Preface
Chapter 1 International Economics Is Different
Four Controversies
Economics and the Nation-State g
PART ONE UNDERSTANDING FOREIGN EXCHANGE
Chapter 2 Payments among Nations
Accounting Principles
A Country's Balance of Payments
The Macro Meaning of the Current Account Balance
The Macro Meaning of the Overal Balance
The International Investment Position
Euro Crisis International Indicators Lead the Crisis
Summary
Key Terms
Suggested Reading
Questions and Problems
Chapter 3 The Foreign Exchange Market
The Basics of Currency Trading
Case Study Foreign Exchange Trading
Demand and Supply for Foreign Exchange
Arbitrage within the Spot Exchange Market
Summary
Key Terms
Suggested Reading
Ouestions and Problems
Chapter 4 Forward Exchange and International Financial Investment
Exchange-Rate Risk
The Market Basics of Forward Foreign Exchange
Extension Futures,Options,and Swaps
International Financial Investment
International Investment with Cover
International Investment without Cover
Case Study The World's Greatest Investor
Does Interest Parity Really Hold? Empirical Evidence
Case Study Eurocurrencies:Not (Just)Euros and Not Regulated
Summary
Key Terms
Suggested Reading
Questions and Problems
Chapter 5 What Determines Exchange Rates?
A Road Map
Exchange Rates in the Short Run
The Long Run:Purchasing Power Parity (PPP)
Case Study PPPfrom Time to Time
Case Study Price Gaps and International Income Comparisons
The Long Run:The Monetary Approach
Exchange-Rate Overshooting
How Well Can We Predict Exchange Rates?
Four Ways to Measure the Exchange Rate
Summary