Universitat Internacional de Catalunya
A Firm's Economic Environment
Other languages of instruction: English, Spanish
If the student is enrolled for the English track then classes for that subject will be taught in the same language.
Teaching staff
By appointment. In order to make an appointment, please request one by writing to: sourzay@uic.es
Introduction
The course looks at how goods, services and productive resources move across borders and shape the global economy. Starting from the core models of open-economy macroeconomics, students will learn to assess the effect of economic policy decisions in interconnected economies and to make sense of events such as currency crises or deindustrialisation.
Empirical work is central to the course: students will use official databases and economic policy documents to connect theory with real evidence. The aim is that they can read and interpret economic data with judgement of their own.
Language of instruction. Group A is taught in English and group C in Catalan. Both groups follow exactly the same programme, the same criteria and the same standard.
Teaching staff. Dr Sergi Urzay Gómez (sourzay@uic.es). Office hours by appointment, arranged by email.
Pre-course requirements
It is advisable, but not necessary, to have passed Macroeconomics 1.
Objectives
1. Analyse the movement of goods, services and factors of production in an open economy.
2. Apply the Mundell-Fleming model to assess the effect of fiscal and monetary policy in open economies.
3. Understand exchange rate adjustment mechanisms and the anatomy of currency crises.
4. Work with official economic data sources (FRED, UN Comtrade and Eurostat) and with economic policy documents.
5. Interpret empirical results and connect them with the theoretical models of the course.
Competences/Learning outcomes of the degree programme
- 08 - To understand how leading world economies work, their institutions and interconnections.
- 17 - To be familiar with the mathematical models used to describe financial phenomena.
- 19 - To analyse quantitative financial variables and take them into account when making decisions.
- 24 - To be able to carry out a financial, social and historical analysis of the environment in which a company operates.
- 31 - To develop the ability to identify and interpret numerical data.
- 35 - To analyse time series.
- 41 - To be able to descriptively summarise information.
- 42 - To be able to empirically analyse financial phenomena.
- 45 - To be able to work with academic papers.
- 59 - To skilfully use software and ICTs.
Learning outcomes of the subject
- Understand and apply the Mundell-Fleming model in real economic policy settings.
- Analyse the effects of exchange rate adjustments and currency crises.
- Read and interpret economic policy documents and research articles.
- Obtain, visualise and interpret economic data from official sources.
Syllabus
Block 1 — The open economy
- Balance of payments: current account and capital account
- The small open economy: saving, investment and net exports
- Nominal and real exchange rates; purchasing power parity
- Trade policy in an open economy
Block 2 — The Mundell-Fleming model
- IS-LM in an open economy
- Monetary and fiscal policy under fixed and floating exchange rates
- The trilemma: real cases and the limits of the model
Block 3 — Exchange rates: systems and crises
- Exchange rate systems: from the gold standard to floating; monetary unions
- Currency crises: first, second and third generation models
- Vulnerability indicators and early warning signs
Practical sessions
Each theory block is followed by a practical session built on a real empirical case:
- P1 — The China shock: trade and the labour market. (Autor, Dorn and Hanson, 2025, Washington Center for Equitable Growth)
- P2 — The same shock, two regimes: the Great Recession in Europe. (Darvas, 2018, Bruegel)
- P3 — Currency crisis: the anatomy of a collapse. (Eichengreen, Rose and Wyplosz, 1995)
Session calendar
Tuesdays and Thursdays 10.15–12.00.
Class — Date — Content
1 — 29 October — Open economy (1)
2 — 3 November — Open economy (2)
3 — 5 November — Open economy (3)
4 — 10 November — Open economy (4)
5 — 12 November — Practical 1 — The China shock
6 — 17 November — Mundell-Fleming (1) · P1 verification test
7 — 19 November — Mundell-Fleming (2)
8 — 24 November — Mundell-Fleming (3)
9 — 26 November — Practical 2 — The same shock, two regimes
10 — 1 December — Exchange rates (1) · P2 verification test
11 — 3 December — Exchange rates (2)
12 — 10 December — Practical 3 — Currency crisis
13 — 15 December — Exchange rates (3): course synthesis · P3 verification test
14 — 17 December — Revision and practice exercises
Content may vary depending on the needs and pace of the group.
