Money and Banking

This course explores the theoretical and applied foundations of money and banking with a focus on international issues. The introductory part of the course motivates why the study of money and banking may be worthwhile, and provides an overview of international financial systems. Next, details of financial markets are discussed, in particular the behavior of interest rates and their determinants, as well as the classical theory of rational expectations and the efficient markets hypothesis as they pertain to stock markets. The third section of the course focuses on aspects of financial crises, financial institutions, and the theory and practice of central banking. This includes the study of the stages of financial crises, alternative international central banking systems, as well as the strategy and conduct of central bank intervention. The final fourth part of the course discusses international finance and monetary policy theory including the foreign exchange market, aggregate demand and supply analysis, the theory of monetary policy, and the role of expectations and credibility with respect to central banks.