ECON 3110 Money and Banking Fall 2018 Bowling Green State University Kevin Quinn BA310 372-8652 (W) Hrs : Mon-Wed-Fri, 10: 30 - 12:30, and by appointment. E-mail: kquinn@bgsu.edu Course Objective: In this course, the goal will be to throw light on the murky mysteries of money and finance. Some of the questions you will be able to think about and answer after taking the course are: What are the advantages and disadvantages of using money? What is money? How is it created? Why do we give our money to banks to lend rather than lending it ourselves? What connection is there between the Chairman of the Federal Reserve's statement about the benefits of price stability today, and your inability to find a job tomorrow? Should banks be regulated and, if so, why banks and not other businesses? Why do we care about inflation? Why do we care about the dollar's exchange rate? What is a financial panic? Is the stock market efficient? What is the business cycle and what can monetary policy do about it? We will explore the nature of the paradox in Milton Friedman's famous statement that "money is a veil"--disguising the real workings of the economy without affecting them--while nevertheless "when the veil flutters, output stutters". Finally, the tools we develop in this course will be crucial to understanding the severe macroeconomic problems that we have been experiencing lately. Both diagnosis and possible cures, as well as lessons for avoiding a future repeat performance- all can be addressed coherently with the aid of what we learn about the connections between the financial system and the macro-economy in this course. Course Requirements: There will be three exams, including the final. Together these will account for 90% of the course grade. The remaining 10% of your grade is based on participation and on your grades on written assignments. These may be in-class quizzes (announced or unannounced) or homework assignments. Participation means coming to class prepared and able to contribute. There will be no make-ups on pop quizzes. Make-ups on major exams are strongly discouraged and will only be given in cases of a documented emergency which prevents your attendance at the scheduled time. Text: The text is Laurence Ball, Money, Banking and Financial Markets, Worth Publishers, 2nd Edition, 2012. . Short supplementary readings will be given out in class from time to time. Course Outline and Reading Assignments: 1. Introduction: The Financial System and Money Chs.1,2 2. Asset Pricing, Interest Rates and Exchange Rates Chs. 3-6 3.Financial Intermediation and Information Ch. 7 4. Banking and Bank Regulation Chs. 8-10 5. Central Banking and the Money Supply Ch. 11 6. Money and Macroeconomic Fluctuations Chs. 12, 13 7. Inflation and Deflation Ch.14 8. Monetary Policy Chs, 15, 16, 17 9. Financial Crises Ch. 18
