy. Components and determinants of balance of payments. Equilibrium, disequilibrium and adjustment in balance of payments.
2. International parity concepts, purchasing power parity, Fisher effect, international Fisher effect, interest rate parity. Determination of exchange rates. Interest rate effect on exchange rate, inflation rate effect on exchange rate. Exchange rate regimes (hard pegs, soft pegs, floating arrangements).
3. International currencies and global exchange reserves. Foreign exchange markets. Evolution of international monetary systems (gold standard, the Bretton Woods system, the post Bretton Woods system).
4. Criteria, costs and benefits of optimum currency areas. Evolution of the theory of optimum currency area. International capital flows. Regulations over international capital flows.
5. External debt – causes and effects. External debt in developing economies. Financial programming of IMF. Emerging markets, capital flows and capital controls. Crises episodes of advanced and emerging market economies.

Recommended reading: 
1. International Economics: Theory and Policy, Krugman P., Obstfeld M., Addison-Wesley- Longman. 2005.

Additional reading: 
1. The World Bank Revised Minimum Standard Model: Concepts and limitations, Nowak W., Ekonomia – Wroclaw Economic Review 19(2), 37-48. 2013.
2. The Effect of Stabilization Programmes on Economic Growth, Nowak W., Nierówności Społeczne a Wzrost Gospodarczy, 31, 27-34. 2013.
3. Development of the Polak Model, Nowak W., Wroclaw Review of Law, Administration & Economics [online], vol. 2 (1), 28-34. 2012.
4. The Macroeconomic Impact of Foreign Assistance, Nowak W., In: J.T. Karlovitz (ed.), Economics Questions, Issues and Problems, International Research Institute, Komárno, Slovakia, 233-239 . 2014.