| CODE | ECN3126 | ||||||||
| TITLE | Monetary Economics | ||||||||
| UM LEVEL | 03 - Years 2, 3, 4 in Modular Undergraduate Course | ||||||||
| MQF LEVEL | 6 | ||||||||
| ECTS CREDITS | 4 | ||||||||
| DEPARTMENT | Economics | ||||||||
| DESCRIPTION | Monetary Economics is a one-semester core study-unit designed for third-year students studying Economics as one of their major areas of study. The students have the opportunity to further their studies in this area by opting for the Monetary Policy course offered in the second-semester. Subsequently, in the fourth year of the Economics Program students will further their knowledge and skills by following the course Economics of Financial Markets. This unit combines the study of Monetary Theory with relevant policy applications. This course examines how financial markets and financial institutions work and explore the role of money in the economy. To this end, this unit examines the overall level of interest rate and considers the role of expectations in the stock market. This unit will also tackle the questions of what central banks are trying to achieve and what motives them, how the money supply is determined and what tools they have at their disposal. It also delves into how monetary policy can be used to stabilize the economy and inflation and outlines the transmission mechanisms through which monetary policy affects the economy. This unit also develops a framework for understanding the dynamics of financial crisis and focus in particular on the global crisis of 2007-2009. Topics to be covered include: 1. Introduction to Monetary Economics 2. The Behavior of Interest Rates 3. The Risk and Term Structure of Interest Rates 4. The Stock Market, Rational Expectations and the Efficient Market Hypothesis 5. Central Banks 6. The Money Supply Process 7. Tools of Monetary Policy 8. The Conduct of Monetary Policy 9. Monetary Policy Theory 10. The Role of Expectations in Monetary Policy 11. Transmission Mechanisms of Monetary Policy 12. The Global Financial Crisis of 2007-2009 Study-unit Aims: The study-unit provides students with the theoretical building blocks that are needed for an understanding of the monetary theory and surveys the issues in the present-day monetary policy implementation faced by the central banks. The study-unit aims to provide: - A deep understanding behind the theory of interest rates; - An insight into central banking and the conduct of monetary policy; - An overview of monetary theory particularly focusing on the effects of monetary policy on output and inflation and the use of monetary policy to stabilize the economy; - An understanding of the dynamics of the financial crisis. Learning Outcomes: 1. Knowledge & Understanding By the end of the study-unit the student will: - recognize the importance of financial markets in the economy, how these markets operate and how interest rates behave; - have detailed insights into central banking: their tools and how to use them; - be able to understand the design and the channels of transmission of monetary policy; - have knowledge of the dynamics of financial crisis. 2. Skills By the end of the study-unit the student will: - be able to apply monetary theory to understand policy implications; - have a capacity to understand the dynamics of the recent financial crisis; - be able to assess the impact of monetary policy on the economy. Main Text/s and any supplementary readings: Mishkin F. S., (2016) 'The Economics of Money, Banking and Financial Markets', 11th edition., Pearson. Mercier, P. & Papadia F. (2011), The Concrete Euro, Oxford University Press. Bindseil U. Monetary Operations and the Financial System (2014), Oxford University Press. Bernanke B. S, (2015), The Federal Reserve and the Financial Crisis. Bernanke B. (2017), The Courage to Act: a Memoir of a Crisis and its Aftermath. Other supplementary readings are provided during the course. These will be continuously updated to reflect current affairs and economic/financial developments occurring during the period of study. |
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| STUDY-UNIT TYPE | Lecture and Tutorial | ||||||||
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| LECTURER/S | Charmaine Portelli |
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The University makes every effort to ensure that the published Courses Plans, Programmes of Study and Study-Unit information are complete and up-to-date at the time of publication. The University reserves the right to make changes in case errors are detected after publication.
The availability of optional units may be subject to timetabling constraints. Units not attracting a sufficient number of registrations may be withdrawn without notice. It should be noted that all the information in the description above applies to study-units available during the academic year 2023/4. It may be subject to change in subsequent years. |
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