Course Syllabus
Obiettivi formativi
Il corso fornisce agli studenti gli strumenti teorici ed empirici necessari per comprendere alcuni temi selezionati di finanza internazionale. Particolare attenzione è dedicata alla globalizzazione finanziaria e ai flussi internazionali di capitale, al debito sovrano e al default, nonché al ruolo e all’efficacia del Fondo Monetario Internazionale nell’ambito dell’architettura finanziaria internazionale.
Al termine del corso, gli studenti dovranno aver conseguito i seguenti risultati di apprendimento.
Conoscenza e capacità di comprensione
Gli studenti acquisiranno conoscenza e comprensione:
delle principali teorie e regolarità empiriche relative ai flussi internazionali di capitale e alla globalizzazione finanziaria;
dei benefici, dei rischi e degli effetti distributivi dell’integrazione finanziaria;
delle determinanti e delle conseguenze dell’indebitamento e del default sovrano;
dei problemi di debt overhang, della struttura del debito, della ristrutturazione del debito e della riduzione del debito;
del funzionamento, dell’economia politica e dell’efficacia del Fondo Monetario Internazionale.
Capacità di applicare conoscenza e comprensione
Gli studenti saranno in grado di applicare gli strumenti teorici ed empirici introdotti durante il corso all’analisi dei principali problemi di finanza internazionale.
In particolare, saranno in grado di interpretare modelli economici, risultati empirici e interventi di politica economica relativi ai flussi di capitale, alle crisi del debito sovrano e ai programmi del Fondo Monetario Internazionale.
Attraverso il progetto econometrico, gli studenti svilupperanno inoltre la capacità di formulare una domanda di ricerca, applicare metodi empirici appropriati e interpretare l’evidenza ottenuta.
Autonomia di giudizio
Gli studenti svilupperanno la capacità di valutare criticamente le argomentazioni teoriche e i contributi empirici nell’ambito della finanza internazionale.
Saranno in grado di valutare le ipotesi e i limiti dei diversi modelli, la credibilità delle strategie di identificazione empirica e la misura in cui l’evidenza disponibile sostiene determinate conclusioni di politica economica.
Abilità comunicative
Gli studenti saranno in grado di illustrare e discutere i principali meccanismi teorici e risultati empirici affrontati durante il corso, utilizzando una terminologia economica appropriata.
Svilupperanno inoltre la capacità di presentare una domanda di ricerca empirica, descrivere la metodologia utilizzata e comunicare in modo chiaro e accurato i risultati ottenuti e i limiti dell’analisi.
Capacità di apprendimento
Gli studenti acquisiranno le competenze analitiche e metodologiche necessarie per leggere autonomamente articoli scientifici, confrontare approcci alternativi alla stessa domanda di ricerca e approfondire la letteratura di finanza internazionale.
Saranno inoltre in grado di individuare dati ed evidenze pertinenti per l’analisi di nuovi fenomeni finanziari internazionali.
Contenuti sintetici
I: FINANCIAL GLOBALIZATION AND ITS EFFECTS
i) Basic facts and theories
ii) The Effects of Financial Globalization. Capital Flows and Financial Frictions
II: SOVEREIGN DEBT
i) Introduction
ii) Incentives: Sanctions and reputation, costs of default
iii) Distortions: Debt overhang; Debt structure: maturity and foreign currency composition
iv) Remedies: Debt Restructuring And Debt Relief
III: INTERNATIONAL FINANCIAL ARCHITECTURE AND THE ROLE OF THE IMF
i) Introduction
ii) Participation
iii) Implementation and Effects
Programma esteso
INTERNATIONAL FINANCIAL MARKETS
I: FINANCIAL GLOBALIZATION AND ITS EFFECTS
i) Basic facts and theories
Alfaro Laura & Sebnem Kalemli-Ozcan & Vadym Volosovych, 2008. Why Doesn't Capital Flow from Rich to Poor Countries? An Empirical Investigation, The Review of Economics and Statistics, 90(2): 347-368
Lucas, Robert E. Jr., 1990, “Why doesn’t capital flow from rich to poor countries?” The American Economic Review , 80(2): 92–96.
Obstfeld, Maurice and Alan M. Taylor, (2017) International Monetary Relations: Taking Finance Seriously, Journal of Economic Perspectives—Volume 31, Number 3—Summer 2017—Pages 3–28
Reinhart, Carmen M. and Kenneth Rogoff, 2004, Serial Default And The “Paradox” of rich to poor capital flows, American Economic Review, 94.