Teaching and learning activities
In person
The course combines lectures and in-person practical sessions. Lectures are given entirely on the blackboard, with the emphasis on building economic mechanisms step by step; audiovisual support is kept for specific items. Classes are based on understanding and analysis rather than memorisation. Steady work throughout the semester is encouraged.
Each theory block is followed by a practical session in which the lecturer presents a real empirical case, built from a reference document and a database, and works through it in class following exactly the steps students will later follow themselves (reaching the sources, downloading the data and building the figures) with a different case. After that session, students prepare an individual submission at home. At the start of the following session there is a short verification test on their own work. The course closes with a revision session of analytical and theoretical exercises, mirroring the final exam.
Attendance. A minimum attendance of 70% of the sessions is required.
Classroom rules. The use of mobile phones and laptops is completely forbidden in class. Notes are taken on paper (a notebook or pad, with a pen) or on a tablet; in the latter case, the tablet must stay flat on the desk and with the screen in the lecturer's view for the whole session, and no keyboard may be attached to it: a tablet with a keyboard counts as a laptop for all purposes. During verification tests and exams, all electronic devices must be put away and out of reach. The consequences of breaking these rules for the mark are set out in the assessment section.
Use of artificial intelligence tools. The conditions of use and the mechanism that evidences authorship are set out in the assessment section.
Evaluation systems and criteria
In person
Continuous assessment
Practical 1 (The China shock): submission 6% + verification test 4%: 10%
Practical 2 (The same shock, two regimes): submission 6% + verification test 4%: 10%
Practical 3 (Currency crisis): submission 6% + verification test 4%: 10%
Final exam: 70%
Minimum mark to pass the course: 5 out of 10.
Attendance: a minimum attendance of 70% of the sessions is required.
Final exam
The final exam is theoretical and applied and covers only the content of the lectures: it combines analytical exercises on the models with theory and application questions. The content of the practical sessions does not appear in the final exam; it is assessed only through the submissions and the verification tests.
Minimum mark in the final exam: 4 out of 10. If the final exam mark is below 4, the course is failed regardless of the continuous assessment mark, and the student must sit the resit exam.
How each practical works
Each practical is marked out of 10 points: the individual submission is worth up to 6 points and the verification test up to 4. The test is taken on paper at the start of the session following the practical (classes 6, 10 and 13), so as not to break the rhythm of the lecture: it lasts 10 minutes, plus the time to hand out and collect the papers (around 15 minutes in total, already accounted for in the planning of those three sessions). It is answered without the submission, without notes and without electronic devices. The questions are about the work handed in by the student — their data, their figures and their own interpretation of them — and include one simple question on the reference document of the practical. Not attending the verification test means a 0 for that practical.
Verification rule: if the test score is below 2 points out of 4, the total mark for the practical is capped at 4 out of 10, regardless of the mark for the submission. Work that its own author cannot explain does not evidence the learning being assessed.
Handing in the practicals
Each practical is handed in through Moodle with two compulsory files: (1) the memorandum in .docx format, which must follow strictly the structure and the format specification set out below, and (2) the workbook in .xlsx format, with three sheets: the raw data (as downloaded from the source, unmodified), the clean data (the working tables, built with live formulas and not with values pasted by hand) and the charts derived from them. No other file format is accepted — .pages, .odt, .numbers, CSV or PDF — nor links to documents hosted in the cloud. A submission missing either file, or not meeting the format specification, is marked 0 for the practical.
A workbook handed in without live formulas or without the raw data sheet does not allow the authorship of the work to be verified: in that case the mark for the practical is capped at 4 out of 10.
Deadlines: all practicals follow the same rhythm — the practical session is on a Thursday and submission closes the following Monday at 23.59 (P1: 16 November; P2: 30 November; P3: 14 December), with the verification test the next day, Tuesday. No submission is accepted after the deadline, under any circumstances; a practical not handed in on time is marked 0.
Structure and format of the memorandum
The report for each practical takes the form of an analysis memorandum, the document used to communicate economic conclusions in professional settings. It has a cover page and a maximum of two pages of content.
