Course Syllabus

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The Economics of Money, Banking and Financial Markets 7th Edition, Addison Wesley, ... All Chapter references of the course outline below link up to this book.
Money and Banking - Course Syllabus

20.10.2004 21:15 Uhr

Professor Paul Bernd Spahn

Course Syllabus Monetary Policy and Financial Regulation (ILF, Winter 2004/2005) Course Description | Text and References | Methods of Instruction | Course Grade | Class Communication and Office Hours | Calendar and Course Outline | Downloads | Examinations | Make-up exams | Attendance Policy | Contact (Update: 3.10.2004)  

 

Course Description and Objectives The subjects of the course are monetary policy including the goals of monetary policy, the choice of policy instruments, the rule-versus-discretion debate, central bank credibility, arguments for and against central bank independence, and the interplay between the central bank and financial markets. The course looks specifically into the monetary policy process and the operation of the Federal Reserve and the European Central Bank, the regulation and supervision of the financial system, and the internationalization of financial markets. The course is designed to: Develop the student's understanding of the inner workings of the Central Banking system and of monetary policies in a domestic and international environment. Study the way in which money is created in a modern 21st century economy. It is the story of how the banking system "creates" money with the assistance of and under the influence of any nation's central bank, and the supranational European Central Bank. The influence a central bank wields over the ability of banks to create money, and the decisions it makes as to the level of money available in an economy is referred to as monetary policy. Therefore, the course discusses 1. the conduct of monetary policy, its goals an targets, and the tools available to the central bank. 2. the role the public and its government play in the process of the creation and circulation or flow of money. 3. central banking, international institutions, and international policy coordination. exchange-rate policies, international liquidity, and the limitations of monetary policy in a globalizing world. 4. the role of international institutions to preserve financial systemic stability. Top of page Texts and Other Reference Material Textbook: Frederic S. Mishkin, The Economics of Money, Banking and Financial Markets, 7th Edition, Addison Wesley, Boston et alii, 2004

(This is the basic textbook of the course. All Chapter references of the course outline below link up to this book. Please bring it to class every time, if possible.)

  World Wide Web – Resources Companion online resources of the main textbook can be found under: http://occawlonline.pearsoned.com/bookbind/pubbooks/mishkin_awl// There is also a widely used and extremely valuable site on "Global Macroeconomic and Financial Policy" by Nouriel Roubini: http://www.stern.nyu.edu/globalmacro/ Top of page Methods of Instruction Mainly instruction through lecturing, but also discussions, and questions & answers. The main objectives are to   Encourage class participation and develop arguing skills.   Read text, answer and understand quiz questions   Complete all assigned material and email to the instructor by the appropriate time and date   Apply efficient web based communication techniques and research methods. Top of page Course Grade There will be no mid-term, but one final exam. There will also be one quiz given during class; class participation is rated. Unless you have an adequate excuse you will receive a zero on any missed quizzes or exam. If you have a legitimate reason missing a quiz or exam, it is your obligation to give me a (full size) page with your name and the reason for your absence no later than one week after the absence (unless you are ill for more than that week). There will be one and only one make-up for all excused missed exams. This make-up will take place after the complete series of classes and will be a comprehensive oral examination.   Grade Component Component Weight   Class participation 20%   Quiz 10%   Contribution to the Monetary Policy game 20%   Final Exam 50%

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Money and Banking - Course Syllabus

20.10.2004 21:15 Uhr

  Class Communication and Office Hours All participants must have an email address. If you are not using it yet, it is important that you find out how to obtain one and how to use it. Part of the class discussion and announcements will be conducted through an email list. An important role for the list is for the students of the both classes to discuss the issues raised in the class. I may post comments and respond to your questions on the list. My email address is [email protected] can also send me personal questions about the course. Please put "ILF" at the beginning of the subject line in your message when sending a question or comment to me. Office hours are Thursdays, immediately after class, or Tuesdays from 10-12h (Zeppelinallee 29). (An e-mail to let me know if you are coming at a particular time is highly recommended.) Top of page Calendar and Course Outline

The course is scheduled at 2 - 4 p.m. every Thursday during the Winter term 2004/05. Normal semester rules of the Goethe University apply. October 21

1. INTRODUCTION AND OVERVIEW WHAT IS MONEY? (Historical review, definition of money, the banking-currency controversy, the role of money in economic theory.)

