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International Financial Relations and European Monetary Union
Study Course Description
Course Description Statuss:Approved
Course Description Version:7.00
Study Course Accepted:02.02.2024 12:29:37
| Study Course Information | |||||||||
| Course Code: | SBUEK_076 | LQF level: | Level 6 | ||||||
| Credit Points: | 2.00 | ECTS: | 3.00 | ||||||
| Branch of Science: | Economics | Target Audience: | Business Management | ||||||
| Study Course Supervisor | |||||||||
| Course Supervisor: | Anželika Berķe-Berga | ||||||||
| Study Course Implementer | |||||||||
| Structural Unit: | Faculty of Social Sciences | ||||||||
| The Head of Structural Unit: | |||||||||
| Contacts: | Dzirciema street 16, Rīga, szf rsu[pnkts]lv | ||||||||
| Study Course Planning | |||||||||
| Full-Time - Semester No.1 | |||||||||
| Lectures (count) | 8 | Lecture Length (academic hours) | 2 | Total Contact Hours of Lectures | 16 | ||||
| Classes (count) | 4 | Class Length (academic hours) | 2 | Total Contact Hours of Classes | 8 | ||||
| Total Contact Hours | 24 | ||||||||
| Part-Time - Semester No.1 | |||||||||
| Lectures (count) | 4 | Lecture Length (academic hours) | 2 | Total Contact Hours of Lectures | 8 | ||||
| Classes (count) | 2 | Class Length (academic hours) | 2 | Total Contact Hours of Classes | 4 | ||||
| Total Contact Hours | 12 | ||||||||
| Study course description | |||||||||
| Preliminary Knowledge: | Basics of economics, basics of finances, history of economics and business, microeconomics and macroeconomics, international business relations. | ||||||||
| Objective: | To provide an understanding of the essence, types, forms, processes of the establishment of international financial relations and accounting thereof, to acquaint with the main international financial organisations, and the aims and specifics of their activities. | ||||||||
| Topic Layout (Full-Time) | |||||||||
| No. | Topic | Type of Implementation | Number | Venue | |||||
| 1 | Introduction. Study course description. Literature. The basis of origin of international financial relations. Exchange market, its functions. Exchange market participants. Currency, its categories, classification, and exchange rate. Currency conversion, convertibility. Arbitration, hedging, and speculation. Currency risk. Currency parity: purchasing power parity; interest rate parity. | Lectures | 1.00 | auditorium | |||||
| 2 | Exchange rate and monetary policy. Factors affecting the exchange rate. Fixed and floating exchange rate regimes. Participants and forms of currency policy. Currency intervention. Devaluation and revaluation. Currency policy and macroeconomic stability. | Lectures | 1.00 | auditorium | |||||
| 3 | Use of exchange rate in international transactions. Tasks. | Classes | 1.00 | auditorium | |||||
| 4 | Balance of payments: definition, structure. Current account. Financial account. Accounting. | Lectures | 1.00 | auditorium | |||||
| 5 | Economic policy of the balance of payments. Correction of imbalances in the balance of payments. | Lectures | 1.00 | auditorium | |||||
| 6 | Functioning of the D. Hume mechanism – automaticity of the fixed exchange rate system: theory and practice. Balance of payments: Experience of Latvia and other countries. Tasks. | Classes | 1.00 | auditorium | |||||
| 7 | Historical development of international currency relations. Bimetallism. Monometallism. Gold standard and gold parity. Bretton Woods currency system. Jamaican currency system. | Lectures | 1.00 | auditorium | |||||
| 8 | International financial institutions. International Monetary Fund. World Bank and its structures. IFC, EBRD, AsDB. Studies by international financial institutions on the business environment. Doing Business 2014 (World Bank) study on the business environment in 189 countries worldwide. | Lectures | 1.00 | auditorium | |||||
| 9 | Practical work: World Bank projects and business environment analysis in different countries of the world. | Classes | 1.00 | auditorium | |||||
| 10 | European Monetary System (EMS): system, objectives, achievements, “parity grid”, mutual support, ECU, versions of the EMS. Elements and mechanisms of the EMS. European Monetary Union (EMU). Maastricht Treaty. The Eurosystem. Goals, tools, strategy. | Lectures | 1.00 | auditorium | |||||
| 11 | Optimal currency areas (OCA). OCA criteria: political and economical. European eligibility for OCA status. Symmetric and asymmetric shocks. | Lectures | 1.00 | auditorium | |||||
| 12 | Assessment of the euro area as a currency area. Impact of the economic activities of PIIGS countries on the stability of the euro area. Practical work in groups. | Classes | 1.00 | auditorium | |||||
| Topic Layout (Part-Time) | |||||||||
| No. | Topic | Type of Implementation | Number | Venue | |||||
| 1 | Introduction. Study course description. Literature. The basis of origin of international financial relations. Exchange market, its functions. Exchange market participants. Currency, its categories, classification, and exchange rate. Currency conversion, convertibility. Arbitration, hedging, and speculation. Currency risk. Currency parity: purchasing power parity; interest rate parity. | Lectures | 0.50 | ||||||
| 2 | Exchange rate and monetary policy. Factors affecting the exchange rate. Fixed and floating exchange rate regimes. Participants and forms of currency policy. Currency intervention. Devaluation and revaluation. Currency policy and macroeconomic stability. | Lectures | 0.50 | auditorium | |||||
| 3 | Use of exchange rate in international transactions. Tasks. | Classes | 0.50 | auditorium | |||||
| 4 | Balance of payments: definition, structure. Current account. Financial account. Accounting. | Lectures | 0.50 | auditorium | |||||
