Course Details
Course Information Package
Course Unit Title | MONETARY ECONOMICS | ||||||||||
Course Unit Code | AFME325 | ||||||||||
Course Unit Details | |||||||||||
Number of ECTS credits allocated | 5 | ||||||||||
Learning Outcomes of the course unit | By the end of the course, the students should be able to:
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Mode of Delivery | Face-to-face | ||||||||||
Prerequisites | ABSE204 | Co-requisites | NONE | ||||||||
Recommended optional program components | NONE | ||||||||||
Course Contents | Financial instruments, markets and institutions Financial institutions. Financial instruments and markets (bonds, stocks, mortgages, derivatives). Financial intermediaries: purpose and profile. Banking vs. non – banking financial institutions.
Interest rate measurement and behaviour Calculating interest rates (simple, compound, coupon, current yield, yield to maturity, zero coupon). The bond market. Inverse relationship between yields and bond prices, long term versus short term, nominal versus real, annual versus yield to maturity. Factors, determining the level of interest rates (supply and demand, inflationary expectations, cyclical and long term trends).
Understanding foreign exchange The foreign exchange market. Factors, determining foreign exchange rates fluctuations. Fixed versus floating exchange rates systems. The impact of foreign exchange fluctuations on economic activity.
Monetary theory Classical economics. The quantity theory of money. The
Central banking The nature and the functions of the Central Bank. The Central European Bank vs. National Central Banks. The Central Bank of
The IS-LM model Assumptions of the IS-LM model. Equilibrium in the real sector and the IS curve. Equilibrium in the money market and the LM curve. IS-LM analysis in an open economy under fixed and under floating exchange rate, under perfect capital mobility and perfect capital immobility. Effectiveness of monetary and fiscal policies from the perspective of the IS-LM model. Empirical evidence on the effectiveness of monetary policy in an open economy. | ||||||||||
Recommended and/or required reading: | |||||||||||
Textbooks |
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References |
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Planned learning activities and teaching methods | Ex cathedra lectures and discussions in class, by means of traditional tools or using computer demonstrations. Some of the key issues are revealed on the basis of simulation games. Auditory exercises, where examples regarding matter represented at the lectures, are solved and further, questions related to particular open-ended topic issues are compiled by the students and answered, during the lecture or assigned as homework. Topic notes are compiled by students, during the lecture which serve to cover the main issues under consideration and can also be downloaded from the lecturer’s webpage. Tutorial problems are also submitted as homework and these are solved during lectures or privately during lecturer’s office hours. Further literature search is encouraged by assigning students to identify a specific problem related to some issue, gather relevant scientific information about how others have addressed the problem and report this information in written or orally. | ||||||||||
Assessment methods and criteria |
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Language of instruction | English | ||||||||||
Work placement(s) | NO |