Study International Economics at Intermediate Leve

This review is not just a critique on each book, but give you a framwork on what's the international economics told us, if you can learn that from the words, it's my pleasure~~~

Dornbush&Fischer(6E) CH6 is a good introduction to IS-LM-BP model (also called Mundell-Fleming model), but there's nothing about the exchange rate determine theory. So it views exchange rate as a given variable. If you want to learn the policy effects in an open economy very quickly, you can just study this charpter.

Blanchard(3E) CH18-CH20 also analyzes the open economy. In CH18, it teaches us some basic knowledge about the open economics, and then in CH19, it proposes the open economics IS curve that including the net export element thus including the exchange rate. At last, in CH20 it puts the open economy IS and LM curve together and analyzes the macroeconomic policy effects through it. The most differences between this book and Dornbush&Fischer(6E) are, first it give a more deeply introduction to the Mundell-Fleming model, second it puts the interest parity condition(short for IPC) as the exchange rate determine theory in short run.

But Blanchard's book also has two defects, first it doesn't told us the exchange rate determine theory in the long run, which is very important for policy analysis, because the long-run exchange rate is also the expect exchange rate, an essential part of the IPC; second it doesn't told us the long-run policy effects, because the Mudell-Fleming model is focus on the short-run.

So, if you want to complete your knowledge system of international macroeconomics, you have to study the Krugman&Obstfeld(6E). This book, from CH12 to CH17, gives a thorough discussion about the exchange rate determine theory both in the short-run and the long-run. And it also puts out an AA-DD model used to analyze both short-run and long-runthe policy effects. Keep in mind that the AA-DD model is just an simple edition of Mundell-Fleming model (thus "the IS-LM model in open economy"), so if you want to extend this analysis, you have to read the Blanchard(3E). In summary, the Krugman&Obstfeld and Blanchard are good complements for each other.

Note, Mishkin(7E) is also a good intermediate macroeconomics textbook, but it focuses on the monetary and financial market economics, so chapters about open economy in this book are not good at theory introduce, but at the international economics policy illustration(in CH21). So skip this book if your time is limited.

At last, there's another important part of international economics, maybe we should call it "international economic policy". For this part, just grasp the Krugman&Obstfeld(6E) and read from CH18 to CH22.