Monetary Theory and Policy II: Determining, implementing, and evaluating monetary and fiscal policy; effect on the economy, monetary targets and indicators; role of interest rates in understanding monetary policy, the effects of monetary policy on different sectors; role of fiscal policy in the economy.
The aim of this Thematic Subject is mainly to provide the students a clear understanding of the following concepts and mechanisms: -The economic significance, the definitions and the types of money, the quantity and the value of money as well as the determinants which affect the demand and the supply of money. - The operation of the financial system both within a closed as well as in open economy.
| Week | Topics |
|---|---|
| 1 | Introduction of the syllabus, academic writing rules (a refreshment of the already taught in the first-year key elements of the academic writing well-adjusted to the needs of the comparative banking course) and discussion on the indicative project topics. More specifically we are going to analyze the key parts of the syllabus and afterwards we will be based on the way that we are going to proceed with the elaboration of the team working projects. In order the students to be facilitated more, during this introductory lecture it will be presented some indicative topics or in a broader way reliable scientific areas of the examining field, which could be chosen purely by the students or they can be based on them in order to form their own topic. |
| 2 | Money (Functions, qualities, theoretical and empirical definitions) – In this chapter the concept of money will be explained together with some reasons why people do need and save money. Then the qualities of money will be pinpointed. Afterwards, three types of money classification will be mentioned (M1, M2 and M3) (pg. 414-424). |
| 3 | Money supply – In this chapter the money supply will be thoroughly explain by starting to mention firstly the primary and secondary money and central bank balance sheets. Additionally, the role of money in monetary policy, how money is created and how it is supplied will be elaborated (pg. 424-444) |
| 4 | IS-LM curve and Taylor Rule (1st part) – In this lecture the IS-LM model in a closed economy will be presented firstly together with the implementation in the monetary policy and economy. Moreover, the liquidity trap will be explained presenting also the inflation and its effects. In addition, the reasons that lie behind the creation of inflation as well as some fiscal policies will be discussed (pg. 434-450). |
| 5 | IS-LM curve and Taylor Rule (2nd part) – This chapter begins by highlighting some monetary and targeting policies. Moreover, the Taylor Rule will be presented with each of its versions. Lastly, some monetary policies for the Eurosystem will be mentioned (pg. 451-461). |
| 6 | Revision. We are recapping all the already taught subjects, by pinpointing the highlights of them concentrating on those that are needing, due to their nature, more attention in terms of critical analysis and combination of different reliable topics. |
| 7 | Midterm Exam |
| 8 | Money demand (1st part) – In this lecture the main objectives are as follows: to describe Friedman’s modern quantity theory of money, to describe the classical quantity theory, to describe Keynes’s liquidity preference theory and its improvements and to contrast the modern quantity theory with the liquidity preference theory (pg. 420-433). |
| 9 | Money demand (2nd part) - In this lecture the main objectives are as follows: to describe Friedman’s modern quantity theory of money, to describe the classical quantity theory, to describe Keynes’s liquidity preference theory and its improvements and to contrast the modern quantity theory with the liquidity preference theory (pg. 420-433). |
| 10 | International Economic Policy and Foreign Exchange Markets (1st part) - In this section firstly an explanation will be made for exchange rates and cross rates accordingly. Later, the balance of payments together with its components will be pinpointed accordingly (pg. 534-547). |
| 11 | International Economic Policy and Foreign Exchange Markets (2nd part) - In this section firstly an explanation will be made for exchange rates and cross rates accordingly. Later, the balance of payments together with its components will be pinpointed accordingly (pg. 534-547). |
| 12 | Optimum Currency Areas - In this lecture the rates will be explained (fixed and floating) together with key features of each of them. Then, the PPP (Purchasing Power Parity) will be analyzed in detail. Also, some international policy guidelines will be presented (pg. 450-469; pg. 681-720). Additionally, the monetary policy in the Euro system will be highlighted including target policy and target inflation as well. Afterwards, the open market operations in the ECB will be discussed (pg. 340-353). |
| 13 | Revision. We are summing up all the already taught subjects, by pinpointing the highlights of them concentrating on those that are needing, due to their nature, more attention in terms of critical analysis and combination of different reliable topics. |
| 14 | Final Exam |
| Method | Qty | % Each |
|---|---|---|
| Midterm Exam(s) | 1 | 40 |
| Final Exam | 1 | 50 |
| Attendance | 5 | |
| Other | 1 | 5 |
Principles of money, banking and financial systems, Edward T. Merkel (2009)-International Economics: Theory and Policy, 11th Edition, Paul R. Krugman,Maurice Obstfeld, Marc J. Melitz, 2018 -Finance, Banking and Money, V.2.0, 2012