Preface; Part I. Introduction: 1. An agenda; Part II. Modeling an Open economy: 2. The structure of the model; 3. Solving the model; 4. Comparative statics: goods-market disturbances; 5. Comparative statics: asset-market and compound disturbance; 6. Dynamics under pegged and flexible exchange rates; Part III. Extending the Model: 7. Claims, caveas, and simplifications; 8. On money, income, and insulation; 9. Expectations, speculation, and exchange-rate stability; 10. On the specification of fiscal policy; Part IV. Analyzing Interdependence: 11. A two-country model; 12. Similarities and symmetries in goods and asset markets; 13. Comparative statics in the two-country model; Part V. The Theory of Financial Integration: 14. Dimensions of integration; 15. Market integration, interdependence, and monetary policy under pegged exchange rates; 16. The analytics of a monetary union; 17. Market integration, interdependence, and fiscal policy under pegged exchange rates; 18. Fiscal policy in a monetary union; Appendixes; Glossary; Index.