University of Massachusetts Department of Economics



University of Massachusetts, Boston  

Department of Economics

Money and Financial Institutions (Economics 331)

Fall 2012

Instructor: Arjun Jayadev,

Office: Wheatley Hall 5-24                                

Lecture time: W 5:30-8:00

Email to: arjun.jayadev@umb.edu                                  

Office hours: W: 1:00-3:00 or by appointment

 

Prerequisites: Econ 101, Econ 102 must be completed prior to enrolling in Econ 331. Having completed Econ 202 would be an advantage. 

 

COURSE SYLLABUS

Summary

This course discusses the interactions between the financial system and the macroeconomy.  The course is intended to provide students with knowledge that will enhance their interest in understanding of the impact of developments in financial markets on the economy at the microeconomic level (individuals, households, and firms) and at the macroeconomic level (the national economy and the global economy).  Topics include the role of money, the functions of the financial system, portfolio choice theory, the determination of interest rates and asset returns, foreign exchange markets and exchange rates, the conduct and instruments of monetary policy, and mechanisms of transmission of monetary policy. The course will be divided into three modules: As you know, the US and Europe have been undergoing a major financial crisis; certainly the largest one in 80 years. As a result, the course will have a substantial section on financial crises in history and now for the last two-three weeks.

 

Required readings

➢ Unlike in previous years, there is no required textbook this year. Instead, you will have a series of readings for each topic and a guide to the readings (which should act as an overview/class notes). The class readings will be put up a week or two in advance on the class website: . Is the student’s responsibility to check the class website periodically for any readings. I would suggest that you check it on the Monday before classes so that you have any updated materials before class. If however you desire a textbook, I often use Glenn Hubbard’s book Money, the Financial System, and the Economy. If you so desire, I will provide the chapters which supplement the course from this book.

.Important Note:   Attendance to lectures is therefore highly recommended. In other words, while I may not penalize you for not attending lectures, in effect, you will be doing so yourselves. PLEASE NOTE: You MUST have access to your UMB e mail. All messages will come to you via your UMB e mail. You may set the UMB mail to forward messages to your default e mail address

 

Recommended readings

➢ It would be useful for the student to keep up with current events in the financial markets and the macroeconomy by reading useful newspapers such as The Financial Times, The Wall Street Journal and other economic/financial newspapers and magazines (The New York Times, The Economist, etc.). At the very least, this is an important activity for your general education. For

➢ Another very useful, interesting and free book to read is Wall Street by Doug Henwood. The book is available for free download at WallStreet.pdf

Course outline

This course is arranged in three overlapping but distinct sections. At the end of the first and second sections there will be an in class test on the material in those sections. Each section will have two homework assignments. At the end of the third section you will be required to write a 6-8 page paper (about 2000 words) on this and/or other financial crises from a list of questions. The following is a tentative course outline for the class.

Part (A)

I. Money and the Financial system

II. An Overview of the Financial System

III. Bond Markets

IV. Stock Markets

V. Money Markets

Review and First Test: (Currently Scheduled for October 10th)

Part (B)

VI. Derivative Markets

VII. Foreign Exchange Markets

VIII. Financial Institutions

IX. Money Supply and Monetary policy

Review and Second Test (Currently Scheduled for November 28th)

               

Part (C): Special Topics: The Global Financial Crisis and Aftermath

 

X. Readings to be announced

Course requirements and grade distribution

This is primarily a lecture-based course. Each student will: complete 4 take-home assignments, two in class tests and a final paper. All assignments and tests may include short essays, problem solving, and graphing, and will be based upon all the material in the readings and the lectures. Students may be required to present a topic from the readings. There will be no scaling of grades and no extra credit.

Late assignments will not be accepted unless you can show me appropriate documentation. Exams can be made up only by prior arrangement or upon production of appropriate documentation.

Grading

The final course grade is determined as follows:

+ 30% for the four assignments

+ 25% for the first exam

+ 25% for the second exam

+ 20% for the final paper

Suggestions

• Don't make the mistake of missing class; attendance is the single-most useful thing anyone can do to learn the material.

• Make use of the economics department student tutoring system.

• Start study groups where you can develop your understanding of the material by working through the analysis together.

• Rewrite your class notes each week - with the aid of the readings. This is a good method of learning the material and will help you identify mistakes and confusing points in your notes early on. Do not rely on my notes alone.

• Email me with your questions whenever they arise.

Additional Policies

1. Academic Honesty

Please, please abide by the University’s academic honesty rules. If you are caught cheating on any assignment or exam, your grade will be an automatic F. In addition it will be extremely unpleasant for me as well as for you to go through the university’s disciplinary procedures. If you are unsure about these rules at any time, please check the website of the department of economics (economics.umb.edu) or the university or contact me.

In essence the rules state the following. Good rule of thumb- if you are unsure whether to cite-cite

Academic Honesty Violations

1. Submitting as one’s own an author’s published or unpublished work (e.g. material from a journal, Internet site, newspaper, encyclopedia), in whole, in part, or in paraphrase, without fully and properly crediting the author.

2. Submitting as one’s own work or materials obtained from another student, individual, or agency without full and proper attribution.

3. Submitting as one’s own work material that has been produced through unacknowledged or unauthorized collaboration with others.

4. Submitting substantially the same work to more than one course without prior approval from all instructors involved: i.e., dual or multiple submission.

5. Using any unauthorized material during an examination, such as notes, tests, calculators, cell phones, PDAs, or other electronic or mechanical communication devices. Abuse of cellular devices with photographic capabilities and use of devices for purposes of photographing test questions or other notes and materials are also prohibited.

6. Obtaining answers to examination questions from another person with or without that person’s knowledge; furnishing answers to examination questions to another student; using or distributing unauthorized copies of or notes from an examination.

7. Submitting as one’s own an examination taken by another person; or taking an examination in another person’s place.

8. Gaining or seeking to gain unauthorized access to, or altering or destroying the paper or electronic files of a student, faculty member, or staff member for the purpose of gaining better academic standing and success.

9. Failing to adhere to professional standards or ethics of a discipline and/ or violating the rules of an agency in the course of completing field work, internship, practicum, student teaching, or clinical placement.

10. Interfering with an instructor’s ability to evaluate accurately a student’s competence or performance; misleading any person in connection with one’s academic work.

2. Learning disabilities

If you have a disability and feel you will need accommodations in order to complete course requirements, please contact the Ross Center for Disability Services (M-1-401) at (617) 287-7430 and let me know that you have done so.

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