MONEY AND BANKING
- Course
- ECON332 - MONEY AND BANKING
- Department
- Economics - English - Undergraduate
- Course Type
- Course
- Status
- Required
- Language
- English
- Credit
- 3
- ECTS
- 7
- T+P+L
- 3 + 0 + 0
- Course Coordinator(s)
- -
- Prerequisite
- -
Course Description
This course is designed to explain the importance of money and banking to economic activity. This course offers a systematic analysis of monetary theories and the financial system. Apart from exposing students to different approaches in monetary analysis, the course places a special emphasis on the up-to-date analysis of how information costs affect financial structure and monetary policy. The course will cover the structure and importance of the financial system, the functions of money, behavior of interest rates, financial structure and asymmetric information, bank management and regulation, debates on macroeconomic and monetary policies, the targets and instruments of monetary policies, the transmission mechanism of monetary policy and its effectiveness, money and inflation, rational expectations and its applications.
MONEY AND BANKING
Evaluation Tools (Active Term)
No evaluation items have been defined.
Course outcomes
No course outcomes have been defined yet.
Course Syllabus
| Week | Topic |
|---|---|
| Week 1 | An Introduction to Money and the Financial System: Financial system and the economy; Financial markets; Financial institutions; Economic analysis as a tool. |
| Week 2 | Money and the Payment System: Money vs. barter; what can serve as money; the payment system; Measuring the money supply. |
| Week 3 | Financial Instruments, Financial Markets, and Financial Institutions : The purpose of the financial system; Risk sharing; Liquidity; Information; Debt and equity; Savers and borrowers. |
| Week 4 | 1. Future Value, Present Value, and Interest Rates: Comparing debt instruments; Present value; Yield to maturity; Bond yields and prices. |
| Week 5 | 2. Future Value, Present Value, and Interest Rates: Comparing debt instruments; Present value; Yield to maturity; Bond yields and prices. |
| Week 6 | 1. Understanding Risk: Definition of Risk, measuring risk, sources of risk; idiosyncratic and systematic risk. Reducing risk through diversification. |
| Week 7 | 2. 1. Understanding Risk: Definition of Risk, measuring risk, sources of risk; idiosyncratic and systematic risk. Reducing risk through diversification. |
| Week 8 | MIDTERM EXAM |
| Week 9 | MIDTERM EXAM |
| Week 10 | Bonds, Bond Prices, and the Determination of Interest Rates: Supply and demand in the bond market and loanable funds. |
| Week 11 | Risk and Term Structure of Interest Rates : Default risk; liquidity; Information costs; Taxation; Segmented market hypothesis; Expectations theory; Preferred habitat approach. |
| Week 12 | The Economics of Financial Intermediation : The role of financial intermediaries, solving the adverse selection problem. Moral Hazard: Problem and Solutions. Financial intermediaries and information costs |
| Week 13 | Regulating the Financial System: The sources and consequences of runs, panics, and crises. Regulation and supervision of the financial system. |
| Week 14 | REVISION |
| Week 15 | FINAL EXAM |
Reference Books & Course Materials
- 01 1. Schoenholtz, Cecchetti. Money, Banking, and Financial Markets, Fourth Edition, Mc Graw Hill.
- 02 2. Frederic S. Mishkin. The economics of money, banking and financial market. 7th edition. The Addison-Wesley Series in Economics
- 03 3. Reading materials on Moodle.
Learning Outcomes
No learning outcomes have been defined.
Program Outcomes
- P01 PO1: Engaged in insightful thinking leading to self-learning and lifelong learning.
- P02 PO2: Established a general knowledge of economics sufficient to work independently through specific learned techniques generated via individual efforts and study.
- P03 PO3: Reached the required knowledge and skills to understand social, economic and legal issues both within national, international and global contexts and apply theoretical knowledge of economics to practice.
- P04 PO4: Adopted the ability to critically evaluate, analyze and interpret information gathered through the use of related statistical software programs to suggest creative solutions for economic problems and make relevant economic decisions.
- P05 PO5: Been aware of gathering and analyzing data through the application of appropriate technological tools in an ethical and safe manner in order to generate economic decisions and policy suggestions.
- P06 PO6: Been equipped with conceptual and analytical skills essential for team-working and collaborations for economic decision making for a variety of economic concepts in national and global environment.
- P07 PO7: Endowed with both oral and written communication skills within the economic field to effectively study and work in an international environment
- P08 PO8: Been able to transfer theoretical knowledge to real life economic environment: to generate policies for microeconomic and macroeconomic problems faced by individuals, firms and governments at national, international and global context.
- P09 PO9: Developed an ability to apply economic analysis to everyday problems in real world through the development of ethical perspectives and social responsibilities at work and in personal life.
Po-Lo Matrix
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