Modern economies become more and more open and the external sector
of an economy becomes more and more important. This textbook aims
at clarify ing how an open economy functions, in particular at
explaining the determi nants of international fiows of commodities
and financial assets. It also aims at examining the effects of
these fiows on the domestic and international econ omy and the
possible policy acti.ons at the national and international level.
Particular attention will be paid to the problems of international
economic at both the commercial and monetary level. integration
Students will be able to read and interpret the balance of payments
of a country, evaluating the various types of balance, to explain
the behaviour of commercial fiows in the light of the theories
studied, to analyze fiows of financial assets according to
interest-rate differentials and other elements, to study the forces
that determine exchange rates and cause currency crises, to
understand the reasons behind international economic integration
such as the European Union, to evaluate the effects of national and
international policies."
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