Reinhart C.M. and Kenneth S. Rogoff (2009) This Time It’s Different: Eight Centuries of Financial Folly. (Princeton: Princeton University Press, September 2009)
ii) The Effects of Financial Globalization. Capital Flows and Financial Frictions
Furceri, Davide, Prakash Loungani and Jonathan D. Ostry, (2017) The Aggregate And Distributional Effects Of Financial Globalization: Evidence From Macro And Sectoral Data, IMF WP
Kose, A., E. Prasad, K. Rogoff, and S. Wei, (2009) “Financial globalization: A reappraisal,” IMF Staff papers
Prasad E. and R. Rajan (2008) “Pragmatic Approach to Capital Account Liberalization” Journal of Economic Perspectives—Volume 22, Number 3—Summer 2008—Pages 149–172
Rajan, Raghuram G. and Luigi Zingales (1998), “Financial Dependence and Growth.” American Economic Review, Vol. 88, No. 3, pp. 559-586
II: SOVEREIGN DEBT
i) Introduction
Panizza U., Sturzenegger F. and J. Zettelmeyer (2009) The Economics and Law of Sovereign Debt and Default. Journal of Economic Literature 47(3), 1-47.
ii) Incentives: Sanctions and reputation, costs of default
Borensztein E. and U. Panizza (2009) The costs of sovereign default. IMF Staff Papers 56 (4), 683—741
Cruces J. J. and C. Trebesch (2013) Sovereign Defaults: The Price of Haircuts. American Economic Journal: Macroeconomics 5, 85-117
Levy Yeyati E. and U. Panizza (2011) The Elusive Costs of Sovereign Defaults. Journal of Development Economics 94, 95-105.
Reinhart C. M. and K.S. Rogoff (2009) This Time is Different: Eight Centuries of Financial Follies. Princeton University Press.
Trebesch C. and M. Zabel (2017). The Output Costs of Hard and Soft Sovereign Default. European Economic Review. 92: 416-432
iii) Distortions: Debt overhang; Debt structure: maturity and foreign currency composition
Gelos, G., R. Sahay, and G. Sandleris, (2011) “Sovereign borrowing by developing countries: What determines market access?” Journal of International Economics, 82(2), 243-254.
Hausmann R. and U. Panizza (2003) “On the determinants of Original Sin: an empirical investigation.” Journal of International Money and Finance, 22, pp. 957-990.
Krugman P. (1988) “Financing versus forgiving a debt overhang.” Journal of development economics, 29:3, pp. 253-68.
Presbitero Andrea and Ugo Panizza, (2013), Public debt and economic growth in advanced economies: A survey", Swiss Journal of Economics and Statistics, 149(II): 175-204
Reinhart, Carmen M and Kenneth S Rogoff (2010), “Growth in a Time of Debt” American Economic Review, May
Herndon Thomas, Michael Ash and Robert Pollin (2013) Does High Public Debt Consistently Stiffle Economic Growth? A Critique of Reinhart and Rogoff. Forthcoming in Cambridge Journal of Economics
iv) Remedies: Debt Restructuring And Debt Relief
Arslanalp S., P.B. Henry (2005) “Is debt relief efficient?” Journal of finance, 62: 2, pp. 1017-051.
Marchesi, S., J.P. Thomas (1999) “IMF conditionality as a screening device” The Economic Journal, 1999, 109, 111-125
Marchesi, S. (2003). Adoption of an IMF programme and debt rescheduling. An empirical analysis. Journal of Development Economics, 70(2), 403–423.
Reinhart, C. M. and C. Trebesch (2016). Sovereign Debt Relief and its Aftermath. Journal of the European Economic Association, 14(1): 215-251
III: INTERNATIONAL FINANCIAL ARCHITECTURE AND THE ROLE OF THE IMF
Introduction
Reinhart Carmen M and Christoph Trebesch, 2016, The International Monetary Fund: 70 Years of Reinvention, Journal of Economic Perspectives, Symposium: The Bretton Woods Institutions. Volume 30: 3-28.
International Monetary Fund, “About the IMF,” Available on-line:
i) Participation
Dreher, A., J.E. Sturm, and J.R. Vreeland (2009) “Global Horse Trading: IMF loans for votes in the United Nations Security Council.” European Economic Review 53: 742-757.
