Monetary Economics
Econ 135
Winter 2012 - Henning Bohn
UC Santa Barbara


Welcome to Monetary Economics! Posted below are the course outline and various supplemental materials. Assignments are posted on GauchoSpace. New items will be posted throughout the quarter. Best check before each class.

Shortcut to Next Class

• Link to GauchoSpace


Announcements/New Items

• I enjoyed teaching you and hope you will find the class useful in your career. Have a pleasant spring break!

• Information for Summer 2012 will be posted in mid-June. If the class fills up: I follow the waitlist procedures as posted by the Economics Department.



General Information

•    Brief Course Description .

Prerequisites: Econ 101 or equivalent preparation in Intermediate Macro is required for Econ 135. This is an essential prerequisite - no exceptions.

Office hours (Winter 2012): Mo & Wed 2-3pm, unless otherwise noted.
 
E-mail: bohn@econ.ucsb.edu. Always put "Econ 135" in the subject line.

Textbook: Mishkin, The Economics of Money, Banking, and Financial Markets, 9th edition.
•    Suggestions on Readings
Note: All references in class are to the most recent, 9th edition. If you are using an older edition YOU are responsible for spotting differences. Though older editions have some similar content, some chapters are new and all the pages numbers are different. This course does not require access to the publisher's website. For the benefit of students who bought a new book, a MyEconLab code will be posted on GauchoSpace.
Course Requirements:
Exam Dates:    Midterm: Tuesday, February 14, in class.
                        Final: Wed. March 21, 7:30-10:30pm (set by the registrar).

The grade is based on six assignments (25% total), a midterm quiz (25%), and a final exam (50%). The assignments are 3 Problem Sets and 3 Monetary Economics Diary entries. Each assignment is worth 5 points. You must submit at least 5 of the 6 assignments. If you submit all 6, the 5 best scores count. That is, you may miss one assignment without penalty, but no excuses of any kind are accepted, and no late submissions.

For more information about the exams see:
•    General Information about Exams

The Problem Sets will help you study and reinforce the class material. Problem set content and due dates are posted on GauchoSpace.

The Monetary Economics Diary will reward you for keeping track of current events. The calculations will be explained in class. For written information, see Information about the Diary and the Note on Financial Data. The due dates and time periods for return calculations are posted on GauchoSpace.
News and market data:
You are expected to keep up with current macroeconomic news. The best source for financial and economic information is the Wall Street Journal:
  1. The Markets Data Center for financial data. 
  2. The Online edition for general news, or the print edition. Most of WSJ.com is unfortunately subscription-based, though the data are free. (Also, I understand you can access the full WSJ content through the UCSB Library. But I don't keep up with how this works; best ask the Library.)
Alternative source is bloomberg.com:
  1. Bloomberg.com: news - gives you current economic news. Check the headlines: Read stories that relate to the Fed, money, and broad financial markets.
  2. Bloomberg.com/markets/... - provides information on interest rates and links to other market data. Good for quick updates (for diary entries, WSJ is better).

Course Outline and Readings

Brief Course Description
Slides01   
Mishkin ch.1.
Note on Financial Data     

(2)    Financial and Monetary Institutions

(3)    Interest Rates and Total Returns   

Part II. Classical Finance and Monetary Theory

(4)    Demand and Supply for Financial Assets

(5)    Demand and Supply: Applications  

(6)    Money and Prices: Theory 

(7)    Money and Prices: Examples

Part III. New Keynesian Monetary Theory

(8)    Money and Output

(9)     Money and Interest Rates

Lecture Note: Real Effects, Sections 4-6.

Review for midterm:
Old midterm will be posted on GauchoSpace.
Read: Information about Exams.

(10)    MIDTERM: in class.

Bring a small scantron card. Bring a picture ID.

(11)    Money and Financial Markets

(12)    Monetary policy and the Term Structure

(17)   Government Debt and Monetary Policy

Slides17 [revised on 3/1/12]
Optional: Mishkin ch.24, pp. 627-639.
Optional: Discussion paper (2010)

Part IV. Banks, Money Supply, and Fed Funds

(13)    Banking

(14)    The Money Supply 

(15)    The Fed-Funds Market

(16)    Central Bank Strategy (OMITTED )

(18)   Additional Topics (NA)

             Additional topics: TBA. Slides and readings would be posted later.

(19)    Review for the final.

Next

          FINAL EXAM


Please send comments and questions to bohn@econ.ucsb.edu

If you run into technical problems or errors, I would appreciate an email. Some links may only be accessible from a UCSB server.

All documents provided on this class page are copyrighted
[(C) Henning Bohn 2011] and intended exclusively for students enrolled in Econ 135. The copying, sale, posting, or other distribution of documents provided here for any commercial purposes is not permitted. The Student Code of Conduct prohibits posting or sale of notes and materials without permission.