The cover page carries the institutional identification, the title and subtitle of the work, a bottom line box — the answer to the question of the practical in three or four lines, with at least one figure of the student's own — and the identification block: recipient, author (full name, student number and group), date, personal assignment, reference document, data sources and annex.
The content pages follow four numbered blocks: (1) introduction and purpose; (2) evidence, made up of three units of figure, caption and explanation; (3) mechanism, where the theoretical model of the corresponding block is named explicitly and tied to the data; and (4) conclusion and what to watch. Each block has a word limit set in the assignment, and the student must declare the word count in one line at the end of the document. Going over any of the limits is penalised.
The explanations of the figures must describe before interpreting and quote at least one number from the corresponding figure. Numerical claims in the text must correspond to numbers that appear in the student's own figures.
Format specification (a requirement, not a recommendation):
Page: A4 portrait, 2.5 cm margins on all four sides; header and footer 1.25 cm from the edge
Typeface: Times New Roman throughout, without exceptions
Body text: 11 points, line spacing 1.15, justified, 8 points space after, no first-line indent
Block headings: 11 points bold, numbered, with a bottom rule
Figure captions: 9 points, single spacing, justified
Header: 8.5 points: subject and practical on the left, "Analysis memorandum" on the right
Footer: 8.5 points: name and student number on the left, page number on the right
Cover page: no header or footer
Figures: 12 cm wide, centred, with no border and no internal title
Each caption must include the number, a descriptive title, the units, the period shown and the source. The title always goes in the caption and never inside the chart.
Classroom behaviour and the mark
Behaviour in class does not add points to the mark, but it can subtract them: conduct that interferes with the normal running of the class or with the work of others leads, at the lecturer's discretion, to the cancellation of the mark for the practical sessions (30% of the continuous assessment). For the purposes of the final mark, it will be as if the student had not done the practicals. Breaking the ban on mobile phones and laptops, or the rules on the use of the tablet, counts as inappropriate behaviour for these purposes.
Use of artificial intelligence tools
Support tools are allowed, but the student is responsible for fully understanding the work they hand in. The verification test is taken under controlled conditions and is the mechanism that evidences authorship and understanding.
Resit
The resit exam is worth 100% of the mark. The maximum mark attainable in the resit is 7 out of 10. Students who have not passed at the first sitting may take it.
Bibliography and resources
Required
- Mankiw, N. G. (2013). Macroeconomics (8th ed.). Macmillan Learning.
Further reading
- Krugman, P., Obstfeld, M., & Melitz, M. (2012). International Economics: Theory and Policy (9th ed.). Pearson. — especially for Block 3 (exchange rate systems and crises).
- Blanchard, O., Amighini, A., & Giavazzi, F. (2017). Macroeconomics (7th ed.). Pearson. — an alternative presentation of the open economy with a European emphasis.
Reference documents for the practical sessions
Each practical has a required reference document, with the assigned parts stated in the assignment. One of the questions in the verification test is about those parts.
- Practical 1. Autor, D. H., Dorn, D., & Hanson, G. H. (2025). How the China trade shock impacted U.S. manufacturing workers and labor markets, and the consequences for U.S. politics. Washington Center for Equitable Growth. — assigned parts: Overview and section 1, pages 2–8.
- Practical 2. Darvas, Z. (2018). Should central European EU members join the euro zone? Bruegel. — assigned passage: from the paragraph 'Ultimately, pre-2008 southern European developments…' to the one beginning 'Euro entry is therefore more of a political…', about 900 words.
- Practical 3. Eichengreen, B., Rose, A., & Wyplosz, C. (1995). Exchange Market Mayhem: The Antecedents and Aftermath of Speculative Attacks. Economic Policy, 10(21), 249–312. — assigned parts: section 1 ("Introduction"), pages 251–255.
Data resources
FRED (Federal Reserve Bank of St. Louis), UN Comtrade and Eurostat. Reaching the sources and downloading the data are worked through in class in each practical session.
The academic study behind Practical 1, for those who wish to go further: Autor, D., Dorn, D., & Hanson, G. (2013). The China Syndrome: Local Labor Market Effects of Import Competition in the United States. American Economic Review, 103(6), 2121–2168.