This course contains two parts. The first part covers the various dimensions of the world economy and the basic trade theories. Major topics include mercantilist view on trade, comparative advantage (the Ricardo and the Heckscher-Ohlin models), gains from free trade, and the welfare effect of trade on different groups of people in the economy. The second part covers government policies on trade - tariffs and non-tariff barriers - and their impact on trade and economic welfare. The role of the World Trade Organization (WTO) is also introduced. Major topics include arguments for and against trade protection, trade restriction policies, economic effects of trade restrictions, economic integration, and current trade issues the WTO is facing.
Balance of Payments and International Monetary System
The international monetary system is an important part of the international financial environment in which multinational companies operate. It refers to the exchange rate regimes and how balance of payments adjusts in these regimes. Historical evolution of the international monetary system and the current arrangements are discussed in this session. Major topics include the balance of payments, the gold standard, the Bretton Woods system, basic characteristics of fixed and floating exchange rate regimes, the roles of major international financial institutions, and current issues in the international monetary system.
Foreign Exchange Markets and Exchange Rates
The foreign exchange market is the largest financial market in the world. The basic functions of the foreign exchange market and the fundamentals of exchange rates are covered in this session. Major topics include exchange rate quotations, the spot and forward exchange rates, the forward premium, interest rate parity, and purchasing power parity.
Currency Derivative and Hedging Strategies
Given the fluctuations of exchange rates, businesses face exchange rate exposure and risk. Currency derivatives can be used to hedge exchange rate risks. Currency derivatives such as currency forwards, futures, options, and swaps are introduced in this course. Emphasis will be made on exchange rate risk management strategies employing these derivative instruments.
Instructor: Dr. Jiawen Yang, Professor of International Business and International Affairs, The George Washington University
Dr. Yang received his PhD in International Business from New York University, MA in international economics and BA both from the University of International Business and Economics, Beijing, China. He joined the George Washington University in 1994 and has been teaching courses in international trade and finance, emerging markets, and China's business environment. He has also taught at New York University, Vanderbilt University, Beijing University, and the University of International Business and Economics in China. His current research focuses on exchange rate pass-through, international capital flows and their impact on emerging markets, international business strategies for small and medium-sized firms, and the Chinese economy. His research has appeared in The Review of Economics and Statistics, Review of International Economics, International Review of Economics & Finance, The Quarterly Review of Economics and Finance, The International Trade Journal, China Economic Review, World Economy, Issues & Studies and other academic journals. Dr. Yang is also author of many book chapters and coauthor of two books on economic sanctions.
