Preface -- Introduction -- The basic intertemporal model -- Capital markets imperfections -- Intertemporal prices -- Non-tradable goods and relative prices -- The basic monetary model -- The monetary approach to the balance of payments -- Temporary policy -- Sticky prices -- Interest rate policy -- Optimal fiscal and monetary policy in the open economy -- Optimal exchange rate regimes -- Real anchors -- Stopping high inflation -- Capital inflows -- Dollarization -- Balance of payment crises -- Financial crises.