Course Objectives:

This course is designed to help students understand the connections between money (the Federal Reserve), financial markets, and the macroeconomy. How are interest rates determined, and how does the Federal Reserve conduct monetary policy? What economic factors drive the yield curves in different bond markets? We will pay particular attention to the banking system, with an eye toward understanding the function and importance of banks. Topics will include the role of the Federal Reserve as a lender of last resort during the recent, and prior, financial crises, unconventional monetary policy tools such as quantitative easing and forward guidance. We discuss new developments in payment and clearing including cryptocurrencies. We will often begin class with a discussion of current macro-financial market events in the context of our course coverage. The course is appropriate for anyone trying to gain a macroeconomic perspective on capital markets, from investors to bankers, or those simply interested in the linkages between interest rates, banks and the economy.

Course Requirements:

Attendance             10%

In-class discussion       10%

Assignments            20%

Final Ecam             60%

Course Contents:

Syllabus Review & Chapter 1 “Why Study Money, Banking and Financial Markets

Chapter 2 & 3 “An Overview of the Financial System” & “What is Money”

Chapter 4 “The Meaning of Interest Rates”

Chapter 5 “The Behavior of Interest Rates”

Chapter 6 “The Risk and Term Structure of Interest Rates”

Chapter 7 “The Stock Market, Theory of Rational Expectations…”

Chapter 8 “An Economic Analysis of Financial Structure”

Chapter 9 “Banking and Management of Financial Institutions”

Chapter 10 “Economic Analysis of Financial Regulation”

Chapter 11 “Banking Industry: Structure and Competition”

Chapter 13 “Central Banks and the Federal Reserve System”

Chapter 14 “The Money Supply Process”  

Chapter 15 “Tools of Monetary Policy”

Chapter 16 “The Conduct of Monetary Policy ….”

Chapter 19 “Quantity Theory, Inflation and Demand for Money”

Chapter 20 “The IS Curve”

Chapter 21 The Monetary Policy and AD Curves”

Chapter 22 “Aggregate Demand and Supply Analysis”

Chapter 23 “Monetary Policy Theory”

Chapter 24 “The Role of Expectations in Monetary Policy

Credits: 3