Download ECON 4111-004 Money and Banking

Syllabus
The Ec o nomics of Money and Banking
Instructor:
office:
phone:
office hrs:
~<zrn, "1';17~007
Dan Zuchegno
Econ. 309
492-6875
Mon.
3:00 - 4:00
Wed. 11:00 - 12 :00, 1:00-2:00
Textbooks:
required: Money, Banking and the Financial System, E.V. Bowden, 1989,
West Publishing Co.
A Random Walk Down Wall Street, Burton G. Malkiel, 4th. ed.,
Norton Publishing Co.
optional: Study Guide to Monev, Banking and the Financial System, E.V.
Bowden and Judith Holbert Bowden.
The Wall Street Journal.
With regard to domestic and
international banking and monetary issues the Wall
Street Journal maintains one of the most current and
educational series of writings available.
I will
occasionally take articles and examples out of the
Journal for discussion.
Grading: There will be three exams in this course, two midterm
exams and a final exam each approximately five weeks apart.
Each exam will consist of part multiple choice, part problems,
and part essay and will account for approximately one-third
of the total course grade.
THE course can be broken down into several sections. Section I is
an introduction to money and financial markets.
This includes an
overview regarding the definition and role of money in an economy
and a description of the financial market system in the United
States.
Included is a discussion of the determination of interest
rates, their levels and structure.
Section II pertains to the
structure of the domestic banking system and the process of money
creation. Section III discusses the policy tools through which the
United States monetary authorities can affect the domestic money
supply.
Section IV is a detailed macroeconomic study of the
relationship between money and economic activity.
Section vis a
basic introduction into the relationship between international
financial flows and domestic financial and banking mark e ts.
Assignments
Section I. Introduction to Money
Introduction, What is Money & Money Demand;
Malkiel, chpt. 1-2
Interest Rates and Yields;
chpt. 3(B)
Money Demand and Velocity;
chpt. 4,5(B)
chpt. 1,2)
Section II .
Financial Intermediation and Financial Markets
Malkiel,
chpt. 3-9
Financial Intermediation;
chpt. lO{B)
Real and Financial Assets, Functions of Financial Instruments
Markets;
chpt. ll(B) Appendix. lla. {B)
Capital and Money Markets;
chpt. 12{B)
The Risk & Term Structure of Interest Rates;
chpt.13(B)
Section III .
Banking & the Banking System
Malkiel, chpt. 11
The Banking Industry;
chpt. 6(B)
Thrift Institutions;
chpt. 7(B)
Financial Innovation & Regulation; the 1980's;
Structure of the Federal Reserve;
chpt. 9{B)
&
chpt. 8(B)
Section IV.
Money Creation and the Money Supply Process
Introduction, Bank Balance Sheets;
chpt. 18(B)
High Powered Money & Money Multipliers;
chpt. 19(B)
Tools of Monetary Policy;
chpt. 20(B)
Bank Reserves and the Monetary Base;
chpt. 21(B)
Determinants of the Money Supply and the Monetary Base;
chpt. 22(B)
Section V.
Monetary Theory and Policy
Goals and Targets of The Federal Reserve;
chpt. 23(B)
The Federal Reserve's Monetary Targets; chpt.
24(B)
Money, Output, and Prices: Keynesian and Monetarist
Views;
chpt . 25(B)
Section VI.
Monetary Theory: Basic Models
Classical and Monetarist Models;
chpt. 27(B)
The Keynesian Framework;
chpt. 28(B)
The ISLM Model;
chpt. 29,3l(B) Chapter 30 is optional .
Aggregate Demand and Aggregate Supply; chpt 32,33(8)
Keynesian and Monetarist Views of AgD-AgS;
chpt. 34(B)
Section VII.
International Economics & Banking Activity
Foreign Exchange Markets;
chpt. 37(B)
International Financial System;
chpt. 38(8)