1
Economics of Money and
Banking
Description of course and Motivation:
2
This course offers a systemic of monetary theories and the financial system.
The course will cover the structure and importance of the functions of money, the financial system, bank management and regulation, debates on macroeconomic and monetary policies, the targets and instruments of monetary policies, the transmission mechanism of monetary policy and its effectiveness ,money and inflation.
Course Objective:
3
Our aim in this course will be double. First, to develop a basic understanding of the financial system: how it operates and why it plays a central role in the economy. second, is to analyze in details the aims, conduct, influence, and the limitations of monetary policy.
by the end of the course, you should have a firm grasp of the fundamental issues in monetary policy and should more fully appreciate the importance of a well- functioning financial system.
4
Required Textbook:
Ritter ,Silber & Udell ,Principle of Money , Banking and Financial Markets 11th edition, available at University Book Store.
Supplementary Readings:
Business magazine, text books, articles, internet, newspapers.
Course contains
5
Chapter 1: Introduction: Money and Banking and Financial Markets
Chapter 2:The role of money in the macro economy: Introducing money
Chapter 3:Financial instruments, Markets and Institutions
Chapter 4:The monetary theories Chapter 5:The monetary policies
Chapter 6:The Inflation
Delivery methods:
6
This course is delivered in the form of
interactive lectures summarized in handouts and accompanied by transparency presentations. Most important issues within each concept and/or topic are clarified through discussions and class participation.
Method of teaching will totally depend on:
L=Lecture; T=Transparency;D=Discussion
Student evaluation as per course outline:
7
Homework ,Attendance and Participation 10%
1st Exam 25%
2nd Exam 25%
Final Exam 40%
Total 100%
MONEY AND BANKING AND FINANCIAL
MARKETS
8
Chapter 1: Introduction
Why Study Money, Banking, and Financial Markets:
9
To examine how financial markets work
To examine how financial institutions such as banks and insurance companies work
To examine the role of money
in the economy
Introduction of Concepts
10
Financial Markets/Institutions
Bringing together of buyers and sellers of financial securities to establish prices
The formal setting/mechanism that brings buyers and sellers together to value financial assets
Provides a mechanism for those with excess funds (savers) to lend to those who need funds [borrowers]
Introduction of Concepts (Cont.)
11
Money
“Lubricant that greases the wheels of economic activity”
Not just limited to currency (bills and coins)—also includes demand deposits (checking accounts) issued by banks
Plays a key role in influencing the behavior of the economy as a whole and the performance of financial institutions and markets
Introduction of Concepts (Cont.)
12
Money (Cont.)
More broadly the monetary economy
Facilitates transactions within the economy
Principal mechanism through which central banks attempt to influence aggregate economic activity
Economic Growth
Employment
Inflation
Introduction of Concepts (Cont.)
13
Banking
Banks and other financial intermediaries (insurance companies, pension funds) take funds from one group (savers) and re-deploy these funds by investing or lending (borrowers)
Banks provide a place where individuals and businesses can invest their funds to earn interest with a minimum of risk
Well-equipped to invest in the most challenging types of financial investments—loans to individuals and small businesses
Flow of funds from lenders to
borrowers
Introduction of Concepts (Cont.)
15
Banking (Cont.)
Banks serve as the principal caretaker of the economy’s money supply, and along with other financial intermediaries, provide important source of funds
Banks are intimately involved in how the central bank of the United States (Federal Reserve) [Fed] influences overall economic activity
The Monetary policy is the control of the money supply while using the interest rate and others instruments. The [Fed] directly influences the lending and deposit creation activities of banks.
16
Economics of Money and
Banking
Description of course and Motivation:
17
This course offers a systemic of monetary theories and the financial system.
The course will cover the structure and importance of the functions of money, the financial system, bank management and regulation, debates on macroeconomic and monetary policies, the targets and instruments of monetary policies, the transmission mechanism of monetary policy and its effectiveness ,money and inflation.
Course Objective:
18
Our aim in this course will be double. First, to develop a basic understanding of the financial system: how it operates and why it plays a central role in the economy. second, is to analyze in details the aims, conduct, influence, and the limitations of monetary policy.
by the end of the course, you should have a firm grasp of the fundamental issues in monetary policy and should more fully appreciate the importance of a well- functioning financial system.
19
Required Textbook:
Ritter ,Silber & Udell ,Principle of Money , Banking and Financial Markets 11th edition, available at University Book Store.
Supplementary Readings:
Business magazine, text books, articles, internet, newspapers.
Course contains
20
Chapter 1: Introduction: Money and Banking and Financial Markets
Chapter 2:The role of money in the macro economy: Introducing money
Chapter 3:Financial instruments, Markets and Institutions
Chapter 4:The monetary theories Chapter 5:The monetary policies
Chapter 6:The Inflation
Delivery methods:
21
This course is delivered in the form of
interactive lectures summarized in handouts and accompanied by transparency presentations. Most important issues within each concept and/or topic are clarified through discussions and class participation.
Method of teaching will totally depend on:
L=Lecture; T=Transparency;D=Discussion
Student evaluation as per course outline:
22
Homework ,Attendance and Participation 10%
1st Exam 25%
2nd Exam 25%
Final Exam 40%
Total 100%
MONEY AND BANKING AND FINANCIAL
MARKETS
23
Chapter 1: Introduction
Why Study Money, Banking, and Financial Markets:
24
To examine how financial markets work
To examine how financial institutions such as banks and insurance companies work
To examine the role of money
in the economy
Introduction of Concepts
25
Financial Markets/Institutions
Bringing together of buyers and sellers of financial securities to establish prices
The formal setting/mechanism that brings buyers and sellers together to value financial assets
Provides a mechanism for those with excess funds (savers) to lend to those who need funds [borrowers]
Introduction of Concepts (Cont.)
26
Money
“Lubricant that greases the wheels of economic activity”
Not just limited to currency (bills and coins)—also includes demand deposits (checking accounts) issued by banks
Plays a key role in influencing the behavior of the economy as a whole and the performance of financial institutions and markets
Introduction of Concepts (Cont.)
27
Money (Cont.)
More broadly the monetary economy
Facilitates transactions within the economy
Principal mechanism through which central banks attempt to influence aggregate economic activity
Economic Growth
Employment
Inflation
Introduction of Concepts (Cont.)
28
Banking
Banks and other financial intermediaries (insurance companies, pension funds) take funds from one group (savers) and re-deploy these funds by investing or lending (borrowers)
Banks provide a place where individuals and businesses can invest their funds to earn interest with a minimum of risk
Well-equipped to invest in the most challenging types of financial investments—loans to individuals and small businesses
Flow of funds from lenders to
borrowers
Introduction of Concepts (Cont.)
30
Banking (Cont.)
Banks serve as the principal caretaker of the economy’s money supply, and along with other financial intermediaries, provide important source of funds
Banks are intimately involved in how the central bank of the United States (Federal Reserve) [Fed] influences overall economic activity
The Monetary policy is the control of the money supply while using the interest rate and others instruments. The [Fed] directly influences the lending and deposit creation activities of banks.
