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Unit of study_

ECOS3029: International Financial Economics

This unit introduces students to international financial economics using a mixture of modern economic theory and empirical analysis. The inter-temporal model of the current account is examined to enable the analysis of the effects of economic policies on international trade and global financial markets. Theory and evidence for international asset positions will also be examined. Models of exchange rate and interest rate determination will be introduced and their empirical performance will be assessed. Topics covered will include sovereign debt, currency crises and the home bias portfolio puzzle.


Academic unit Economics
Unit code ECOS3029
Unit name International Financial Economics
Session, year
Semester 2, 2021
Attendance mode Normal day
Location Camperdown/Darlington, Sydney
Credit points 6

Enrolment rules

(ECOS2040 or ECOS2001 or ECOS2901) and (ECMT2130 or ECMT2160)
Available to study abroad and exchange students


Teaching staff and contact details

Coordinator John Romalis,
Type Description Weight Due Length
Final exam (Open book) Type C final exam Final Exam
Final exam
50% Formal exam period 2 hours
Outcomes assessed: LO1 LO2 LO3 LO4 LO5
Assignment Assignment 1
Written assignment involving economic theory and data analysis.
12.5% Week 07 750wd
Outcomes assessed: LO1 LO2 LO3 LO4
In-semester test (Open book) Type C in-semester exam Mid-semester exam
Mid-semester exam
25% Week 08
Due date: 06 Oct 2021 at 14:00
1 hour
Outcomes assessed: LO1 LO5 LO4 LO3 LO2
Assignment Assignment 2
Written assignment involving economic theory and data analysis.
12.5% Week 13 750wd.
Outcomes assessed: LO1 LO2 LO3 LO4 LO5
Type C final exam = Type C final exam ?
Type C in-semester exam = Type C in-semester exam ?

Detailed information for each assessment can be found on Canvas.

Assessment criteria

The University awards common result grades, set out in the Coursework Policy 2014 (Schedule 1).

As a general guide, a High distinction indicates work of an exceptional standard, a Distinction a very high standard, a credit a good standard, and a pass an acceptable standard.

Result name

Mark range


High distinction

85 - 100



75 - 84



65 - 74



50 - 64



0 - 49

When you don’t meet the learning outcomes of the unit to a satisfactory standard.

For more information see

Late submission

In accordance with University policy, these penalties apply when written work is submitted after 11:59pm on the due date:

  • Deduction of 5% of the maximum mark for each calendar day after the due date.
  • After ten calendar days late, a mark of zero will be awarded.

Special consideration

If you experience short-term circumstances beyond your control, such as illness, injury or misadventure or if you have essential commitments which impact your preparation or performance in an assessment, you may be eligible for special consideration or special arrangements.

Academic integrity

The Current Student website provides information on academic honesty, academic dishonesty, and the resources available to all students.

The University expects students and staff to act ethically and honestly and will treat all allegations of academic dishonesty or plagiarism seriously.

We use similarity detection software to detect potential instances of plagiarism or other forms of academic dishonesty. If such matches indicate evidence of plagiarism or other forms of dishonesty, your teacher is required to report your work for further investigation.

WK Topic Learning activity Learning outcomes
Week 01 Introduction; Measuring International Transactions; Balance of Payments Crises. Lecture and tutorial (3 hr)  
Week 02 Current Account; International Capital Flows; Sudden Stops. Lecture and tutorial (3 hr)  
Week 03 Current Account; International Capital Flows; Sudden Stops (Continued). Lecture and tutorial (3 hr)  
Week 04 The Foreign Exchange Market; Covered Interest Parity; Uncovered Interest Parity; The Carry Trade. Lecture and tutorial (3 hr)  
Week 05 The Real Exchange Rate. Lecture and tutorial (3 hr)  
Week 06 The Real Exchange Rate (continued). Lecture and tutorial (3 hr)  
Week 07 Monetary Models of the Exchange Rate: Long Run. Lecture and tutorial (3 hr)  
Week 08 Mid-Semester Exam. Lecture and tutorial (3 hr)  
Week 09 Monetary Models of the Exchange Rate: Short Run. Lecture and tutorial (3 hr)  
Week 10 Exchange Rate Regimes. Lecture and tutorial (3 hr)  
Week 11 Currency Crises. Lecture and tutorial (3 hr)  
Week 12 Risk and Term Structure of Interest Rates. Lecture and tutorial (3 hr)  
Week 13 Portfolio Balance Models. Lecture and tutorial (3 hr)  