Dreher, A, and N.M., Jensen (2007) “Independent Actor or Agent? An Empirical Analysis of the Impact of U.S. Interests on IMF Conditions.” Journal of Law and Economics, 50, 105-124.
Dreher, A., S. Marchesi and J.R. Vreeland (2008) “The political economy of IMF forecasts,” Public Choice, 137, 145–171
Marchesi, S., and L. Sabani (2007a). IMF concern for reputation and conditional lending failure: Theory and empirics. Journal of Development Economics, 84, 640–666.
ii) Implementation and Effects
Barro, R.J. and Lee, J.W. (2005) “IMF-programs: Who is chosen and what are the effects?” Journal of Monetary Economics, 52, 1245–1269.
Marchesi S. and E. Sirtori (2011) “Is two better than one? Effects on growth of Bank-Fund interaction”, Review of International Organization, 2011, Volume 6, pp 287–306
Marchesi, S., L. Sabani and A. Dreher (2011) “Read my lips: the role of information transmission in multilateral reform design”, Journal of International Economics, 2011, Volume 84, pp. 86-98
Prerequisiti
È richiesta una buona conoscenza dei concetti fondamentali di microeconomia e macroeconomia, nonché una familiarità con i principali metodi econometrici di base.
Metodi didattici
Il corso combina lezioni in presenza con la realizzazione di progetti econometrici da parte degli studenti.
Le lezioni presentano i principali modelli teorici e contributi empirici della letteratura di finanza internazionale. Particolare attenzione è dedicata all’interpretazione e alla discussione critica degli articoli teorici ed empirici.
I progetti econometrici consentono agli studenti di applicare gli strumenti analitici ed empirici introdotti durante il corso a una specifica domanda di ricerca nell’ambito della finanza internazionale.
Modalità di verifica dell'apprendimento
La valutazione si basa su un esame scritto finale della durata di 90 minuti e sulla valutazione dei progetti econometrici realizzati dagli studenti.
L’esame scritto consiste in domande aperte relative agli argomenti teorici ed empirici affrontati durante il corso. L’esame valuta:
la conoscenza e la comprensione delle principali teorie e dei principali risultati empirici;
la capacità di applicare i concetti economici all’analisi di problemi di finanza internazionale;
la capacità di valutare criticamente argomentazioni teoriche, metodologie empiriche e implicazioni di politica economica;
la capacità di esporre gli argomenti economici in modo chiaro, accurato e utilizzando una terminologia appropriata.
Il progetto econometrico valuta la capacità degli studenti di formulare una domanda di ricerca rilevante, individuare e utilizzare dati appropriati, applicare metodi econometrici, interpretare i risultati e discutere criticamente i limiti dell’analisi.
Il voto finale è determinato sulla base della valutazione complessiva dell’esame scritto e del progetto econometrico.
Testi di riferimento
Non è previsto un unico manuale ufficiale. Il corso si basa su una selezione di articoli scientifici, capitoli di libro e ulteriori materiali didattici. Le letture obbligatorie e facoltative sono indicate nel programma dettagliato del corso e rese disponibili sulla piattaforma didattica.
Periodo di erogazione dell'insegnamento
Secondo semestre
Lingua di insegnamento
Inglese
Sustainable Development Goals
Learning objectives
Learning objectives
The course provides students with the theoretical and empirical tools required to understand selected topics in international finance. Particular attention is devoted to financial globalization and international capital flows, sovereign debt and default, and the role and effectiveness of the International Monetary Fund within the international financial architecture.
By the end of the course, students are expected to achieve the following learning outcomes.
Knowledge and understanding
Students will acquire knowledge and understanding of:
the main theories and empirical regularities concerning international capital flows and financial globalization;
the benefits, risks and distributional consequences of financial integration;
the determinants and consequences of sovereign borrowing and sovereign default;
debt overhang, debt structure, debt restructuring and debt relief;
the functioning, political economy and effectiveness of the International Monetary Fund.
Applying knowledge and understanding
Students will be able to apply the theoretical and empirical tools introduced during the course to the analysis of international financial issues. In particular, they will be able to interpret economic models, empirical findings and policy interventions concerning capital flows, sovereign debt crises and IMF programmes.
Through the econometric project, students will also develop the ability to formulate a research question, apply appropriate empirical methods and interpret the resulting evidence.
Making judgements
Students will develop the ability to critically evaluate theoretical arguments and empirical contributions in international finance. They will be able to assess the assumptions and limitations of alternative models, the credibility of empirical identification strategies and the extent to which the available evidence supports specific policy conclusions.