October 28

Reading: Chapter 3 2. MODERN CONCEPTS OF MONEY HOW IS MONEY DEFINED? (The creation of money and the money multiplier, money as seen from the demand and supply sides, an overview on financial innovations)

November 4

Reading : Chapters 15 3. UNDERSTANDING INTEREST RATES (1) WHICH ROLE ARE INTEREST RATES TO PLAY? (Measuring interest rates, achieving market equilibrium, money and interest rates risk and term structure)

November 11

Reading: Chapters 4-6 4. UNDERSTANDING INTEREST RATES (2)

November 18

(Room for quiz) 5. UNDERSTANDING EXCHANGE RATES (1) WHICH ROLE ARE EXCHANGE RATES TO PLAY? (The foreign exchange market, theories of exchange-rate determination)

November 25

December 2

Reading: Chapters 19 6. UNDERSTANDING EXCHANGE RATES (2) WHICH ROLE ARE EXCHANGE RATES TO PLAY? (The foreign exchange market, theories of exchange-rate determination) 7. DETERMINANTS OF THE MONEY SUPPLY, AND THE TOOLS OF CENTRAL BANKS (1) HOW CAN CENTRAL BANKING OPERATE? (Factors determining the money supply and the multiplier, the market for reserves and reserve requirements, open market operations)

December 9 December 16

Reading: Chapter 16, 17 8. DETERMINANTS OF THE MONEY SUPPLY, AND THE TOOLS OF CENTRAL BANKS (2) 9. CONDUCT OF MONETARY POLICY: OBJECTIVES AND STRATEGIES WHAT ARE THE GOALS OF MONETARY POLICY, AND HOW CAN THEY BE RENDERED OPERATIONAL? (The objectives, the policy strategies, effective policy coordination)

January 6 January 13

Reading: Chapter 18 NO CLASS 10. THE NEED FOR SYSTEMIC STABILITY WHY IS IT IMPORTANT FOR CENTRAL BANKS TO PRESERVE SYSTEMIC STABILITY? (Asymmetric information in financial markets, the role of financial intermediaries in reducing transaction costs, financial crises and their causes, policies to improve systemic stability without creating moral hazard).

January 20

Reading: Chapter 8 ILF WORKING GROUP ON MONETARY POLICY: MONETARY POLICY GAME Simulation of an ECB Board Meeting organized and prepared by participants.

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Money and Banking - Course Syllabus

20.10.2004 21:15 Uhr

January 27

11. THE INTERNATIONAL FINANCIAL SYSTEM (1): EVOLUTION AND STRUCTURE WHAT IS THE ROLE OF INTERNATIONAL FINANCIAL INSTITUTIONS? (Evolution of international financial markets, balance of payment financing, the gold standard, the Bretton-Woods System, the emergence of the euro-dollar market, the role of the IMF) Reading: Chapter 20, 21 12. THE INTERNATIONAL FINANCIAL SYSTEM (2): POLICIES AND INSTRUMENTS

February 3

HOW HAS THE INTERNATIONAL FINANCIAL SYSTEM PERFORMED? (The European Monetary System; the use of specific policy instruments: capital controls, "currency boards", "dollarization", exchange-rate targeting, monetary targeting, inflation targeting). A final word on the monetary policy strategy of the European Central Bank FINAL EXAM Top of page

February 10  

Downloads (Powerpoint presentations, past exam questions and quizzes) Powerpoint slides October 21, 2004 October 28, 2004 November 4, 2004 November 11, 2003 November 18, 2003 November 25, 2003 December 2, 2003 December 9, 2003 December 16, 2003 January 13, 2004 January 20, 2004 January 27, 2004 February 3, 2004 February 10, 2004

Lecture 1 Lecture 2 Lecture 3 Lecture 4 Lecture 5 Lecture 6 Lecture 7 Lecture 8 Lecture 9 Lecture 10 ILF Working Group (Policy game) Lecture 11 Lecture 12 Final Exam

Top of page Examinations Final Exam: February 10, 20055 Make-up exams Make-up exams will be allowed only in extenuating circumstances (failure of exams). Every effort should be made to take the test as scheduled. If the make-up exam is missed, you must inform the instructor immediately. Should you not contact the instructor, you may be dropped from the course with a "Failure". Top of page Attendance Policy It is expected that participants attend ALL classes. Top of page Contact Prof. Dr. Paul Bernd Spahn Goethe University, Frankfurt Zeppelinallee 29 60325 Frankfurt Tel.: +49 69 79828113 Fax : +49 69 79828970 Email: [email protected] Web : www.wiwi.uni-frankfurt.de/professoren/spahn/ Top of page  

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