• FNCE3005
  • Int Fin & Monetary Economics

  • Credits (ECTS): 10
  • Accounting and Finance

Modules are delivered
as part of a programme.
To apply for the
programme,
see the DIT website

Module Description

This module is an advanced module in Economics aimed at students in the final year of an undergraduate course. It is suitable for students in programmes in Economics and Finance, Accounting and Finance and undergraduates in Business programmes that wish to take an Economics/Finance module.

Indicative Syllabus

The Foreign Exchange Market
(i) Characteristics and participants in the foreign exchange market.
(ii) Interaction of Hedgers, Arbitrageurs and Speculators.
(iii) Speculation and the forward exchange rate.
(iv) Basic Demand/Supply analysis.
The Classical Model.
Analysis of the basic equations and diagrams of the Classical model. Application of the model to the closed economy, the small open economy and the large open economy. The loanable funds market, the net capital outflow and the foreign exchange market. Case studies on changes in exogenous variables e.g. changes in fiscal policy and in monetary policy and examination of the impact on endogenous variables.
Business Cycle Theory.
(i) Time Horizons in Macroeconomics.
(ii) Aggregate Demand/Aggregate Supply analysis in the short run and in the long run.
(iii) Linking the short run and the long run with stabilization policy.
IS/LM Analysis.
(i) The goods market and the IS curve.
(ii) The money market and the LM curve.
(iii) The impact of fiscal and monetary policy changes in the model.
(iv) The interaction between fiscal and monetary policies in the model.
(v) Linking IS/LM analysis with aggregate demand/aggregate supply analysis.
The Mundell-Fleming Model of the Small Open Economy.
The IS* and LM* curves of with the exchange rate included. The impact on the model of changes in fiscal policy, monetary policy and trade policy under both fixed and flexible exchange rates. Incorporating interest rate differentials and a risk premium into the Mundell-Fleming model.
The Great Depression:
(i)The different views of the causes of the Great Depression – Spending hypothesis versus Money hypothesis.
(ii) Application of this analysis to other financial crises in the world economy.
The Trade-Off between Inflation and Unemployment:
The different models of aggregate supply – sticky price model, the sticky wage model and the imperfect information model. The Phillips curve and introducing expectations into the model.
This course also has a significant applied Economics aspect. Irish, European Union and U.S. economy illustrations and empirical analysis are used to show the practical aspects of the course. These illustrations in turn will very often relate to policy issues that are of current concern.

Total Contact Teaching Hours:72

Pre-requisite Modules

Title Code
Macroeconomic Theory & Policy ECON2002

Please note that the catalogue is provided as a guide to modules in DIT. Not all modules listed will necessarily be offered every year and new modules may also be added. Information subject to change. For detail on specific programmes/modules please contact the relevant School directly.