Communication skills
Students will be able to explain and discuss the main theoretical mechanisms and empirical findings covered in the course using appropriate economic terminology. They will also develop the ability to present an empirical research question, describe the methodology employed and communicate results and limitations clearly and accurately.
Learning skills
Students will acquire the analytical and methodological skills required to read academic papers independently, compare alternative approaches to the same research question and further explore the international finance literature. They will also be able to identify relevant data and evidence for the analysis of new international financial developments.
Contents
I: FINANCIAL GLOBALIZATION AND ITS EFFECTS
i) Basic facts and theories
ii) The Effects of Financial Globalization. Capital Flows and Financial Frictions
II: SOVEREIGN DEBT
i) Introduction
ii) Incentives: Sanctions and reputation, costs of default
iii) Distortions: Debt overhang; Debt structure: maturity and foreign currency composition
iv) Remedies: Debt Restructuring And Debt Relief
III: INTERNATIONAL FINANCIAL ARCHITECTURE AND THE ROLE OF THE IMF
i) Introduction
ii) Participation
iii) Implementation and Effects
Detailed program
INTERNATIONAL FINANCIAL MARKETS
I: FINANCIAL GLOBALIZATION AND ITS EFFECTS
i) Basic facts and theories
Alfaro Laura & Sebnem Kalemli-Ozcan & Vadym Volosovych, 2008. Why Doesn't Capital Flow from Rich to Poor Countries? An Empirical Investigation, The Review of Economics and Statistics, 90(2): 347-368
Lucas, Robert E. Jr., 1990, “Why doesn’t capital flow from rich to poor countries?” The American Economic Review , 80(2): 92–96.
Obstfeld, Maurice and Alan M. Taylor, (2017) International Monetary Relations: Taking Finance Seriously, Journal of Economic Perspectives—Volume 31, Number 3—Summer 2017—Pages 3–28
Reinhart, Carmen M. and Kenneth Rogoff, 2004, Serial Default And The “Paradox” of rich to poor capital flows, American Economic Review, 94.
Reinhart C.M. and Kenneth S. Rogoff (2009) This Time It’s Different: Eight Centuries of Financial Folly. (Princeton: Princeton University Press, September 2009)
ii) The Effects of Financial Globalization. Capital Flows and Financial Frictions
Furceri, Davide, Prakash Loungani and Jonathan D. Ostry, (2017) The Aggregate And Distributional Effects Of Financial Globalization: Evidence From Macro And Sectoral Data, IMF WP
Kose, A., E. Prasad, K. Rogoff, and S. Wei, (2009) “Financial globalization: A reappraisal,” IMF Staff papers
Prasad E. and R. Rajan (2008) “Pragmatic Approach to Capital Account Liberalization” Journal of Economic Perspectives—Volume 22, Number 3—Summer 2008—Pages 149–172
Rajan, Raghuram G. and Luigi Zingales (1998), “Financial Dependence and Growth.” American Economic Review, Vol. 88, No. 3, pp. 559-586
II: SOVEREIGN DEBT
i) Introduction
Panizza U., Sturzenegger F. and J. Zettelmeyer (2009) The Economics and Law of Sovereign Debt and Default. Journal of Economic Literature 47(3), 1-47.
ii) Incentives: Sanctions and reputation, costs of default
Borensztein E. and U. Panizza (2009) The costs of sovereign default. IMF Staff Papers 56 (4), 683—741
Cruces J. J. and C. Trebesch (2013) Sovereign Defaults: The Price of Haircuts. American Economic Journal: Macroeconomics 5, 85-117
Levy Yeyati E. and U. Panizza (2011) The Elusive Costs of Sovereign Defaults. Journal of Development Economics 94, 95-105.
Reinhart C. M. and K.S. Rogoff (2009) This Time is Different: Eight Centuries of Financial Follies. Princeton University Press.
Trebesch C. and M. Zabel (2017). The Output Costs of Hard and Soft Sovereign Default. European Economic Review. 92: 416-432
iii) Distortions: Debt overhang; Debt structure: maturity and foreign currency composition
Gelos, G., R. Sahay, and G. Sandleris, (2011) “Sovereign borrowing by developing countries: What determines market access?” Journal of International Economics, 82(2), 243-254.
Hausmann R. and U. Panizza (2003) “On the determinants of Original Sin: an empirical investigation.” Journal of International Money and Finance, 22, pp. 957-990.
