The aim is to create worksheets that are dedicated to teaching selected topics of financial mathematics at the elementary school. The thesis is focused on financial products and is based on The Framework Educational Programs for Elementary Schools.

Diploma thesis deals with the US external economic balance, particularly balance of payments, international investment position, indebtness and the dollar exchange rate. The first part includes the theoretical approach to external economic balance and related terms. Furthermore, I focus on the status of current and financial account of the United States in detail. Here I evaluate the balances of BOP parts and search for the explanation of this situation. I also focus on international investment position of the United States, the development of foreign direct investment and debt indicators. The work also contains a detailed analysis of the U.S. balance of payments for the years 2004 - 2008. The last section is a treatise on the history of the dollar, development of its rate, expected future developments and relationships with U.S. major trading partner, China.

The master thesis emphasizes the economic relations between China and the United States. It gives an overview and theoretical background support on the significance of contemporary the economic relations between countries in today`s globalized era. Secondly, it analyzes how the theoretical background of economic and trade relations affect the empirical case study of the economic relations between China and the USA. The goal is to show how the economic and trade relations between China and the United States influence each other`s economies and what is the effect of such relations on the economic performance of both countries. More precisely, in order to answer the question above, the master thesis deals with complex analysis in regard of historical perspective concerning the economic relations between these countries, their ongoing cooperation in terms of balance of payments, the current and potential issues what both countries face and the existing challenges for the future. In order to complete the analysis and answer the research question, list of various sources will be used, starting from academic journals, books, literature reviews, reports from the World Trade Organization (hereafter WTO), reports from the respective countries on their economic progress, data available from the ministries of trade of respective countries and other sources related to the analysis of the contemporary economic and trade relations between the countries participating in the global economy.

The main objective of this thesis is to provide an overview of developments and issues in the context of the European debt crisis. Euro as a central aspect of Economic and Monetary Union has a major impact on convergence and existing systemic problems of the EU. The first chapter provides a brief description of the european integration since World War II in the context of Economic and Monetary union. The second chapter defines the concept of nominal and real convergence and dedicates closer to the Maastricht convergence criteria and the Stability and Growth Pact, which was the result of efforts towards closer fiscal coordination. Moreover, it summarizes the main causes of the financial crisis and subsequently analyses its impact on the EUR/USD currency pair. The fourth chapter focuses on the systemic weaknesses of the eurozone with an emphasis on the imbalance in the current account balance of payments. The last chapter summarizes the approaches to solving the debt crisis assuming that current steps taken by eurozone leaders in cooperation with the governments of intebted members fail.

Dans cette thèse, nous analysons la question de l’ajustement réel entre des économies de niveau de développement diffèrent au sein d’une union monétaire. Dans ce, les deux économies représentées – une économie développée et une économie émergente – ne peuvent utiliser le taux de change nominal pour s’ajuster à des chocs asymétriques. Pour étudier les conditions de l’ajustement réel entre ces pays, nous prenons en compte les flux d’investissements directs. En effet, ce type d’investissement a profité largement aux économies d’Europe de l’est non membres de le zone euro. Pour étudier cette question, nous utilisons un modèle DSGE (« dynamic stochastic general equilibrium ») permettant de micro fonder les décisions d’investissement direct sur l’hétérogénéité productive des firmes. Nous complétons la littérature existante dans ce domaine en privilégiant deux aspects : (1) les investissements directs peuvent être à la fois des substituts aux importations ou une solution retenue par les firmes pour réduire leurs coûts de production afin de réimporter des biens sur leur marché national et (2) les pays sont traités de manière asymétrique, afin de relier leur niveau de développement aux types de variétiés de biens (non échangeables, exportables, délocalisables). Nous évaluons de quelle manière ces éléments affectent la dynamique des économies à un choc de productivité asymétrique. De manière générale, on observe que les économies vont répondre de manière différente au niveau macroéconomique en fonction de leur structure productive. En résumé l’analyse proposée dans cette thèse montre que des différences structurelles et la possibilité pour les pays de s’engager dans des investissements directs détermine de manière critique la réaction des variables macroéconomiques à des chocs asymétriques. / In this thesis we analyse a problem of the real economic adjustment between two countries, one of which is an emerging market and the other is a developed economy. When they form a monetary union the only possible adjustment to asymmetric shocks transmitted internationally is through the real variables. We take into account existing asymmetries in the foreign direct investment (FDI) intensity and FDI relations. The issues of FDI and differences in the FDI intensity are real aspects of functioning of economies and relations between them. They reveal some problem from the macroeconomic perspective. However, the problem relates also to microeconomic foundations. The given trade and FDI relations between countries depend on decisions of firms that are heterogeneous. To study the effect of plant delocalization and FDI on output fluctuations between two countries we use a framework that accounts for all this issues, that means dynamic stochastic general equilibrium (DSGE) models with heterogeneity in firm productivity. We add a new dimension to the existing literature on DSGE models with heterogeneous firms. First, we complete goods market with a new segment of production, namely products offered by multinationals which produce abroad and export back to their economy of origin. Second, we account for asymmetries in the FDI intensity and differences in production structures that occur between two economies forming a monetary union. Summing things up, the analysis allows us to state that the real aspects of economy functioning, such as trade connections between countries and differences in production structures, determine economic performance and behaviour of economies in terms of output fluctuations.

