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 1. Having the ability to understand and discuss international relations discipline by using an interdisciplinary methodology to merge the knowledge coming from sociology, economics, psychology, political sciences well as diplomatic history.
- P02 2. Having an adequate knowledge of the history and the epochs of international system and being able to identify historical evolution of the contemporary world politics.
- P03 3. Recognizing local, regional and international actors functioning within the international system.
- P04 4. Understanding the legal framework of the current international system
- P05 5. Ability to identify the relations between the key actors of the international system – the states – from a theoretical as well as multi-dimensional scientific and academic methods.
- P06 6. Ability to analyse the roles and positions of the non-state actors – international organizations in particular – within the current world system.
- P07 7. Ability to recognize political, socio-economic and cultural structures embedded in international relations.
- P08 8. Exploring the roots of conflicts among the actors and produce solutions at local, regional and international levels with an analytical focus.
- P09 9. Being able to understand the politics and the functioning of political institutions in theory and practice.
- P10 10. Understanding the historical emergence of various political cultures and gaining ability to assess them comparatively.
- P11 11. Prepare international relations graduates; having a vast knowledge, academic formation and skills to work in public offices, civil society organizations, international institutions and companies at local and global levels.
- P12 12. To have moral and ethical understanding in the field of work.
Po-Lo Matrix
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