Money and Banking

Money and Banking Module 1
Introduction to the Financial and Monetary Regime

• A Country’s Financial and Monetary Regime
• The Real and Financial Sectors of the Economy
• Measuring Economic Performance
• Periods of Major Economic Distress
• Basic Concepts Regarding Money
• The Value of Money
• Evolution of Monetary Standards
• Relationship Between Money and Economic Activity

Money and Banking Module 2
The Financial System and the Country’s Flow of Funds

• Sector Budgets
• Income and Balance Sheets
• Fundamentals of Flow of Funds Equation
• Surplus, Deficit and Balanced Sectors
• Direct Finance
• Indirect Finance

Money and Banking Module 3
Interest Rates in the Financial System

• Interest Rates in Indirect and Direct Finance
• Government Interest Rate Regulation
• A Short History of Interest Rate Regulation
• Basic Technical Aspects of Interest Rates
• Level of the Interest Rate
• Loanable Funds
• Supply and Demand
• Nominal Interest Rate and Real Interest Rate
• Interest Rates and Monetary Policy

Money and Banking Module 4
Structure of Interest Rates

• Default Risk
• Liquidity or Marketability Effect
• Tax Treatment
• Maturity
• Shape of the Yield Curve
• Yield Curves

Money and Banking Module 5   
International Dimensions of the Financial System

• U.S. Statement of International Transactions
• Foreign Exchange Rates
• The Exchange Rate
• Foreign Exchange Intervention by the Central Bank
• Exchange Rate Regimes
• Fixed Exchange Rates
• Flexible Exchange Rate System

Money and Banking Module 6
Roles of Government

• Minting Coin and Gresham’s Law
• Commodity-Based Monetary System
• Inverted Pyramid Monetary System
• Fractional Reserve Systems
• Institutionalization
• Extended Rationales for Government Involvement
• History and Politics on Government Involvement

Money and Banking Module 7
Regulation and Supervision of the Financial System

• Asymmetric Information, Adverse Selection, and Lemons
• Depository Financial Institutions
• Deposit Insurance
• Capital-Asset Requirements
• Non-depository Financial Institutions
• Transparency in the Money and Capital Markets
• The Federal Reserve as a Regulatory and Supervisory Agency

Money and Banking Module 8
History of the U.S.  Financial and Monetary Regime in Transition   

• Taxonomy of a Changing Financial and Monetary Regime
• Major Turning Points
• A Brief History from 1776 to the Present

Money and Banking Module 9
Design of the Central Bank

• Institutional Design of the Central Bank
• Ownership of the Central Bank
• Central Bank Independence from Government
• Design of the Federal Reserve System
• Base Money
• Money Supply

Money and Banking Module 10
Tools of Monetary Policy

• Tools of Monetary Policy and Decline of Selective Tools
• General Tools of Monetary Policy
• Moral Suasion and Forward Guidance
• Monetary Policy Instruments
• Macroeconomic Models of the Economy
• Why Models Are Important
• The Rise and Fall of the Phillips Curve
• Aggregate Demand and Supply Model

Money and Banking Module 11
Policy Targets and Tactics  

• Evolution of the Final Policy Targets
• Neoclassical Perspective
• A Steady and Low Rate of Inflation
• Primacy of Price Stability and Inflation Targeting
• The FOMC and Monetary Policy
• Evolution of Federal Reserve Tactics
• The Rules vs. Discretion Debate

Money and Banking Module 12
Performance of the U.S. Financial and Monetary Regime

• The Great Depression
• Role of the Federal Reserve
• The Great Inflation
• The Great Moderation
• Financial Liberalization and the Great Moderation
• Asset Bubbles
• The Great Recession
• Collapse of the Housing Bubble

**Outlines are subject to change, as courses and materials are updated.**

**Outlines are subject to change, as courses and materials are updated.**