Los desequilibrios externos son un tema relevante porque nos permite conocer sobre las gestiones del país y las políticas que se han aplicado anteriormente hasta la actualidad. El estudio de la sostenibilidad de la cuenta corriente es un indicador que ayuda a los inversionistas y a los formuladores de políticas dado que brindan señales de opción inversión en el país o si es necesario realizar nuevos cambios en las políticas económicas del país. En este estudio, aplicamos el enfoque realizado por Bohn (2007), en el que se incluye a los activos internacionales netos. Además, se evalúa de manera conjunta los activos internacionales netos con la cuenta corriente, el cual permite obtener una visión más amplia y menos restrictiva respecto a los enfoques tradicionales dado que es un análisis multivariado. El período de investigación es de 1992-2020, el cual se divide en 2 subperiodos: periodo 1 (1992-2008) y período 2 (2004-2020). El resultado de la investigación identificó en el primer período (1992-2008) una sostenibilidad débil de la cuenta corriente según el enfoque tradicional, mientras que mediante el método de Bohn, no existe sostenibilidad en dicho período. Por otro lado, en el segundo período (2004-2020) los resultados indican la presencia de la sostenibilidad de la cuenta corriente en el enfoque tradicional y en el enfoque de Bohn. / External imbalances are a relevant issue because they allow us to learn about the country's efforts and the policies that have been applied previously until now. The study of the sustainability of the current account is an indicator that helps investors and policy makers since they provide signals of investment option in the country or if it is necessary to make new changes in the country's economic policies. In this study, we apply the approach taken by Bohn (2007), which includes net international assets. In addition, net international assets are jointly evaluated with the current account, which allows a broader and less restrictive view to be obtained with respect to traditional approaches since it is a multivariate analysis. The research period is 1992-2020, which is divided into 2 sub-periods: period 1 (1992-2008) and period 2 (2004-2020). The result of the research identified in the first period (1992-2008) a weak sustainability of the current account according to the traditional approach, while using the Bohn method, there is no sustainability. On the other hand, in the second period (2004-2020) the results indicate the presence of the sustainability of the current account in the traditional approach and in the Bohn approach. / Trabajo de investigación

Die Arbeit setzt sich das Ziel, den Ursache-Wirkungs-Zusammenhang zwischen den zahlungsbilanzrelevanten Transaktionen aufzudecken. Dieses Vorhaben legt eine zweigeteilte Analyse der Zahlungsbilanz nahe: Es wird zunächst über die Buchungsmechanik der nach ihrem wirtschaftlichen Charakter unterschiedenen internationalen Transaktionen aufgeklärt und anschließend folgt eine fundierte Zahlungsbilanzdiskussion, die Klarheit in die Ursache-Wirkungs-Beziehung bringt. Grenzüberschreitende Transaktionen werden eingeteilt in (reine) Finanztransaktionen und Leistungstransaktionen. Somit bezieht sich die Kausalitätsfrage auf den Zusammenhang zwischen diesen beiden Transaktionsarten. Das Ergebnis verkehrt gängige Vorstellungen über die Wirkungsrichtung ins Gegenteil und lautet: Die Leistungsbilanz bestimmt die Kapitalbilanz.:Abbildungsverzeichnis V Abkürzungen VII 1. Einleitung 1 1.1 Die Problemstellung 1 1.2 Zum Kausalitätsbegriff 8 2. Die Buchungsmechanik 15 2.1 Die Entstehung der Salden in der Zahlungsbilanz 15 2.1.1 Die Erfassung reiner Finanztransaktionen 16 2.1.2 Die Erfassung von Leistungstransaktionen 24 2.1.3 Die praktische Erfassung der Zahlungsbilanzbuchungen 29 2.2 Die Bedeutung der Salden 32 2.2.1 Die Wirkung reiner Finanztransaktionen 33 2.2.2 Die Wirkung von Leistungstransaktionen 40 2.2.3 Leistungsbilanzüberschüsse und (Netto-) Kapitalexporte 46 3. Der Wirkungszusammenhang 49 3.1 Zahlungsbilanzdiskussionen 49 3.1.1 Eugen von Böhm-Bawerk 50 3.1.2 Wolfgang Stützel 56 3.1.3 Die aktuelle Zahlungsbilanzdiskussion: Target2-Salden 64 3.2 Ursachenhypothesen 71 3.2.1 Die Kapitalbilanz bestimmt die Leistungsbilanz 72 3.2.2 Die Leistungsbilanz bestimmt die Kapitalbilanz 80 3.2.3 Lohnstückkosten und Leistungsbilanzsalden 103 4. Resümee 112 Literaturverzechnis 116

