ECON 363(F) Money and Banking
This course first explores the role of the financial system and financial markets, and how they interact with the economy. What does finance do? How are asset prices determined, and how are these prices related to interest rates? Are financial markets efficient, and what are the implications of their efficiency or lack thereof? Second, it analyzes the role of the central bank and the conduct of monetary policy. Special attention will be given to the organization and the operation of the Federal Reserve System, but other monetary policy regimes will also be considered. Students will simulate a meeting of the Federal Reserve Open Market Committee, either to decide on monetary policy or to debate a current policy monetary policy or regulatory issue. Third, it studies the complexities associated with managing and regulating modern financial instruments. Throughout the impact of incentives on the shape and evolution of the financial system will be stressed.
Format: lecture and discussion. Requirements: problem sets, midterm, short presentations during the FOMC simulation, and either a final exam or a paper (students have the option of either).
Prerequisites: Economics 252. Enrollment limit: 25 (expected:25). Preference given to Economics majors.
Hour: CAPRIO