Obstfeld, M: Foundations of International Macroeconomics

Part 1 Intertemporal trade and the current account balance: a small two-period endowment economy - application - consumption smoothing in the second millennium BC; the role of investment - nominal versus real current accounts; a two-region world economy - application - war and the current account, application - investment productivity and world real interest rates in the 1980s; taxation of foreign borrowing and lending; international labour movements - application - energy prices, global saving, and real interest rates; stability and the Marshall-Lerner condition. Part 2 Dynamics of small open economies: a small economy with many periods - application - when is a country bankrupt?; dynamics of the current account - Japan's 1923 earthquake; a stochasic current account model - application - Deaton's paradox, application - the relative impact of productivity shocks on investment and the current account; consumer durables and the current account; firms, the labour market and investment; trend productivity growth, saving and investment - a detailed example; speculative asset price bubbles, ponzi games and transversatility conditions. Part 3 The life cycle, tax policy and the current account: government budget policy in the absence of overlapping generations; government budget deficits in an overlapping generations model - generational accounting, application - do government budget deficits cause current account deficits?, application - overlapping generations and econometric tests of the Euler equation; output fluctuations, demographics and the life cycle - application - how are saving and growth related?; investment and growth - application - Feldstein and Horioka's saving-investment puzzle; aggregate and intergenerational gains from trade; public debt and the world interest rate - application - government debt and world interest rates since 1970; integrating the overlapping generations and representative-consumer models; dynamic inefficiency. Part 4 The real exchange

Maurice Obstfeld is Class of 1958 Professor of Economics at the University of California, Berkeley.

Kenneth Rogoff is Thomas D. Cabot Professor of Public Policy and Professor of Economics at Harvard University.

"This amazingly comprehensive book provides a lucid explanation of modernmacroeconomic theory and applies the theory to a wide range of internationalissues. For reference and classroom use, it sets a new standard in openeconomy macroeconomics. The use of boxes and applications in anadvanced graduate text such as this is unorthodox, but extremelyeffective." John Campbell, Otto Eckstein Professor of Applied Economics, Harvard University "This is a landmark treatment of dynamic, open-economy macroeconomics--the only kind of macroeconomics that matters any more." Paul Romer, Graduate School of Business, Stanford University