This chapter provides an introduction to global capital flows. It considers four types of flows: foreign direct investment, equity investment, bond finance, and commercial bank lending. It considers the determinants of these four types of capital flows. It takes up the issues of net versus gross flows, capital account liberalization, and the application of capital controls.

This chapters considers means by which countries can attract inward foreign direct investment and join global value chains. It develops a benefit–cost framework for hosting FDI. It considers a number of policy stances towards FDI and strategies for promoting domestic linkages. It briefly considers the global governance of multinational enterprises.

This chapter provides an introduction to exchange rates, including the nominal and real exchange rate. It describes and assesses the purchasing power parity model of exchange rate determination. It considers the role of hedging and foreign exchange derivatives. Appendices look at price levels and the PPP model and develop the monetary approach to exchange rate determination.

This chapter provides an overview of international economics and economic globalization. It considers current trends in international trade, international finance, and international production, the latter including foreign direct investment and migration. It introduces key concepts and terms, setting the stage for subsequent chapters.

This chapter provides an introduction to preferential trade agreements or regional trade agreements. It considers trade creation and trade diversion within a supply and demand framework of PTAs. It then summarizes the examples of the European Union, NAFTA, Mercosur, ASEAN and its AFTA, and the Trans-Pacific Partnership.

This chapter provides an introduction to economic growth and growth theory. It describes both the Solow growth model and new growth theory. It considers the role of human capital in growth processes, as well as trade and institutions. An appendix briefly describes the algebra of growth theory.

This chapter provides an introduction to monetary unions. It defines monetary unions and traces the history of the European Monetary Union. It assesses the EMU from the perspective of the theory of optimum currency areas. It then takes up the CFA franc zone and the Common Monetary Area in Africa.

This chapter provides an introduction to flexible exchange rates. It presents both a simple supply and demand model of exchange rate determination and the assets-based approach of the interest rate parity condition. It considers the role of interest rates and expectations in exchange rate determination. An appendix analyzes monetary policies and the nominal exchange rate.

This chapter provides an introduction to global monetary history and the International Monetary Fund. It presents recent monetary history from the gold standard forward. It discusses the operation of the IMF, including its response to a number of past crises. It then takes up the political economy of lending by the IMF and provides a general assessment of the institution.