The University of Michigan-Dearborn
Department of Social Sciences
ECON 311, Money and Banking
Winter 2005
Instructor:
Ilir Miteza
Office hours:
TR 9:15-9:45 and 11:20-12:20, or by appointment
Office:
SSB, Room 2260
Phone:
313-583-6407
E-Mail:
imiteza@umd.umich.edu
Class Meetings:
1600 SSB, TR 1:05 – 2:20pm
Course Description:
Econ 311 deals certainly with money, but also with financial instruments that are analogous to
money. It deals with banks, and at the same time with financial institutions that compete with
banks. In effect it is the study of the financial system, its regulation, and its most important
components like money, the banking industry, and the central bank. We will focus mostly on the
U.S. financial system while paying some attention to other countries’ systems. We will examine
institutions as well as economic theory and policy. A significant amount of time will be devoted
to understanding how financial markets function in a financially advanced economy, how
institutions and instruments have developed, how efficient the financial system is in allocating
resources. Macroeconomics and monetary policy also take a fair share of the course time.
Required Text:
F. S. Mishkin, The Economics of Money, Banking, and Financial Markets, 7th Edition, Addison
Wesley. A powerful Companion Website can be accessed for free at
www.awlonline.com/mishkin. The web site features a collection of news articles relevant to each
chapter, current weekly news, along with questions to answer, glossary flashcards to review the
key terms from the textbook, multiple choice quizzes to test understanding of each chapter, web
links to the websites mentioned in the textbook, etc.
Course Website
Use the links on my web page to stay current with announcements, problem sets, review sheets,
answer sheets and notes. http://www-personal.umd.umich.edu/~imiteza/
1) Notes, materials and announcements will be posted on the UM Coursetools website:
https://coursetools.ummu.umich.edu/
2) Assignments, interactive tutorials, and online experiments will be found at www.aplia.com
Students are responsible for staying current with both websites. There is a term fee for signing up
at Aplia.com
Attendance and
Participation:
You are expected to attend all lectures. Poor attendance is usually correlated with lower grades.
During the semester there will be several unannounced graded in-class assignments. Some exam
questions will reflect material not found in the textbook, but discussed or presented in lectures.
The intention is to have the class discussions elaborate and expand upon the assigned readings
rather than having class lectures simply replicate these materials. Good class participation will be
considered "at the margin" for grading purposes.
Examinations and
Grading Policy:
There will be four non-cumulative exams covering material discussed in class as well as
additional assignments – three midterms and a final. Out of three midterm exams, the worst will
be dropped. Each remaining midterm weighs 30%, the final exam weighs 20% and home
assignments will account for 20% of the final grade. Grading will be based on a curve where the
median is assigned a C+. There is no absolute curve.
Extra Credit:
Details and options on extra credit assignments will be discussed in class in due time.
Make-up Exams:
Please ensure that you have no scheduling conflicts during lecture times for this semester because
make-up exams will be given only in the case of well-documented emergencies on the
scheduled exam day and if I am informed as soon as possible. Students that plan to miss
exams for religious reasons should notify me in advance.
Articles:
I will assign readings from articles (mostly emailed to the class list) that are relevant to the
lectures, and that may be included in exams.
The University of Michigan-Dearborn
Department of Social Sciences
Academic Integrity:
The University of Michigan – Dearborn values academic honesty and integrity. Each student has
a responsibility to understand, accept, and comply with the University’s standards of academic
conduct as set forth by the Code of Academic Conduct, as well as policies established by the
schools and colleges. Cheating, collusion, misconduct, fabrication, and plagiarism are considered
serious offenses. Violations will not be tolerated and may result in penalties up to and including
expulsion from the University.
Students With
Disabilities:
The University will make reasonable accommodations for persons with documented disabilities.
Students need to register with the Disability Resource Services every semester they are taking
classes. DRS is located in Counseling and Support Services in 1060 UM. To be assured of having
services when they are needed, students should register no later than three weeks after the first
day of classes (by September 26, 2001). For more information contact Nancy Lehnert, Disability
Resource Services Assistant; University of Michigan-Dearborn; 313-593-5430.
E-mail
Communication:
I will only use your UMD email address for class or individual communications. If you do not
check your UMD e-mail account on a regular basis, you need to set up the “forward” option so as
to have your UM-D email forwarded automatically to your preferred e-mail address.
Tentative Course Outline
Week of
CHAPTER
TOPICS
I.
Jan. 10
Jan. 17
1.
Why Study Money, Banking, and Financial Markets?
2.
An Overview of the Financial System
3.
What is Money?
II.
Jan. 24
Jan. 31
INTRODUCTION
FINANCIAL MARKETS
4.
Understanding Interest Rates
5.
The Behavior of Interest Rates
6.
The Risk and Term Structure of Interest Rates
7.
Stock market, rational expectations, and the efficient market hypothesis
FIRST EXAM
III.
9.
FINANCIAL INSTITUTIONS
The Banking Firm and the Management of Financial Institutions
Feb. 7
10.
Banking Industry: Structure and Competition
Feb. 14
11.
Economic Analysis of Banking Regulation
Feb. 21
13.
Financial Derivatives
Mar. 7
SECOND EXAM
IV.
CENTRAL BANKING AND THE CONDUCT OF MONETARY POLICY
14.
Structure of Central Banks and the Federal Reserve System
Mar. 14
15.
Multiple Deposit Creation and the Money Supply Process
Mar. 21
17.
Tools of Monetary Policy
Mar. 28
THIRD EXAM
18.
Conduct of Monetary Policy: Goals and Targets
18.
Conduct of Monetary Policy: Goals and Targets
V.
MONETARY THEORY
Apr. 11
24.
Aggregate Demand and Supply Analysis
Apr. 18
26.
Money and Inflation
Apr. 4
FINAL EXAM
*Note: midterm and quiz dates are approximate.