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BAEcon Economics and Finance / Course details

Year of entry: 2021

Course unit details:
Money, Banking & Financial Markets

Unit code ECON30852
Credit rating 10
Unit level Level 3
Teaching period(s) Semester 2
Offered by Economics
Available as a free choice unit? Yes

Overview

The aim of this course is to introduce students to the way that banks, financial markets and monetary policy work and interact in theory and practice. We examine how bond and money markets operate and how interest rates behave. We also look into some of the problems and dilemmas that central banks face in choosing appropriate policies and implementing them, both in normal times and during financial crises. Throughout the course examples from financial newspapers and other sources are used to familiarise students with how theoretical concepts are used in practice.

At the end of this course students should be able to: (a) understand how interest rates behave in the bonds and money markets; (b) demonstrate their understanding of the term structure of interest rates; (c) understand the theories of the demand for money and their implications; (d) understand how the supply of money is created within the banking system; (e) understand how central banks conduct monetary policy; (f) demonstrate their knowledge on the various tools, targets and goals employed in monetary policy and understand their limitations.

Pre/co-requisites

Unit title Unit code Requirement type Description
Macroeconomic Analysis 4 ECON20532 Pre-Requisite Compulsory
Macroeconomics 4 ECON20032 Pre-Requisite Compulsory
Macroeconomics 3 ECON20031 Pre-Requisite Compulsory
Macroeconomic Analysis 3 ECON20521 Pre-Requisite Compulsory
Adv Maths - BAEcon & BSc Econ ECON10071 Pre-Requisite Compulsory
Advanced Mathematics ECON20071 Pre-Requisite Compulsory
(ECON20031 or ECON20521) AND (ECON10071 or ECON20071)

Aims

The aim of this course is to introduce students to the way that banks, financial markets and monetary policy work and interact in theory and practice. We examine how bond and money markets operate and how interest rates behave. We also look into some of the problems and dilemmas that central banks face in choosing appropriate policies and implementing them, both in normal times and during financial crises. Throughout the course examples from financial newspapers and other sources are used to familiarise students with how theoretical concepts are used in practice.

Learning outcomes

At the end of this course, you should be able to:

  1. Understand how interest rates behave in the bonds and money markets.
  2. Demonstrate their understanding of the term structure of interest rates.
  3. Understand the theories of the demand for money and their implications.
  4. Understand how the supply of money is created within the banking system.
  5. Understand how central banks conduct monetary policy.
  6. Demonstrate their knowledge on the various tools, targets and goals employed in monetary policy and understand their limitations.

Syllabus

  • The Financial Markets and Interest Rates.
  • The Term Structure of Interest Rates.
  • The Demand for Money.
  • The Supply of Money and the Banking System.
  • Central Bank Tools of Monetary Policy.
  • Goals and Targets of Monetary Policy.
  • Monetary Targets Vs Interest Targets.
  • Policy Targets in Practice.
  • The Taylor Rule. Inflation Targeting.
  • The 2007 Financial.

Teaching and learning methods

Lectures and exercise classes.

Employability skills

Analytical skills
Critical reflection and evaluation. Policy analysis and decision-making.
Problem solving
Research
Planning independent research using library electronic and online resources. Using reporting skills. Using diagrammatical analysis in reports.
Other
Presentation. Literacy. Computer literacy. Time management. Applying subject knowledge. Research. Improving own learning.

Assessment methods

75% Exam

25%  Assignment

 

Feedback methods

  • Feedback provided on submitted assignments.
  • Class feedback.
  • Office hours.
  • Revision sessions.
  • Support hours.   

Recommended reading

Main Textbooks:

  • Frederic S. Mishkin, The Economics of Money, Banking, and Financial Markets, 10th Edition, Pearson.
  • Cecchetti  and Schoenholtz  3rd  Ed “Money, Banking, and Financial Markets”.
     

Study hours

Independent study hours
Independent study 0

Teaching staff

Staff member Role
George Bratsiotis Unit coordinator

Additional notes

For every 10 course unit credits we expect students to work for around 100 hours. This time generally includes any contact times (online or face to face, recorded and live), but also independent study, work for coursework, and group work. This amount is only a guidance and individual study time will vary.

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