Oxford Summer School in International Finance Syllabus

6-10 September 2021



1. Course Description

The summer school in International Finance will run from Monday, 6 September, to Friday 10 September 2021 in the afternoons. Each day will feature a two-hour lecture followed by
a one-hour interactive session, which will include hands-on examples, class discussion, and presentations.

The first half of the course will start with some discussion on the Dilemma hypothesis, followed by the introduction of an open economy macroeconomic model to think about the
empirical evidence and the policy implications.

The second part will first analyze current account imbalances in the Euro Area, the debt crisis, and the role of monetary policy, and then look at the link between capital ows and


2. Readings

1. The Dilemma Hypothesis

• Cesa-Bianchi, A., A. Ferrero and A. Rebucci (2018). "International Credit Supply Shocks," Journal of International Economics 112, pp. 219-237.
• Miranda-Agrippino, S. and H. Rey (2020). "US Monetary Policy and the Global Financial Cycle," Review of Economic Studies 87, pp. 2754{2776.
• Obstfeld, M., J. Ostry and M. Qureshi (2019). "A Tie That Binds: Revisiting the Trilemma in Emerging Market Economies," Review of Economics and Statistics 101, pp. 279-293.
• Rey, H. (2013). "Dilemma not Trilemma: The Global Financial Cycle and Monetary Policy Independence," Federal Reserve Bank of Kansas City Economic Policy
, pp. 285-333.


2. The International Transmission of Financial Shocks

• Adrian, T., C. Erceg, J. Linde, P. Zabczyk and J. Zhou (2020). "A Quantitative Model for the Integrated Policy Framework," IMF Working Paper 20/122.
• Basu, S., E. Boz, G. Gopinath, F. Roch, and F. Unsal (2020). "A Conceptual Model for the Integrated Policy Framework," IMF Working Paper 20/121.
• Akinci, O. and A. Queralto (2018). \Balance Sheets, Exchange Rates, and International Monetary Spillovers," Federal Reserve Bank of New York Staff Reports 849.
• Aoki, K., G. Benigno and N. Kiyotaki (2018). "Monetary and Financial Policies in Emerging Markets," Working Paper.
• Cesa-Bianchi, A., A. Ferrero and A. Rebucci (2021). "Capital Flows and Exchange Rates: A Quantitative Assessment of the Dilemma Hypothesis," Work in Progress.


3. Capital Flows and Sovereign Default in the Euro Area

• Arellano, C. (2008). "Default Risk and Income Fluctuations in Emerging Economies," American Economic Review 98, pp. 690-712.
• Chen, R., G.-M. Milesi-Ferretti and T. Tressel (2013). "External Imbalances in the Eurozone," Economic Policy 28, pp.101-142.
• de Ferra, S. (2021). "External Imbalances, Gross Capital Flows, and Sovereign Debt Crises," Journal of the European Economic Association 19, pp. 347-402.
• Martin, P., and T. Philippon (2017). "Inspecting the Mechanism: Leverage and the Great Recession in the Eurozone," American Economic Review 107, pp. 1904-
• Gourinchas, P.-O., P. Martin and T. Messer. (2020). "The Economics of Sovereign Debt, Bailouts and the Eurozone Crisis," NBER Working Paper 27403.
• Fornaro, L. (2018). "International Debt Deleveraging," Journal of the European Economic Association 16, pp. 1394-1432.
• De Ferra, S., and F. Romei (2018). "Sovereign Default in a Monetary Union," CEPR Discussion Papers No. 12976.


4. Capital Flows and Inequality

• De Ferra, S., K. Mitman and F. Romei (2020). "Household Heterogeneity and the Transmission of Foreign Shocks," Journal of International Economics 124, 103303.
• de Ferra, S., K. Mitman and F. Romei (2021). "Why Does Capital Flow from Equal to Unequal Countries?" CEPR Discussion Papers No. 15647.
• Coeurdacier, N., S. Guibaud and K. Jin (2015). "Credit Constraints and Growth in a Global Economy," American Economic Review 105, pp. 2838-2881.
• Diaz Alejandro, C. (1963). "A Note on the Impact of Devaluation and the Redistributive Effect," Journal of Political Economy 71, pp. 577-580.