Cancelled International Macroeconomics (F)

Course content

This course introduces students to key topics in international macroeconomics, including but not limited to the determination of international capital flows, business cycle synchronization across countries, the role of asset markets, exchange rates, and gains from financial integration. The first half of the course will focus on small open economies, the second half on two country frameworks.

Methodologically, the course will combine theory, computation and empirics: Students will learn how to solve, calibrate, and simulate many of the models discussed in the course.

The course provides students with a set of tools to help them identify relevant questions in international macroeconomics and the right approach to answering them. These skills and the analytical and numerical methods acquired in the course are transferable and particularly apply to settings such as the economic research and analysis divisions of private companies and government institutions.

Specific topics covered include:

  • Stylized facts in international macroeconomics: Business cycles across countries
  • The canonical small open economy model
  • Frictions in small open economies: Models of sovereign default
  • Two country frameworks: International risk sharing and exchange rates
  • Home equity bias and portfolio choice
  • Gains from financial integration
  • Monetary policy in open economies

The course is open to:

  • Exchange and Guest students from abroad
  • Credit students from Danish Universities
  • Open University students
Learning outcome

After completing the course, students are expected to be able to:



  • Account for key features of international business cycles
  • Account for and formulate canonical small open economy models and two-country international macro models
  • Account for and discuss the role of relevant features of such models
  • Account for relevant numerical methods to solve, simulate and evaluate such models


  • Solve and evaluate canonical international macroeconomic models
  • Gather, analyze and interpret relevant international macroeconomic data
  • Interpret results from research papers on these topics and put them into context


  • Identify relevant policy and research questions in international macroeconomics
  • Select and apply relevant theories to addressing such questions

Most teaching will take the form of theoretical lectures. Some session may involve applied work on the computer where students bring laptops and solve exercises under supervision.

The course material will consist primarily of journal articles. A tentative and non-exhaustive list of key papers on the topics covered in the course is given below, a final reading list will be made available as the course progresses. In addition, the course will build on material from the following textbook:

Schmitt-Grohe S. and M. Uribe, Open Economy Macroeconomics, Princeton University Press 2017

List of relevant papers:

Ambler, S., Cardia, E., and Zimmermann, C. (2004). International business cycles: What are the facts? Journal of Monetary Economics, 51(2):257–276.

Backus, D. K., Kehoe, P. J., and Kydland, F. (1993). International Business Cycles: Theory vs. Evidence. Quarterly Review, 17(4).

Backus, D. K., Kehoe, P. J., and Kydland, F. E. (1992). International Real Business Cycles. Journal of Political Economy, 100(4):745–775.

Backus, D. K. and Smith, G. W. (1993). Consumption and real exchange rates in dynamic economies with non-traded goods. Journal of International Economics, 35(3):297–316.

Coeurdacier, N., Rey, H., and Winant, P. (2020). Financial integration and growth in a risky world. Journal of Monetary Economics, 112:1–21.

Corsetti, G., Dedola, L., and Leduc, S. (2008). International Risk Sharing and the Transmission of Productivity Shocks. The Review of Economic Studies, 75(2):443–473.

Oleg Itskhoki & Dmitry Mukhin, 2021. "Exchange Rate Disconnect in General Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 129(8), pages 2183-2232.

Neumeyer, Pablo A. & Perri, Fabrizio, 2005. "Business cycles in emerging economies: the role of interest rates," Journal of Monetary Economics, Elsevier, vol. 52(2), pages 345-380

Cristina Arellano, 2008. "Default Risk and Income Fluctuations in Emerging Economies," American Economic Review, American Economic Association, vol. 98(3), pages 690-712

Heathcote, Jonathan & Perri, Fabrizio, 2002. "Financial autarky and international business cycles," Journal of Monetary Economics, Elsevier, vol. 49(3), pages 601-627

Jonathan Heathcote & Fabrizio Perri, 2013. "The International Diversification Puzzle Is Not as Bad as You Think," Journal of Political Economy, University of Chicago Press, vol. 121(6), pages 1108-1159

Jordi Galí & Tommaso Monacelli, 2005. "Monetary Policy and Exchange Rate Volatility in a Small Open Economy," Review of Economic Studies, Oxford University Press, vol. 72(3), pages 707-734.

It is strongly recommended to have followed the courses Macroeconomics III or equivalent prior to taking this course.

Familiarity with intertemporal optimization, the analysis of static and dynamic systems under rational expectations and basic multivariate econometrics are assumed.

3 hours lectures a week from week 36 to 50 (except week 42).


The students receive individual written feedback at the mandatory assignments.

The lecturer gives collective oral feedback in the lectures.  

7,5 ECTS
Type of assessment
Written examination, 12 hours
Type of assessment details
Individual take-home exam.
It is not allowed to collaborate on the assignment with anyone.
The exam assignment is in English and must be answered in English.
Exam registration requirements

To qualify for the exam the student must no later than the given deadlines during the course hand in and get approval of 3 out of 3 mandatory assignments.

All aids allowed

All aids allowed. 

Marking scale
7-point grading scale
Censorship form
No external censorship
No extern censur.

Reexam: written home assignment, same as the ordinary exam.


You must hand in of 3 out of 3 mandatory assignments and get them approved.

Criteria for exam assessment

Students are assessed on the extent to which they master the learning outcome for the course.


In order to obtain the top grade “12”, the student must with no or only a few minor weaknesses be able to demonstrate an excellent performance displaying a high level of command of all aspects of the relevant material and can make use of the knowledge, skills and competencies listed in the learning outcomes.


In order to obtain the grade “02”, the student must in a satisfactory way be able to demonstrate a minimal acceptable level of  the knowledge, skills and competencies listed in the learning outcomes.

Single subject courses (day)

  • Category
  • Hours
  • Lectures
  • 42
  • Preparation
  • 152
  • Exam
  • 12
  • English
  • 206


Course number
7,5 ECTS
Programme level
Full Degree Master

1 semester

Department of Economics, Study Council
Contracting department
  • Department of Economics
Contracting faculty
  • Faculty of Social Sciences
Course Coordinator
  • Laura Sunder-Plassmann   (22-6e63777463307577706667742f726e6375756f6370704267657170306d7730666d)
Saved on the 12-06-2023

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