MONEY AND BANKING

This course studies the roles that financial markets play within our economic system. With the help of principles from finance and economics, the course explores the connection between these two by examining how the most important players in financial markets, central banks, operate and how monetary policy, both domestically and internationally, is conducted. Students examine the operations of commercial banks and of non-bank financial institutions, the process of deposit creation in commercial banks, the structure of interest rates, the supply and demand of loanable funds, and the role of the central bank. Students analyze the impact of monetary policy on interest rates, on flows of funds in financial markets, and on aggregate spending and international economic activity.