156-0335/04 – Monetary Policy of Open Economy (MPOE)

Gurantor departmentDepartment of Applied EconomicsCredits4
Subject guarantorprof. Ing. Lumír Kulhánek, CSc.Subject version guarantorprof. Ing. Lumír Kulhánek, CSc.
Study levelundergraduate or graduateRequirementChoice-compulsory
Study languageCzech
Year of introduction2011/2012Year of cancellation
Intended for the facultiesEKFIntended for study typesFollow-up Master
Instruction secured by
LoginNameTuitorTeacher giving lectures
KUL20 prof. Ing. Lumír Kulhánek, CSc.
Extent of instruction for forms of study
Form of studyWay of compl.Extent
Full-time Credit 2+1

Subject aims expressed by acquired skills and competences

Student will be able: - to interpret/answer all questions related to monetary policy realised in the open economy, its theoretical basis and practical implementation; - to explain bilateral linkages between GDP, exchange rate, inflation rate, money market interest rate etc.; - to characterise particular exchange rate regimes; - to critically assess the European process of monetary integration; - to make conclusions concerning practical monetary policy implementation in the open economy and its impact on the economy (and other macroeconomic policies).

Teaching methods

Project work


TThe course follows the course "Monetary Policy". The content is focused on the monetary aspects of open economy macroeconomics, the classification of exchange rate regimes and the impact on monetary policy, the conduct of monetary policy in the open economy, the Balassa-Samuelson model and effect, the theory and history of monetary integration etc.

Compulsory literature:

GRAUWE, Paul de. Economics of Monetary Union. 9th ed. Oxford: Oxford University Press, 2012. ISBN 9780199605576. KRUGMAN, P. R., M. OBSTFELD and J. MELITZ. International Economics: Theory and Policy. 9th ed. Harlow: Pearson Addison-Wesley, 2012. ISBN 978-0-273-75409-1.

Recommended literature:

COPELAND, Laurence. Exchange Rates and International Finance. 5th ed. Harlow: Pearson Education, 2008. ISBN 978-0-273-71027-1. GRAUWE, Paul de. Exchange Rates and Global Financial Policies. Singapore: World Scientific, 2014. ISBN 978-981-4513-18-0. MISHKIN, F. S. The Economics of Money, Banking, and Financial Markets. 10th ed. Harlow: Pearson, 2012. ISBN 978-0-273-76585-1.

Way of continuous check of knowledge in the course of semester


Other requirements

Students must write a team project and to present and defend it during seminars.


Subject has no prerequisities.


Subject has no co-requisities.

Subject syllabus:

1. Introduction. 2. Exchange rate regimes, fixed and floating regimes. 3. Currency board. 4. Dollarization. 5. Exchange rate theory, interest rate parity. 6. Output and exchange rate in the short run, DD-AA model. 7. DD-AA model and fixed exchange rate regime, interventions. 8. Law of one price, purchasing power theory, Balassa-Samuelson model. 9. International monetary system, Bretton-Woods system. 10. European monetary integration. 11. Exchange Rate Mechanism II. 12. Optimum currency area theory - traditional version. 13. Optimum currency area theory - modern version. 14. World financial crisis, originate-to-distribute and originate-to-hold model.

Conditions for subject completion

Full-time form (validity from: 2011/2012 Winter semester)
Task nameType of taskMax. number of points
(act. for subtasks)
Min. number of points
Exercises evaluation Credit 100 (100) 51
        Seminární práce Project 35  18
        Písemný test Written test 65  33
Mandatory attendence parzicipation:

Show history

Occurrence in study plans

Academic yearProgrammeField of studySpec.ZaměřeníFormStudy language Tut. centreYearWSType of duty
2013/2014 (N6202) Economic Policy and Administration (6202T010) Finance P Czech Ostrava 1 Choice-compulsory study plan
2013/2014 (N6202) Economic Policy and Administration (6202T010) Finance (00) Finance P Czech Ostrava 1 Choice-compulsory study plan
2012/2013 (N6202) Economic Policy and Administration (6202T010) Finance (00) Finance P Czech Ostrava 1 Choice-compulsory study plan
2011/2012 (N6202) Economic Policy and Administration (6202T010) Finance (00) Finance P Czech Ostrava 1 Choice-compulsory study plan

Occurrence in special blocks

Block nameAcademic yearForm of studyStudy language YearWSType of blockBlock owner