International Money and Finance, Ninth Edition presents an institutional and historical overview of international finance and international money, illustrating how key economic concepts can illuminate real world problems.
With three substantially revised chapters, and all chapters updated, it functions as a finance book that includes an international macroeconomics perspective in its final section. It emphasizes the newest trends in research, neatly defining the intersection of macro and finance.
Successfully used worldwide in both finance and economics departments at both undergraduate and graduate levels, the book features current data, revised test banks, and sharp insights about the practical implications of decision-making.
Key Features
- Includes current events, such as the LIBOR and Greek crises
- increases emphasis on countries other than the US
- Minimizes prerequisites to encourage use by students from varied backgrounds
Part I: The International Monetary Environment
Chapter 1. The Foreign Exchange Market
- Abstract
- Foreign Exchange Trading Volume
- Geographic Foreign Exchange Rate Activity
- Spot Exchange Rates
- Currency Arbitrage
- Short-Term Foreign Exchange Rate Movements
- Long-Term Foreign Exchange Movements
- Summary
- Exercises
- Further Reading
- Appendix A Trade-Weighted Exchange Rate Indexes
- Appendix B The Top Foreign Exchange Dealers
Chapter 2. International Monetary Arrangements
- Abstract
- The Gold Standard: 1880–1914
- 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¿
- Optimum Currency Areas
- The European Monetary System and the Euro
- Summary
- Exercises
- Further Reading
- Appendix A Current Exchange Rate Arrangements
Chapter 3. The Balance of Payments
- Abstract
- Current Account
- Financing the Current Account
- Additional Summary Measures
- Transactions Classifications
- Current Account Disequilibria
- Balance of Payments Equilibrium and Adjustment
- The US Foreign Debt
- How Serious Is the US Foreign Debt?
- Summary
- Exercises
- Further Reading
Part II: International Parity Conditions
Chapter 4. Forward-Looking Market Instruments
- Abstract
- Forward Rates
- Swaps
- Futures
- Options
- Other Forward-Looking Instruments
- Summary
- Exercises
- Further Reading
Chapter 5. Eurocurrency Markets and the LIBOR
- Abstract
- Reasons for Offshore Banking
- Interest Rate Spreads and Risk
- International Banking Facilities
- Offshore Banking Practices
- LIBOR
- The BBA LIBOR
- LIBOR Rigging
- The ICE LIBOR
- Summary
- Exercises
- Further Reading
Chapter 6. Exchange Rates, Interest Rates, and Interest Parity
- Abstract
- Interest Rate Parity
- Effective Return on a Foreign Investment
- Deviations From Covered Interest Rate Parity
- Interest Rates and Inflation
- Exchange Rates, Interest Rates, and Inflation
- Expected Exchange Rates and the Term Structure of Interest Rates
- Summary
- Exercises
- Further Reading
- Appendix A What are Logarithms, and Why are They Used in Financial Research?
Chapter 7. Prices, Exchange Rates, and Purchasing Power Parity
- Abstract
- Absolute Purchasing Power Parity
- The Big Mac Index
- Relative Purchasing Power Parity
- Time, Inflation, and PPP
- Deviations From PPP
- Overvalued and Undervalued Currencies
- Real Exchange Rates
- Summary
- Exercises
- Further Reading
- Appendix A The Effect on PPP by Relative Price Changes
Part III: Risk and International Capital Flows
Chapter 8. Foreign Exchange Risk and Forecasting
- Abstract
- Types of Foreign Exchange Risk
- The Foreign Exchange Risk Premium
- Market Efficiency
- Foreign Exchange Forecasting
- Fundamental Versus Technical Trading Models
- Summary
- Exercises
- Further Reading
Chapter 9. Financial Management of the Multinational Firm
- Abstract
- Financial Control
- Cash Management
- Letters of Credit
- An Example of Trade Financing
- Intrafirm Transfers
- Capital Budgeting
- Summary
- Exercises
- Further Reading
- Appendix A Present Value
Chapter 10. International Investment
- Abstract
- Portfolio Diversification
- Reasons for Incomplete Portfolio Diversification
- International Investment Opportunities
- The Globalization of Equity Markets
- Foreign Direct Investment
- Capital Flight
- Capital Inflow Issues
- Summary
- Exercises
- Further Reading
- Appendix A American Depositary Receipts
Chapter 11. International Lending and Crises
- Abstract
- International Lending
- Causes of Financial Crises
- International Lending and the Great Recession
- International Lending and the Greek Debt Crisis
- IMF Conditionality
- The Role of Corruption
- Country Risk Analysis
- Summary
- Exercises
- Further Reading
Part IV: Modeling the Exchange Rate and Balance of Payments
Chapter 12. Determinants of the Balance of Trade
- Abstract
- Elasticities Approach to the Balance of Trade
- Elasticities and the J-Curve
- Currency Contract Period
- Pass-Through Analysis
- The Marshall–Lerner Condition
- The Evidence From Devaluations
- Absorption Approach to the Balance of Trade
- Summary
- Exercises
- Further Reading
Chapter 13. The IS-LM-BP Approach
- Abstract
- The Internal and External Macroeconomic Equilibrium
- The IS Curve
- The LM Curve
- The BP Curve
- 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
- Summary
- Exercises
- Further Reading
- Appendix A The Open Economy Multiplier
Chapter 14. The Monetary Approach
- Abstract
- Specie-Flow Mechanism
- 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
- Sterilization
- Sterilized Intervention
- Summary
- Exercises
- Further Reading
Chapter 15. Extensions and Challenges to the Monetary Approach
- Abstract
- The Role of News
- The PB Approach
- The Trade Balance Approach
- The Overshooting Approach
- The Currency Substitution Approach
- Recent Innovations to Open-Economy Macroeconomics
- Summary
- Exercises
- Further Reading
- Caselli, Private Equity and Venture Capital in Europe, 2010, 9780123750266, 368 pp., $83.95
- Cornelius, International Investments in Private Equity, 2010, 9780123750822, 328 pp., $94.95
- Stowell, Investment Banks, Hedge Funds, and Private Equity, 2nd ed. 2012, 9780124158207, 672 pp, $79.95
Upper-division undergraduate and graduate level students worldwide working in international finance and economics