| 5 | Economic policy of the balance of payments. Correction of imbalances in the balance of payments. | Lectures | 0.50 | auditorium | |||||
| 6 | Functioning of the D. Hume mechanism – automaticity of the fixed exchange rate system: theory and practice. Balance of payments: Experience of Latvia and other countries. Tasks. | Classes | 0.50 | auditorium | |||||
| 7 | Historical development of international currency relations. Bimetallism. Monometallism. Gold standard and gold parity. Bretton Woods currency system. Jamaican currency system. | Lectures | 0.50 | auditorium | |||||
| 8 | International financial institutions. International Monetary Fund. World Bank and its structures. IFC, EBRD, AsDB. Studies by international financial institutions on the business environment. Doing Business 2014 (World Bank) study on the business environment in 189 countries worldwide. | Lectures | 0.50 | auditorium | |||||
| 9 | Practical work: World Bank projects and business environment analysis in different countries of the world. | Classes | 0.50 | auditorium | |||||
| 10 | European Monetary System (EMS): system, objectives, achievements, “parity grid”, mutual support, ECU, versions of the EMS. Elements and mechanisms of the EMS. European Monetary Union (EMU). Maastricht Treaty. The Eurosystem. Goals, tools, strategy. | Lectures | 0.50 | auditorium | |||||
| 11 | Optimal currency areas (OCA). OCA criteria: political and economical. European eligibility for OCA status. Symmetric and asymmetric shocks. | Lectures | 0.50 | auditorium | |||||
| 12 | Assessment of the euro area as a currency area. Impact of the economic activities of PIIGS countries on the stability of the euro area. Practical work in groups. | Classes | 0.50 | auditorium | |||||
| Assessment | |||||||||
| Unaided Work: | Development of summaries – solving practical tasks and studying individual issues, incl. compilation and analysis of statistical data. Report – a practical study on one of the selected report topics according to the course content. Preparation of a presentation and presentation of the economic significance of currency regimes and/or the business environment of specific countries based on the results of Doing Business and/or Enterprise Surveys research. | ||||||||
| Assessment Criteria: | The final grade, which the student receives at the end of the course, is formed by the following structure of significance of individual works: 1. Participation in lectures – 5%. 2. Participation and quality of work in seminars – 20%. 3. Summaries – 15%. 4. Report – 25%. 5. Exam mark – 35%. | ||||||||
| Final Examination (Full-Time): | Exam (Written) | ||||||||
| Final Examination (Part-Time): | Exam (Written) | ||||||||
| Learning Outcomes | |||||||||
| Knowledge: | Successful completion of the study course will provide students with an understanding of the basis of origins and causes of international financial relations, international trade, the development of currency systems and current realities, principles and significance of the development of balance of payments, specifics of currency market functioning and exchange rate policies, regimes, the economic rationale and significance of the EMS, the introduction of the euro, the theory of optimal currency areas for the activities of international financial institutions. | ||||||||
| Skills: | Ability to analyse and study international financial flows and trends, to draw conclusions. To understand the specifics of national monetary policy and their impact on the economy, both locally and globally. | ||||||||
| Competencies: | Ability to manage currency transactions, perform currency exchange operations; ability to identify specifics of the economic environment and market conditions, to assess the need to change the financial position and objectives of the company. | ||||||||
| Bibliography | |||||||||
| No. | Reference | ||||||||
| Required Reading | |||||||||
| 1 | Baldwin R., Wyplosz C. The Economics of European Integration. McGraw-Hill, 2012, 560 p. | ||||||||
| 2 | Mishkin F. S., Stanley G. E. Financial Markets and Institutions. 9th edition. Pearson Ed., 2018 | ||||||||
| 3 | Salvatore D. International Economics: Trade and Finance. 10th edition. Wiley, 2011, 812 p. | ||||||||
| 4 | The World Bank, IFC Doing Business 2014. Understanding Regulations for Small and Medium – Size Enterprises. 11th edition. IBRD, USA, 2013, 306 p. | ||||||||
| 5 | Krugman P.R., Obstfeld M., Melitz M.J. International Economics: theory and policy. 10th edition. Pearson, 2015, 785 p. | ||||||||
| 6 | Robert A. Mundell Optimum Currency Areas. Columbia University. | ||||||||
| 7 | World Bank. Doing Business 2020: Comparing Business regulation in 190 Economies. 2020, 135 p. | ||||||||
| Additional Reading | |||||||||
| 1 | Nelson R. M., Belkin P., Mix D. E. Greece’s Debt Crisis: Overview, Policy, Responses, and Implications. Congressional research Service, 2011; 1-19 p. | ||||||||
| 2 | The World Bank. Annual Report. 2020, 106 p. | ||||||||
| 3 | IMF, Annual Report on Exchange Arrangements and Exchange Restrictions 2020. 2021, 4020 p. | ||||||||
| 4 | Barseghyan M., Davtyan A. Errors and omissions in Armenia's balance of payments: possible reasons and solutions. Central Bank of Armenia, BIS, 2018, 29 p. | ||||||||
| 5 | Bank of Latvia, Latvia’s Balance of Payments 2020; 51 p. | ||||||||
| Other Information Sources | |||||||||
| 1 | www.bank.lv | ||||||||
| 2 | www.csb.gov.lv | ||||||||
| 3 | www.doingbusiness.org | ||||||||
| 4 | www.ebrd.com | ||||||||
| 5 | www.ecb.int | ||||||||
| 6 | www.enterprisesurveys.org | ||||||||
| 7 | www.esia.gov.lv | ||||||||
| 8 | www.fm.gov.lv | ||||||||
| 9 | www.fxcm.com | ||||||||
| 10 | www.lem.gov.lv | ||||||||
| 11 | www.worldbank.org | ||||||||