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The <u>first essay</u> [“Twin Deficits and Free Lunches: Macroeconomic Outcomes In Anticipation of Foreign Aid”] concerns itself with situations in which private agents anticipate a future windfall (free lunch) that will help service the debt resulting from a present fiscal expansion (implemented via a temporary tax cut). Such expectations of a windfall can arise in the context of natural resource discoveries or, more interestingly, due to perceptions by agents in “too important to fail” countries that will be bailed out through higher foreign aid or debt relief. We employ an overlapping generations model featuring credit constraints to study the real effects of such free lunch expectations in a small open economy, drawing contrasts with the standard tax and money finance closure rules. The model is solved analytically and shows that anticipated aid is equivalent to current aid when agents have perfect foresight, so that a temporary tax cut is seen as permanent. Accordingly, agents raise their consumption and indebtedness (at the expense of future generations) by an amount that is an increasing function of their “impatience” (subjective rates of time preference plus probability of death). A worsening of the current account obtains (twin deficits) across a range of plausible closure rules, including those featuring money finance. The introduction of credit constrained households (we study the variant where myopic agents spend their current disposable incomes) does not alter the basic result in the case of full aid finance, but does matter for mixed tax-aid regimes, in more complex settings where agent expectations and donor promises on aid diverge, and when governments face borrowing constraints so that the timing of aid delivery matters. The <u>second essay</u> [“The Role of Domestic Debt in Economic Growth: An Empirical Investigation For Developing Economies”] focuses on the remaining source of government financing, i.e. domestic debt, and the role it can play in mobilizing private savings, facilitating credit intermediation in higher risk settings (i.e. serving a “collateral” function on bank balance sheets), developing financial markets and supporting economic growth in general. To investigate this question empirically, we set up a new domestic debt database covering about 100 developing economies, going back three decades to 1975; explore Granger causality links between domestic debt and key macroeconomic and institutional variables; and estimate the growth impact of domestic debt using panel regressions, allowing for non-linear effects. Domestic debt, as a share of GDP is found to exert a significant positive impact on economic growth, with potential channels including domestic savings mobilization, provision of risk-insurance on banks’ balance sheets; and greater institutional accountability of the state to its citizens. Although this result countervails more established arguments against domestic debt (i.e. that it leads to crowding out and banks to become lazy), there is some evidence that above a ratio of 35 percent of bank deposits, domestic debt does begin to undermine economic growth. The growth payoff also depends on debt quality, with higher payoffs observed for positive interest-rate bearing marketable debt issued to nonbank sectors. The <u>third and final essay</u> [“Why Do Banks in Developing Economies Hold Domestic Government Securities?”] explores demand-side determinants of domestic debt, by focusing on commercial bank holdings of government paper, discriminating carefully between voluntary factors (such as mean-variance portfolio optimization) and statutory ones (cash reserve and capital adequacy requirements). The analysis is made possible by the construction of a dataset on government and private returns (real and nominal) for almost 600 banks from 70 emerging and low-income economies, spanning the (pre-Basel II) period 1995-2005. A battery of structural cross-section regressions indicates that banks’ portfolio decisions are at least as significantly influenced by mean-variance considerations as regulatory factors: the actual portfolio share of government securities (λ) responds intuitively, and sizably, to variations in the moments of the distributions for government and private returns as well as in the minimum-variance portfolio share (λ*). Higher cash reserve requirements tilt portfolios away from government securities toward riskier private lending, while higher capital adequacy requirements work the other way. The association between actual portfolios and the identified determinants is noticeably weaker at lower ends of the λ distribution, suggesting the domination of non-CAPM factors in those contexts.

This thesis analyses whether the concept of monetary sovereignty evolves under the impact of globalization and financial integration, and provides a framework for assessing what this implies. Thereby, this thesis contributes to a better understanding of both the contemporary exercise of sovereign powers in monetary and financial matters and of the driving forces behind the evolution of international law in this field. As elaborated in chapter 1, the contemporary concept of monetary sovereignty proposed by this thesis is not static but dynamic in nature. Due to the dual nature of sovereignty as a concept having not only positive but also important normative components, monetary sovereignty cannot become eroded under the impact of legal and economic constraints. Chapter 2 examines the ongoing hybridization of international monetary law arising from changes in the sources of this complex body of law, from the unsuitability of the categories of ‘hard’ and ‘soft’ law for characterizing all normative evolutions in this field, and from the rise of private and transnational monetary law. Chapter 3 scrutinizes the phenomenon of exchange rate misalignment under monetary and trade law. Intrinsically related, it assesses which aspects of the IMF’s legal framework should be reformed in order to tackle contemporary challenges to the stability of the international monetary system, such as global current account imbalances. Chapter 4 analyses the increasing regionalization of monetary sovereignty. It argues that, to the extent that transferring sovereign powers to a monetary union is what provides a state’s population with maximum monetary and financial stability, the underlying transfers are not a surrender of monetary sovereignty, but its effective exercise under the form of cooperative sovereignty. Finally, chapter 5 assesses the implications of the contemporary concept of monetary sovereignty proposed herein for the reorganization of the international financial architecture in the wake of the Great Recession.