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CZECH TECHNICAL UNIVERSITY IN PRAGUE
STUDY PLANS
2023/2024

Monetary Economics and Policy

The course is not on the list Without time-table
Code Completion Credits Range Language
G63E4201 Z,ZK 6 2P+2C English

It is not possible to register for the course G63E4201 if the student is concurrently registered for or has previously completed the course 32ME-P-MEPO-01 (mutually exclusive courses).

The requirement for course G63E4201 can be fulfilled by substitution with the course 32ME-P-MEPO-01.

Garant předmětu:
Lecturer:
Tutor:
Supervisor:
Institute of Economic Studies
Synopsis:

This course covers basic concepts from monetary economics, emphasizing how monetary policy can affect the domestic economy. It consists of two major parts. The first one starts with the definition of money, its functions, and monetary aggregates and leads to the inner workings of financial markets, particularly interest rate dynamics. The second one combines the practical conduct of monetary policy by central banks with the theoretical frameworks of what explains inflation in the long run and how monetary policy can stabilize the economy and inflation. The leading textbook is Mishkin (2022) listed with other optional readings below. There will be lectures and exercise sessions, where different problem sets based on lecture materials are solved together in class.

Requirements:

Midterm and non-cumulative final exams count for 40% each of grade. Individual or group ten-minute presentation of students (up to three people), on any subject of this course, counts for the next 20%. Students have a chance to earn additional points by active participation in answering questions or solving problems in class. Attendance at classes is expected to pass successfully the course.

Syllabus of lectures:

•Introduction: What is money?

Interest rate

•The meaning and behavior of interest rates

•The risk and term structure of interest rates

•The stock market, the theory of rational expectations, and the efficient market hypothesis

Conduct of monetary policy

•Central banks and the money supply process

•Tools, instruments, targets, and goals of monetary policy

•The foreign exchange market

•Foreign exchange interventions and exchange rate regimes

Monetary theory

•Quantity theory, inflation, and the demand for money

•The effect of monetary policy on aggregate demand and supply

•Transmission mechanisms of monetary policy

Syllabus of tutorials:

There are exercises and problem sets solved together in class on each topic of lectures.

Study Objective:

The goal is to help students understand the links between monetary policy and aggregate economy and strengthen their capacity to examine macroeconomic issues from a central banker's point of view.

Study materials:

1) Champ, B., Freeman, S., & Haslag, J. H. (2022). Modeling Monetary Economies. New York, NY: Cambridge University Press, 1-390.

2) De Grauwe, P. (2022). Economics of Monetary Union. New York, NY: Oxford University Press.

3) Mishkin, F. S. (2022). The Economics of Money, Banking, and Financial Markets. Harlow, England: Pearson Education, 1-718.

4) Warjiyo, P., & Juhro, S. M. (2019). Central Bank Policy: Theory and Practice. Bingley, England: Emerald Publishing.

Note:
Further information:
No time-table has been prepared for this course
The course is a part of the following study plans:
Data valid to 2024-05-18
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