Core Macroeconomics, Hilary Term 2017

Week 5: The Open Economy: Shocks and Imbalances

This week we continue to develop our understanding of the open economy, sticking fairly closely to the textbook and lecture models.

Readings

Open economy lecture notes by Rui Esteves.

C&S Chapters 11-12.

Assignment

This essay is Question 1 from C&S Chapter 12, end of chapter problems and questions. In your answer please present relevant empirical evidence in addition to discussing things from a theoretical perspective. Your essay should assess the following claim:

"The ECB's success in achieving low and stable inflation during the Eurozone's first decade disguised the build-up of dangerous imbalances among the members."