Money and Banking
Economics 121 –Fall 2009
George Washington University
FYI
Instructor: Chao Wei
Office: Monroe 317
Office Hours: Thursdays 2:15-3:15 pm, and other times by appointment
Course Website: home.gwu.edu/~cdwei/econ121.html
Email: cdwei@gwu.edu
Phone: (202) 994-2374
Required Textbook
Mishkin, F.S. [2009]. The Economics of Money, Banking, and Financial
Markets, 9th edition, Addison-Wesley.
Recommended Workbook
Eschker, E, McArthur J. and F. Mishkin [2009], Study Guide and Workbook,
Addison-Wesley.
Course Requirements
There will be 3 required homework assignments and multiple optional
assignments. There will be 2 midterm exams, tentatively scheduled for Mid
October and Mid-Late November. There will be a final exam that will cover
all the materials after the first midterm, but more heavily weighted toward
the materials covered after the second midterm.
Grades
The two midterm exams will count 25% each, the homework 15%, and the
final exam 35%.
Course Outline and Tentative Schedule
At the end of the first 1/3 of the semester, you will be able to:
 Compute the yield to maturity and present value of various bonds;
 Understand the determination of interest rates;
 Understand the risk and term structure of interest rates.
 Compute the price of stocks;
 Understand the efficient market hypothesis.
Week 1: Chapter 1 and 2
Week 2: Chapter 2 and 4
Week 3: Chapter 4
Week 4: Chapter 5
Week 5: Chapter 5 and 6
Week 6: Chapter 6
Week 7: Chapter 7
Week 8: Chapter 7 and the first midterm exam
At the end of the second 1/3 of the semester, you will be able to:
 Conduct an economic analysis of the features of financial structure;
 Understand the reasons behind the subprime meltdown;
 Read the bank balance sheet;
 Understand general principles of bank management;
 Understand the reasons and drawbacks of bank regulation.
Week 10: Chapter 8
Week 11: Chapter 9
Week 12: Chapters 10
Week 13: Chapters 11-12, the second midterm exam
At the end of the semester, you will be able to:
 Understand the creation and determination of money supply;
 Understand the determination of the federal fund rate;
 Understand the pros and cons of monetary policy tools.
Week 14: Chapter 3, Chapter 14
Week 15: Chapter 14
Week 16: Chapter 15
Course Policy
Academic dishonesty is defined as cheating of any kind, including misrepresenting
one’s own work, taking credit for the work of others without crediting them and
without appropriate authorization, and the fabrication of information.
1. To be fair to all students, I do NOT give extra credit for any work which
is not a requirement for all students in class. Please do NOT request
differential treatment as a way to boost your grades.
2. I allow rescheduling of exams only under EXTRAODINARY
circumstances. Any request to reschedule the midterm exams must be
made within one week of the announcement of the exam date. In case of
rescheduling the exam, you must take the exam before the scheduled date.
3. If severe medical conditions or any catastrophic events prevent you from
taking the exam on the exam date, you must provide me with
documentation confirming your illness or proving the occurrence of those
events to qualify for a makeup exam. You must take the makeup exam
within one week of the original exam date, or receive a 0 for the exam.
4. Students may work together but each must submit his or her own
homework. By own homework, I mean you must use your own words to
answer questions. If two sets of identical homework are submitted, each
will be given only half of the credit.
5. All late homework assignments are subject to a 10% penalty, with the
exception that those late for more than 24 hours are subject to a 50%
penalty. Late homework will not be accepted after the answer key to the
assignment is made available to the class.