Attendance and class requirements

  • Attendance: According to Faculty Board Resolutions, students in the Faculty of Arts and Social Sciences are expected to attend 90% of their classes. If you attend less than 50% of classes, regardless of the reasons, you may be referred to the Examiner’s Board. The Examiner’s Board will decide whether you should pass or fail the unit of study if your attendance falls below this threshold.
  • Lecture recording: All lectures will be recorded posted at the start of the scheduled lectured time
  • Preparation: Students should commit to spending approximately three hours’ preparation time (reading, studying, homework, essays, etc.) for every hour of scheduled instruction.

Study commitment

Typically, there is a minimum expectation of 1.5-2 hours of student effort per week per credit point for units of study offered over a full semester. For a 6 credit point unit, this equates to roughly 120-150 hours of student effort in total.

Required readings

All readings for this unit can be accessed through the Library eReserve, available on Canvas, including the main textbook for this unit: Principles of International Finance and Open Economy Macroeconomics, 1st Edition, by Cristina Terra.

Learning outcomes are what students know, understand and are able to do on completion of a unit of study. They are aligned with the University’s graduate qualities and are assessed as part of the curriculum.

At the completion of this unit, you should be able to:

  • LO1. Describe the structure, assumptions, and implications of international financial economics models.
  • LO2. Describe some key findings of empirical research on international financial economics.
  • LO3. Critically review and evaluate original empirical research on international financial economics.
  • LO4. Estimate and test the parameters and predictions of international financial economics models.
  • LO5. Discuss the implications and applications of international financial economics research for other fields of economics.

Graduate qualities

The graduate qualities are the qualities and skills that all University of Sydney graduates must demonstrate on successful completion of an award course. As a future Sydney graduate, the set of qualities have been designed to equip you for the contemporary world.

GQ1 Depth of disciplinary expertise

Deep disciplinary expertise is the ability to integrate and rigorously apply knowledge, understanding and skills of a recognised discipline defined by scholarly activity, as well as familiarity with evolving practice of the discipline.

GQ2 Critical thinking and problem solving

Critical thinking and problem solving are the questioning of ideas, evidence and assumptions in order to propose and evaluate hypotheses or alternative arguments before formulating a conclusion or a solution to an identified problem.

GQ3 Oral and written communication

Effective communication, in both oral and written form, is the clear exchange of meaning in a manner that is appropriate to audience and context.

GQ4 Information and digital literacy

Information and digital literacy is the ability to locate, interpret, evaluate, manage, adapt, integrate, create and convey information using appropriate resources, tools and strategies.

GQ5 Inventiveness

Generating novel ideas and solutions.

GQ6 Cultural competence

Cultural Competence is the ability to actively, ethically, respectfully, and successfully engage across and between cultures. In the Australian context, this includes and celebrates Aboriginal and Torres Strait Islander cultures, knowledge systems, and a mature understanding of contemporary issues.

GQ7 Interdisciplinary effectiveness

Interdisciplinary effectiveness is the integration and synthesis of multiple viewpoints and practices, working effectively across disciplinary boundaries.

GQ8 Integrated professional, ethical, and personal identity

An integrated professional, ethical and personal identity is understanding the interaction between one’s personal and professional selves in an ethical context.

GQ9 Influence

Engaging others in a process, idea or vision.

Outcome map

Learning outcomes Graduate qualities
This is the first time this unit has been offered.


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