Krugman P. (1988) “Financing versus forgiving a debt overhang.” Journal of development economics, 29:3, pp. 253-68.
Presbitero Andrea and Ugo Panizza, (2013), Public debt and economic growth in advanced economies: A survey", Swiss Journal of Economics and Statistics, 149(II): 175-204
Reinhart, Carmen M and Kenneth S Rogoff (2010), “Growth in a Time of Debt” American Economic Review, May
Herndon Thomas, Michael Ash and Robert Pollin (2013) Does High Public Debt Consistently Stiffle Economic Growth? A Critique of Reinhart and Rogoff. Forthcoming in Cambridge Journal of Economics
iv) Remedies: Debt Restructuring And Debt Relief
Arslanalp S., P.B. Henry (2005) “Is debt relief efficient?” Journal of finance, 62: 2, pp. 1017-051.
Marchesi, S., J.P. Thomas (1999) “IMF conditionality as a screening device” The Economic Journal, 1999, 109, 111-125
Marchesi, S. (2003). Adoption of an IMF programme and debt rescheduling. An empirical analysis. Journal of Development Economics, 70(2), 403–423.
Reinhart, C. M. and C. Trebesch (2016). Sovereign Debt Relief and its Aftermath. Journal of the European Economic Association, 14(1): 215-251
III: INTERNATIONAL FINANCIAL ARCHITECTURE AND THE ROLE OF THE IMF
Introduction
Reinhart Carmen M and Christoph Trebesch, 2016, The International Monetary Fund: 70 Years of Reinvention, Journal of Economic Perspectives, Symposium: The Bretton Woods Institutions. Volume 30: 3-28.
International Monetary Fund, “About the IMF,” Available on-line:
i) Participation
Dreher, A., J.E. Sturm, and J.R. Vreeland (2009) “Global Horse Trading: IMF loans for votes in the United Nations Security Council.” European Economic Review 53: 742-757.
Dreher, A, and N.M., Jensen (2007) “Independent Actor or Agent? An Empirical Analysis of the Impact of U.S. Interests on IMF Conditions.” Journal of Law and Economics, 50, 105-124.
Dreher, A., S. Marchesi and J.R. Vreeland (2008) “The political economy of IMF forecasts,” Public Choice, 137, 145–171
Marchesi, S., and L. Sabani (2007a). IMF concern for reputation and conditional lending failure: Theory and empirics. Journal of Development Economics, 84, 640–666.
ii) Implementation and Effects
Barro, R.J. and Lee, J.W. (2005) “IMF-programs: Who is chosen and what are the effects?” Journal of Monetary Economics, 52, 1245–1269.
Marchesi S. and E. Sirtori (2011) “Is two better than one? Effects on growth of Bank-Fund interaction”, Review of International Organization, 2011, Volume 6, pp 287–306
Marchesi, S., L. Sabani and A. Dreher (2011) “Read my lips: the role of information transmission in multilateral reform design”, Journal of International Economics, 2011, Volume 84, pp. 86-98
Prerequisites
Students are expected to have a good knowledge of the fundamental concepts of microeconomics and macroeconomics, as well as familiarity with basic econometric methods.
Teaching methods
The course combines in-person lectures with students’ econometric projects.
Lectures introduce the main theoretical frameworks and empirical contributions in the international finance literature. Particular attention is devoted to the interpretation and critical discussion of theoretical and empirical papers.
The econometric projects allow students to apply the analytical and empirical tools introduced during the course to a specific research question in international finance.
Assessment methods
Assessment is based on a final written examination lasting 90 minutes and on the evaluation of students’ econometric projects.
The written examination consists of open-ended questions concerning the theoretical and empirical topics covered during the course. It assesses students’:
knowledge and understanding of the main theories and empirical findings;
ability to apply economic concepts to international financial issues;
ability to critically analyse theoretical arguments, empirical methodologies and policy implications;
ability to present economic arguments clearly, accurately and using appropriate terminology.
The econometric project assesses students’ ability to formulate a relevant research question, identify and use appropriate data, apply econometric methods, interpret the results and critically discuss the limitations of the analysis.
The final grade is based on the overall performance in the written examination and in the econometric project.
Textbooks and Reading Materials
There is no single official textbook. The course is based on selected academic papers, book chapters and additional teaching materials. Required and optional readings are listed in the detailed course programme and made available through the course platform.
Semester
Second semester
Teaching language
English
Sustainable Development Goals
Staff
-
Silvia Marchesi
