International Finance

ECON A316 International Finance is an elective course in the programme offered by Hong Kong Metropolitan University leading to the degree of Bachelor in Social Sciences with Honours in Economics.

ECON A316 is a higher level economics course and aims to give students a broad and systematic overview of both the theory and practice of major issues in international finance. The course is a 5-credit one and the duration is one semester. There is no formal prerequisite for this course but it would be easier for students if they had taken ECON A232 Introduction to Macroeconomics.

By now you will have completed other Hong Kong Metropolitan University courses. You are, therefore, well aware of the study skills required for distance learning, have developed your own study schedules and methods and are familiar with the organization of HKMU courses. Even so, you should read this Course Guide thoroughly before proceeding to look at the study units or your textbooks. Some of the content will be familiar to you but much of the information is specific to ECON A316 International Finance. Please take time to read it.

The Course Guide tells you briefly about the course content and suggests ways for you to work your way through the material. It also provides some guidelines as to the amount of time you are likely to spend on each unit in order to complete the course successfully.

The Course Guide provides information on assignments, tutorials, and the examination. Please see the Presentation Schedule for information about the due dates for the submission of assignments.

You will probably wish to refer to this Course Guide throughout the course to help clarify important points about studying with HKMU, so keep it in a convenient place.

ECON A316 aims to give students a broad and systematic overview of both the theory and practice of major issues in international finance. It demonstrates how theoretical finance models can be applied to explain international financial relations. It also familiarizes students with theoretical and practical international financial policy issues.

Upon completion of this course, you should be able to:

1. Discuss national income accounting with special emphasis on the balance of payments and relate this to media discussions of trade and current account deficits.
2. Analyse international financial markets and their main instruments.
3. Examine the relationships between money, income and balance of payments.
4. Examine different exchange rate regimes, including the linked exchange rate system of Hong Kong.
5. Assess the importance of international policy coordination.
6. Discuss the roles of the International Monetary Fund (IMF) and the World Bank in international finance.
7. Analyse the East Asian financial crisis in the late 1990s and its related issues.

The following chart gives a general overview of the course structure.

Besides this Course Guide, your course materials consist of:

• five study units;
• a set textbook;
• supplementary readings;
• a Presentation Schedule;
• an Assignment File.

With the exception of the set textbook, which you must buy yourself, these materials are provided by HKMU.

Study units

You can see the titles of the five study units. Each study unit highlights the key points of the topic under study and explains the underlying economic theory. You will also find many short questions which test your understanding or enable you to practise applying some of the theory. At the end of each unit is a self-test which helps you to check your understanding of the key concepts. You are strongly advised to try to answer both the short questions and the self-test questions before looking at the feedback.

Readings

You may be instructed in the study units to read articles or other supplementary materials. These will be available online or provided as hard copies.

E-Library E-Reserve readings

You may be instructed to read articles in the E-Library E-Reserve. To read these items, go to the University's E-Library and click on 'E-Reserve'. Log in, click 'Accept/Agree' on the Copyright Restrictions page, fill in the 'Course Code' box, and click 'Search'.

Set textbook

The set textbook is:

Krugman, P R, Obstfeld, M and Melitz, M J (2018) International Economics: Theory and Policy, 11th edn, Pearson.

Presentation Schedule

The Presentation Schedule is included in the course materials. It gives the dates for completing assignments, and attending tutorials, day schools, and so on.

Assignment File

In the Assignment File, you will find two sets of assignments. For more information about the assignments and the assessment of the assignments, see the Course Assessment section below and the Assignment File.

There are two kinds of assessment: assignments and an examination.

Assignments

There are altogether two assignments. Each assignment contains a few questions. Each question may contain more than one part. You are advised to study the unit, especially the short questions and review questions and their answers, before attempting to solve the assignment problems. More specific instructions will be found in the Assignment File.

You are required to finish the assignments for tutors to mark. Fifty per cent of your final grade will depend on your assignments.

Final examination

At the end of the course, there will be a two-hour final examination. The examination will be comprehensive and contain many multi-part questions. You should not assume that the examination will concentrate on asking questions on a few topics and neglect some other topics when you prepare for the final examination.

Fifty per cent of your final grade will depend on your performance in the final examination.

Course marking scheme

Study units

Read each study unit carefully as it guides your learning. Each unit tells you what the unit covers, what textbook readings you are assigned and details about the assignments. You must read both the study units and the material from the textbook and readings. They are not alternatives. If additional readings are provided for the unit, you should read those as indicated.

Each study unit is organized into a number of sections. The introduction provides you with the concepts to be covered in the unit. The unit guides your learning, directs you to text readings and provides questions, activities and self-tests. Answers to the self-tests follow at the end of the unit. A summary gives a final review of the material covered.

My advice is to proceed slowly and make sure you understand line by line. Go through the short questions. Understand all the diagrams. Then you should try the self-test questions. Self-test questions are meant to be a little bit difficult. Do not get frustrated if you cannot answer all of them correctly. You can refer to the answers. But try to answer them before referring to the answers.

Checking understanding

The introduction in each unit helps you to determine the core theories, concepts, frameworks and tools contained in the readings. When you finish the unit, return to these key concepts and check that you have mastered them.

Keep a note of any difficulties you encounter as you progress through the materials and raise them with your tutor as soon as possible. Try to have specific questions for your tutor to answer and be specific about the material that you do not understand.

Tutors

Tutors are available to provide assistance not just during the formal tutorials. Your tutor is also available by telephone during selected hours. Do not hesitate to contact your tutor by telephone if you need help. The following might be some typical circumstances in which you would find help necessary. Contact your tutor if:

• You do not understand any part of the study units or the assigned readings.
• You have any difficulty with self-tests or practice exercises.
• You have a question or problem with assignments, or with your tutor’s comments on or grading of an assignment.

Tutorials

Twelve hours of tutorial support are provided. There will be six sessions of two hours each. You will be notified of the dates, times and location of the formal tutorials, together with the name, phone number and telephone tutoring hours of your tutor, as soon as you are allocated a tutorial group.

Tutorials are not lectures. They are designed to encourage group discussion and interaction. They provide you with an opportunity to discuss any problems you are having.