International finance

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For the academic journal or financial magazine, see International Finance
(journal) and Global Finance (magazine).
International finance (also referred to as international monetary
economics or international macroeconomics) is the branch of financial
economics broadly concerned with monetary and macroeconomic interrelations
between two or more countries.[1][2] International finance examines the dynamics of
the global financial system, international monetary systems, balance of
payments, exchange rates, foreign direct investment, and how these topics relate
to international trade.[1][2][3]
Sometimes referred to as multinational finance, international finance is additionally
concerned with matters of international financial management. Investors
and multinational corporations must assess and manage international risks such
as political risk and foreign exchange risk, including transaction exposure, economic
exposure, and translation exposure.[4][5]
Some examples of key concepts within international finance are the Mundell–Fleming
model, the optimum currency area theory, purchasing power parity, interest rate parity,
and the international Fisher effect. Whereas the study of international trade makes use
of mostly microeconomic concepts, international finance research investigates
predominantly macroeconomic concepts.
The three major components setting international finance apart from its purely domestic
counterpart are as follows:

1. Foreign exchange and political risks.

2. Market imperfections.
3. Expanded opportunity sets.
These major dimensions of international finance largely stem from the fact that
sovereign nations have the right and power to issue currencies, formulate their own
economic policies, impose taxes, and regulate movement of people, goods, and capital
across their borders.[6]

See also[edit]
 Finance
 Global financial system
 International economics
 International monetary systems
 International trade

Notes and references[edit]

1. ^ Jump up to:    Gandolfo, Giancarlo (2002).  International Finance and
a b

Open-Economy Macroeconomics. Berlin, Germany:

Springer.  ISBN  978-3-540-43459-7.
 2. ^ Jump up to:    Pilbeam, Keith (2006). International Finance, 3rd Edition.
a b

New York, NY: Palgrave Macmillan.  ISBN  978-1-4039-4837-3.

3. ^ Feenstra, Robert C.; Taylor, Alan M. (2008).  International
Macroeconomics. New York, NY: Worth Publishers. ISBN 978-1-
4292-0691-4.
4. ^ Madura, Jeff (2007).  International Financial Management: Abridged
8th Edition. Mason, OH: Thomson South-Western.  ISBN  0-324-
36563-2.
5. ^ Eun, Cheol S.; Resnick, Bruce G. (2011). International Financial
Management, 6th Edition. New York, NY: McGraw-
Hill/Irwin.  ISBN  978-0-07-803465-7.
6. ^ Eun, Cheol S.; Resnick, Bruce G. (2015). International Financial
Management, 7th Edition. New York, NY: McGraw-
Hill/Irwin.  ISBN  978-0-07-786160-5.

External links[edit]
 Historical documents on international finance available on
FRASER
hide

General areas of finance

hnology

al finance

finance

nomics

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nagement

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management

l finance

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behavioral finance

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Categories: 
 International finance
 Financial economics
 Economic globalization
 Finance stubs
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