International Finance: Theory and Policy

by Paul R. Krugman and Maurice Obstfeld

International Finance: Theory and Policy by Paul R. Krugman and Maurice Obstfeld is a comprehensive textbook that provides a thorough understanding of international finance and the global economy.

The book covers essential theories of exchange rates, trade, and global financial markets, offering a detailed explanation of how these elements interact within the broader economic system.

It discusses the determinants of exchange rates, such as interest rates, inflation, and government policies, and how these factors influence international investment and trade.

The authors also delve into the role of financial markets, including the international capital market, and how they facilitate the movement of capital across borders.

A key feature of the book is its analysis of the relationship between monetary and fiscal policy in an open economy, providing a deeper understanding of how countries manage their economic policies within a global context.

Krugman and Obstfeld also explore the impact of exchange rate regimes—floating, fixed, and pegged rates—on economic stability and growth. Additionally, the book addresses global financial crises, offering insights into their causes and how they affect exchange rates and international trade.

Ideal for students and professionals alike, International Finance equips readers with the necessary tools to analyze and understand the complexities of global financial markets and exchange rate dynamics.