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University of Alberta Department of Economics ECON 341 – B2: Money and Banking
Winter term 2018 Course outline Instructor: Dr. Abdul Aleem
Class Times: MWF 12:00PM - 12:50PM Classroom: TB 87
Email: [email protected]
Important email note: If you send me an email, please include the course number in the subject area.
Office: Tory 7 – 20
Office hours: TTH 9:30AM – 10:30AM
Other times can be arranged by seeing me before or after class or by sending me an email.
Course Objectives
Money in the modern economy is often viewed as the grease that lubricates the wheels of economic activity. More importantly, the supply of money may affect how rapidly the economy grows, the level of employment, the rate of inflation, and the return properties of financial assets (e.g. stocks and bonds). Banks and other financial institutions perform critical functions in allocating money to households and firms, which in turn determines how money performs its function of facilitating economic activity. This course studies the role of money in the economy and the function of financial institutions and markets with focus on the Canadian economy. The purpose of ECON 341 is to familiarize students with the financial system and to understand the theory and practice of monetary policy. The topics will be a blend of theoretical modeling and empirical/historical analysis.
Course Prerequisite: ECON 282. Students may not receive credit for both ECON 341 and FIN 414.
Textbook: The economics of Money, Banking, and Financial Markets; by Mishkin F. & Serletis A., 6th Canadian Edition, 2016.
eClass
eClass can be accessed via the homepage at www.elearning.ualberta.ca. It is accessed with the same login and password that you were assigned for your University of Alberta email account. Here you will find the course outline, lecture notes, and past exams.
2 Topics:
1. Introduction
1.1. An overview of the financial system Chapter 2
1.2. What is money? Chapter 3
2. Financial markets
2.1. The meaning of interest rates Chapter 4
2.2. The behaviour of interest rates Chapter 5
2.3. The risk and term structure of interest rates Chapter 6 2.4. The stock market, the theory of rational expectations,
and efficient market hypothesis Chapter 7
3. Financial institutions
3.1. An economic analysis of financial structure Chapter 8
3.2. Financial crises Chapter 9
4. The management of financial institutions
4.1. Banking and management of financial institutions Chapter 12 4.2. Risk management with financial derivatives Chapter 13
5. Monetary policy
5.1. The money supply process Chapter 15
5.2. Tools of monetary policy Chapter 16
5.3. The conduct of monetary policy: Strategy and tactics Chapter 17
6. International finance
6.1. The foreign exchange market Chapter 18
*Course outline may be subject to change as the course progresses. Topics may be dropped or added as time allows.
Assessment and Exam Dates:
You will be graded on class participation through ePoll class response system, two term exams, and a comprehensive final. Term exams are not cumulative. Comprehensive final exam will cover all topics in the term. The questions on the exams will be of the short answer variety and may involve the manipulation of diagrams as well as, possibly, simple mathematical calculations. Please note that the material in the lectures is important as my exam tend to be closely related to the material I cover in class. There will be NO multiple choice questions on the exams. There will be NO choice of questions on either exam. The exams are of the closed book type. No notes can be consulted during the exams.
The final exam is scheduled by the University. You may not write this exam at any other time unless you receive permission from your home faculty to write a deferred exam.
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In test situations, you will need pens, pencils, erasers, a non-programmable calculator (or a calculator that is easy to reset), and your student ID. Cell phones, electronic translators, and other electronic devices are not permitted into tests/exams.
Make-up exams will not be allowed for the term exams. If you miss a term exam you will not receive a mark unless you provide me with a "Medical Declaration Form" (available on the Faculty of Arts USS forms page). In that event, the marks for the term exam missed will be transferred to the final exam.
ePoll:
We will be using the ePoll (https://srs.srv.ualberta.ca) classroom response system in class. You will be able to submit answers to in-class questions using Apple or Android smartphones and tablets, laptops, or through text message. Use your U of A credentials to log in. Every class you will be provided a poll code that you will need to enter the poll. "Starting soon" message will display until the polling starts. There are 6 marks (Out of 100) for submitting answers to in-class questions, and 4 marks for correct answers. All grades will be posted on eClass. 5 lowest ePoll grades will be dropped.
Marking
Grades will be based on: Date Location* Total
ePoll Every class In-Class 10%
Term exam I Friday, Feb. 9, 2018 TBA 20%
Term exam II Friday, March 16, 2018 TBA 20%
Final exam (Cumulative)* TBA TBA 50%
*Please confirm the final exam date when exam dates are finalized by the University. Location for exams is subject to changes. Please confirm the exam location before each exam.
The formula given above will be used to compute a grade out of one hundred for the course. In translating these numeric grades to letter grades, letter grades will be assigned in an attempt to achieve a grade point average between 2.7 and 3.3 (ie. approximately a B). Note however that, depending on circumstances, the grade point average of the class may lie outside of this interval.
UNIVERSITY POLICIES
o “Policy about course outlines can be found in §23.4(2) of the University Calendar.”
o “The University of Alberta is committed to the highest standards of academic integrity and honesty. Students are expected to be familiar with these standards regarding academic honesty and to uphold the policies of the University in this respect. Students are particularly urged to familiarize themselves with the provisions of the Code of Student Behaviour (online at www.governance.ualberta.ca) and avoid any behaviour which could potentially result in suspicions of cheating, plagiarism, misrepresentation of facts and/or participation in an offence.
Academic dishonesty is a serious offence and can result in suspension or expulsion from the University.”
o Audio or video recording, digital or otherwise, of lectures, labs, seminars or any other teaching environment by students is allowed only with the prior written consent of the instructor or as
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part of an approved accommodation plan. Student or instructor content, digital or otherwise, created and/or used within the context of the course is to be used solely for personal study, and is not to be used or distributed for any other purpose without prior written consent from the content author(s).
Notes
• The Department of Economics General Office is CLOSED from 12-1 PM.
• Important Resources:
o Student Accessibility Services: If you have a condition that may require some classroom or exam modifications, please contact SAS (www.ssds.ualberta.ca) to obtain a determination as to what accommodations should be made. [More possible syllabus statements here].
o Student Success Centre: The Student Success Centre (www.studentsuccess.ualberta.ca) offers a variety of learning resources, including a variety of workshops in learning effective study and exam strategies. Sessions are available in person and online, for a modest fee.
o Centre for Writers: The Centre for Writers (www.c4w.ualberta.ca) offers free one-on-one writing coaching to all students. Students can request consultation for a writing project at any stage of development, including completed and graded work.