BROCK UNIVERSITY

ECONOMICS 3F03

Money and Banking

Fall/Winter 1999-2000

A. General Information

Instructor Office Phone Office Hours

Professor Zisimos Koustas TA 420 688-5550 Ext. 3326 M 12:30-13:30 W 10:30-11:30

B. Course Structure

The course will deal with both micro and macroeconomic aspects of money and banking. There will be three one-hour lectures per week. In class student participation is encouraged, as well as, the taking of class notes. The required textbook for the course is: Frederic S. Mishkin, The Economics of Money, Banking, and Financial Markets.

C. Course Evaluation

The final grade for the course will be based on two midterm tests, a number of assignments, and the final examination. The weights attached to each piece of work in the course are as follows:

midterm test 1 midterm test 2 assignments final examination

25% 25% 15% 35%

 D. Course Outline

Fall 1999

 Part I: Introduction

Weeks 1,2

Why Study Money, Banking, and Financial Markets? (Ch. 1) An Overview of the Financial System (Ch. 2) What is Money? (Ch. 3)

Part II: Financial Markets

Week 3 Weeks 4, 5 Week 6 Week 7 Weeks 8, 9

Understanding Interest Rates (Ch. 4) Portfolio Choice (Ch. 5) The Behaviour of Interest Rates (Ch. 6) The Risk and Term Structure of Interest Rates (Ch. 7) The Foreign Exchange Market (Ch. 8)

MIDTERM TEST 1, Saturday, November 6

Part III: Financial Institutions

Week 10 Weeks 11, 12

Economic Analysis of Banking Structure (Ch. 9) The Banking Firm and its Management (Ch. 10)

Winter 2000

Week 1

Financial Derivatives (Ch. 14)

Part IV: Central Banking and the Conduct of Monetary Policy

Week 2 Week 3 Week 4 Week 5 Week 6

Structure of Central Banks and the Federal Reserve System (Ch. 15) Multiple Deposit Creation and the Money Supply Process (Ch. 16) Determinants of the Money Supply (Ch. 17) Tools of Monetary Policy (Ch. 18) Conduct of Monetary Policy (Ch. 19)

MIDTERM TEST 2, Saturday, March 4, 2000 Room Number: TA 303 Time: 10:00-12:00

Week 7

The International Financial System (Ch. 20)

Part V: Monetary Theory

Weeks 8,9 Week 10 Week 11 Week 12

The Demand for Money (Ch. 21) Monetary and Fiscal Policy in the IS-LM model (Ch. 23) Aggregate Demand and Supply Analysis (Ch. 24) Transmission Mechanisms of Monetary Policy (Ch. 25)