Table of Contents
Why Study International Finance?
Part I: The International Monetary Environment
Chapter 1. The Foreign Exchange Market
Foreign Exchange Trading Volume
Geographic Foreign Exchange Rate Activity
Short-Term Foreign Exchange Rate Movements
Long-Term Foreign Exchange Movements
Appendix A Trade-Weighted Exchange Rate Indexes
Appendix B The Top Foreign Exchange Dealers
Chapter 2. International Monetary Arrangements
The Interwar Period: 1918–1939
The Bretton Woods Agreement: 1944–1973
Central Bank Intervention During Bretton Woods
The Breakdown of the Bretton Woods System
The Transition Years: 1971–1973
International Reserve Currencies
Post Bretton Woods: 1973 to the Present
The Choice of an Exchange Rate System
Currency Boards and “Dollarization”
The European Monetary System and the Euro
Appendix A Current Exchange Rate Arrangements
Chapter 3. The Balance of Payments
Balance of Payments Equilibrium and Adjustment
Part II: International Parity Conditions
Chapter 4. Forward-Looking Market Instruments
Other Forward-Looking Instruments
Chapter 5. Eurocurrency Markets and the LIBOR
Interest Rate Spreads and Risk
International Banking Facilities
Chapter 6. Exchange Rates, Interest Rates, and Interest Parity
Effective Return on a Foreign Investment
Deviations From Covered Interest Rate Parity
Exchange Rates, Interest Rates, and Inflation
Expected Exchange Rates and the Term Structure of Interest Rates
Appendix A What are Logarithms, and Why are They Used in Financial Research?
Chapter 7. Prices, Exchange Rates, and Purchasing Power Parity
Absolute Purchasing Power Parity
Relative Purchasing Power Parity
Part III: Risk and International Capital Flows
Chapter 8. Foreign Exchange Risk and Forecasting
Types of Foreign Exchange Risk
The Foreign Exchange Risk Premium
Fundamental Versus Technical Trading Models
Chapter 9. Financial Management of the Multinational Firm
Chapter 10. International Investment
Reasons for Incomplete Portfolio Diversification
International Investment Opportunities
The Globalization of Equity Markets
Appendix A American Depositary Receipts
Chapter 11. International Lending and Crises
International Lending and the Great Recession
Part IV: Modeling the Exchange Rate and Balance of Payments
Chapter 12. Determinants of the Balance of Trade
Elasticities Approach to the Balance of Trade
The Evidence From Devaluations
Absorption Approach to the Balance of Trade
Chapter 13. The IS-LM-BP Approach
The Internal and External Macroeconomic Equilibrium
Monetary Policy Under Fixed Exchange Rates
Fiscal Policy Under Fixed Exchange Rates
Monetary Policy Under Floating Exchange Rates
Fiscal Policy Under Floating Exchange Rates
Using the IS-LM-BP Approach: The Asian Financial Crisis
International Policy Coordination
Appendix A The Open Economy Multiplier
Chapter 14. The Monetary Approach
The Monetary Approach to the Balance of Payments
The Monetary Approach to the Exchange Rate
The Monetary Approach for a Managed Floating Exchange Rate
Chapter 15. Extensions and Challenges to the Monetary Approach
The Currency Substitution Approach