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International Finance: Theory and Policy, Global Edition (11e)

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For courses in International Finance.

A balanced approach to theory and policy applications

International Finance: Theory and Policy provides engaging, balanced coverage of the key concepts and practical applications of the discipline. An intuitive introduction to international finance theory is followed by detailed coverage of policy applications. With this new 11th Edition, Global Edition, the author team of Nobel Prize-winning economist Paul Krugman, renowned researcher Maurice Obstfeld, and Marc Melitz of Harvard University continues to set the standard for international finance courses.

Product details
Published date
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Pearson Higher Ed USA
Table of contents
  • 2. National Income Accounting and the Balance of Payments
  • 3. Exchange Rates and the Foreign Exchange Market: An Asset Approach
  • 4. Money, Interest Rates, and Exchange Rates
  • 5. Price Levels and the Exchange Rate in the Long Run
  • 6. Output and the Exchange Rate in the Short Run
  • 7. Fixed Exchange Rates and Foreign Exchange Intervention
  • 8. International Monetary Systems: An Historical Overview
  • 9. Financial Globalization: Opportunity and Crisis
  • 10. Optimum Currency Areas and the Euro
  • 11. Developing Countries: Growth, Crisis, and Reform
  • Postscript to Chapter 9: Risk Aversion and International Portfolio Diversification
New to this edition

About the book


Relay recent developments in the theoretical and practical sides of international finance


 Additional coverage of relevant topics and events including the impact of the Automobile Intra-Industry Trade within the Association of Southeast Asian Nations-4 (ASEAN-4), namely Indonesia, Malaysia, the Philippines, and Thailand between 1998–2002; the origin of tariff-rate quotas and its practical application with oilseeds, noting that tariff quotas for these goods are more often applied than those for the traditionally protected products, like dairy or sugar; the role of negative interest rates in unconventional monetary policy; and the increasingly important role of emerging market economies in driving global growth.

 Box describes China’s offshore market and the relationship between its onshore and offshore exchange rates (Chapter 3).

 Box on the role of invoice currencies in exchange-rate pass-through and discussion of the role of negative interest rates in unconventional monetary policy (Chapter 6).

 Box describes the dangers of deflation (Chapter 8).

 Box on Brexit, specifically the process through which Britain is likely to leave the EU (Chapter 10).

 Coverage of the key role of commodities in developing-country growth, and the commodity “super cycle” (Chapter 11).


Pearson MyLabTM Economics not included. Students, if MyLab is a recommended/mandatory component of the course, please ask your instructor for the correct ISBN and course ID. MyLab should only be purchased when required by an instructor. Instructors, contact your Pearson representative for more information.

 Math Review ExercisesPearson MyLab Economics now offers a rich array of assignable exercises covering fundamental math concepts geared specifically to principles and intermediate economics students. Aimed at increasing student confidence and success, the new math skills review Chapter R is accessible from the assignment manager and contains over 150 graphing, algebra, and calculus exercises for homework, quiz, and test use. Offering economics students warm-up math assignments, math remediation, or math exercises as part of any content assignment has never been easier!

 HTML5 Player. In addition to matching the Flash player’s support of Accessibility requirements, the HTML5 player has a new “Show Work” feature to allow students to enter text either from a keyboard or stylus and to draw freehand on different backgrounds, such as a coordinate graph, with multiple fonts and colors. Students can also continue to upload images such as phone-photos of handwritten work. Printing enhancements include:

o a more pen-and-paper-friendly layout of exercises

o the ability for instructors to choose whether to print the header; to include an honor statement; and to print with answers inline, after each question, or on a separate sheet.

Features & benefits
The text’s unified structure presents a balance of theoretical and practical coverage of international finance. Chapters on core theory are followed by a series of application chapters that confront policy questions using the newest empirical work, data, and policy debates. This structure enables students to grasp theoretical concepts and then see those same concepts in action, aiding retention and highlighting the relevance of course material. Highlights include:
  • A unified model of open-economy macroeconomics that provides students with a cohesive approach to the theory, based on an asset-market approach to exchange rate determination with expectations in a central role.
  • A discussion of the international monetary experience that stresses the idea that different exchange rate systems lead to different policy coordination problems.
  • An emphasis on the potential substitutability of international trade and international movements of factors of production, featuring an analysis of international borrowing and lending as intertemporal trade--the exchange of present consumption for future consumption.
Give students learning tools to master course material
  • Learning Goals list essential concepts so students understand what they need to take away from each chapter.
  • Case Studies illustrate theory using real-world applications and provide important historical context.
  • Special Boxes offer vivid illustrations of points made in the text, including the role of currency swap lines among central banks, and the rapid accumulation of foreign exchange reserves by developing countries.
  • 200+ Captioned diagrams reinforce discussions in the text and help students in reviewing the material.
  • Summary and Key Terms. Each chapter closes with a summary recapping the major points to aid student review of the material.
Student supplements