ECON 304 Section 1

Money and Banking

Fall 2004

CBC C 227

MW 5:30 – 6:45 pm

Instructor

Bernard Malamud

Office: BEH 502

Phone: 895 – 3294 Fax: 895 – 1354

Office Hours: M 2:30 – 4:30 pm; W 3:30 – 5:30 pm; and by appointment

e-mail:

Website: www.unlv.edu/faculty/bmalamud

General Nature of the Course

This course treats the nature of money and the determination of the quantity of money by the public, commercial banks, and the Federal Reserve. The course entails intensive analysis of commercial banking, money and capital markets, interest rate determination, and the foreign sector. Prerequisites: Junior Standing; Econ 103

Course Objectives

After taking this course, you will understand the important roles played by banks and other financial intermediaries in the national and global economies; the determination of asset prices in financial markets; the ways in which financial institutions operate; and the conduct and impacts of monetary policy. You will gain an appreciation of innovations in financial practice, changes in financial regulation, and interactions between finance and industry. The relevance of economic analysis and policies will become evident to you as you follow events in the national and international financial sectors that unfold during the semester.

Text

·  Frederic S. Mishkin, Economics of Money, Banking, and Financial Markets, 7th edition, Addison-Wesley, 2004.

·  Frank Partnoy. Infectious Greed: How Deceit and Risk Corrupted the Financial Market, Times Books, 2003.

Supplements:

·  Wall Street Journal (available at student subscription rates)

·  The Economist


Examinations and Grading

Two 100 - point classroom exams and a 150 - point comprehensive final will be given this semester. You will be able to rewrite your answer to one question on each classroom exam at home. Your score for the question will be the average of your classroom score and your rewrite score. In addition, one textbook “discussion problem” will be given as a 10-point quiz at the end of each of seven scheduled problem sessions.

Oct 11 Classroom Exam, Chapters 1 – 7,13 100 points

Nov 17 Classroom Exam, Chapters 8,10,12,14-18 100

Seven “discussion problems” 70

Dec 15 Comprehensive Final Examination 150

Maximum Total Score 420 points

Approximate Grade Distribution

Average Score

(out of 420 points)

90 % Borderline A-

80  Borderline B-

70  Borderline C-

60  Borderline D-

Attendance and classroom participation will affect your final grade.

Makeup Policy

Makeup exams may be arranged at mutual convenience if you have a compelling reason to miss a scheduled classroom exam. A makeup exam must be taken before the missed exam is returned to the class. There will be no makeup quizzes or final exam.

Class Conduct

Your instructor and classmates deserve courtesy. If you must arrive late or leave early, do so quietly. Inform me beforehand if you must leave a class early. Smoking and eating in class are prohibited. Talking to your neighbors in class and reading newspapers and magazines is rude, disruptive, and unacceptable. While this probably need not be said, anyone found engaging in any act of academic dishonesty will be punished in accordance with UNLV policies.

Other Information

If you have a documented disability that may require assistance, you will need to contact Learning Enhancement Services for coordination in your academic accommodations. LES is located in the Reynolds Student Services Complex in Room 137. The LES phone number is 895-0866 (TDD 895-0652) and .

Course Outline

Dates /

Topics, Discussion Problems

Do each “discussion problem” before class. Treat it like homework. While it will not be collected, you will be expected to participate in its discussion. In addition, one discussion problem will be given as a 10- point quiz at the end of each of the seven-scheduled problem sessions.

/ Readings In Text
Aug 30 – Sep 8
Sep 8
Sep 6
Sep 13 – 22
Sep 22
Sep 27 – Oct 4
Oct 4
Oct 6
Oct 11
Oct 13 – 20
Oct 20
Oct 25 – Nov 1
Nov 1
Nov 3 – 10
Nov 10
Nov 15
Nov 17
Nov 22 – 29
Nov 29
Dec 1
Dec 6 – 8

Dec 15

/

Financial Markets

Course Organization
Money, Banking, and Financial Markets: Key Concepts
The Financial System: Key Players
Money: Key Measures
Problems: Chapter 1/Problems 4,5,11 2/3,13,15 3/6,8,10
Labor Day Recess
Understanding Interest Rates
Interest Rate Behavior
Risk and Term Structure
Problems: 4/1,7,9,15 5/4,6,12,17 6/2,6,8
The Stock Market
Financial Derivatives
Partnoy, Infectious Greed
Problems: 7/4,10 13/5,6,9,14
Catch-up and review

Classroom Exam, Chapters 1 – 7,13

Financial Institutions
Economic Underpinnings of Financial Structure
Banking Industry Structure
Non-Bank Financial Institutions
Problems: 8/5,6,8,14 10/8,15 12/7,13

Monetary Policy

Central Banking: Federal Reserve System
Determinants of the Money Supply
Problems: 14/5,8 15/15 16/3,10,11
Monetary Policy Tools
Conduct of Monetary Policy
Problems: 17/2,7,8,11 18/3,4,7,11
Catch-up and review
Classroom Exam: Chapters 8,10,12,14-18
Monetary Policy Strategies
Transmission Mechanisms of Monetary Policy
Problems: 21/4,6,7,10,18 26/9,11,12
Financial Crises: The US Experience
Review: Problems Past

Comprehensive Final Examination 6 – 8 pm

/ Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 7
Chapter 13
Chapter 8
Chapter 10
Chapter 12
Chapter 14
Chapters 15,16
Chapter 17
Chapter 18
Chapter 21
Chapter 26
pp.146,191,194,300387,404,421625