Economics 330 Money and Banking - Department of Economics

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					                  Economics 330: Money and Banking
                                 Mehmet Emre Tiftik

                                     Winter 2011

Instructor’s Contact Information
Mehmet Emre Tiftik,, Tydings 4101D
Office hours, TuTh, 11:30-12:30

MTuWTh 9:00-11:30am Tydings 2106

Econ 200 and 201 (principles of micro and macroeconomics) or equivalent. The appendix
of chapter 1 reviews a few concepts that I expect you to know, such as the definitions of
aggregate output and inflation and the distinction between nominal and real variables;
read this if you are rusty.

Please note that this is not the ”winter” version of Econ330 taught over the regular
semester; it is the fall course taught in winter.

Recommended Text
The Economics of Money, Banking, and Financial Markets (Frederic S. Mishkin) 9th

Email and Course Web Page
The University has adopted email as the primary means of communication outside the
classroom. Students are responsible for updating their current email address via the
appropriate link on New information (e.g.,
problem sets, grades) will be provided through email. I will use blackboard (ELMS) as a
course webpage. Relevant lecture documents will be posted here.

Examinations, Problem Sets, and Grades
Department of Economics’ policy on grading requires instructors to use the grading
system announced at the beginning of the semester in all cases. I cannot make any
exceptions to that rule. There will be no opportunity for extra credit after the semester
ends. Your grade will be determined by your performance on the following assignments,
weighted as indicated.

Problem Sets:                        20%
Midterm Exam:                        30%
Comprehensive Final Exam:            50%

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There will be two Problem Sets which will count for 20% of the grade and it is highly
recommended you solve them. Problem sets will be announced in class and posted on the
course's web page for downloading a week in advance. I prefer that you bring paper
answers to class. Your answers should be your own. Problem Sets will be graded on
effort; anyone making honest effort at all parts of each problem will get full credit.
Honest effort means you must show your math and use your own words.

The exams will be closed-book and closed-note. You will need a calculator for exams.
Only four function and scientific calculators are allowed — financial or programmable
calculators are not. The first midterm is scheduled for January 11 in class. The Final
Exam is cumulative and includes the entire material covered during the course. Exams
will have an assay format. The lectures and problem sets are the best guide to what will
be on the exams.

Due dates (Problem sets are to be handed in hard copy at class on the date due.)

    01/10            Problem Set 1
    01/11            Midterm
    01/19            Problem Set 2
    01/20            Final Exam

Late Policy
No late homework will be accepted. You are required to take all examinations. If you
anticipate missing an exam because of a religious observance or participation in
University activities at the request of a University official, you must inform me within the
first three days of the semester. A make-up exam for each of the two in-class exams
can be given ONLY for those with a valid University excuse. (See Chapter 4 of the
Undergraduate Catalog, online at If you
miss an exam because of illness that can be documented by a medical professional, you
must inform me within 24 hours of the scheduled exam in order to take the make-up. If
you miss a midterm exam for any other reason, then you can take a make-up at a time
selected by me, and you will automatically lose 25% of the maximum points possible for
that exam. If you fail to show up for the make-up, then you will earn a zero for that exam.
If you miss the final exam without a valid excuse, the 25%- deduction make-up option
does not apply, and your score will be a zero. Note: make-up exams are not given for
students whose travel plans conflict with the date of the scheduled final.

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Academic Integrity
The University of Maryland has a nationally recognized Code of Academic Integrity,
administered by the Student Honor Council. This Code sets standards applicable to all
undergraduate students, and you are responsible for uploading these standards as you
complete assignments and take exams in this course. Please make yourself aware of the
consequences of cheating, fabrication, facilitation, and plagiarism (For more information

Expectations of Students
You are expected to attend lecture regularly, fully utilize the textbook and other course
materials, complete problem sets on time, and every day check the course blackboard
(elms) for updated information. You are expected to read the assigned chapters and
reading materials before class. Research shows that students who actively participate in
class tend to learn significantly more than those who only passively listen. You should
ask questions, articulate your ideas and concerns out loud, and if you find that you can’t
follow the logic of lectures, please visit office hours before exams and due dates for

You are expected to attend all lectures. I will not take attendance; however, be aware that
a lot of material will be covered (quickly). If you cannot make it to class for whatever
reason, make sure that you know what happened during the lecture that you missed. It is
your responsibility, and nobody else’s, to do so!

Preliminary Course Outline
The course outline is mainly based on 9th edition of the textbook although I will
sometimes differ in the order of topics covered, or how a particular model is presented.
Depending on how the class progresses, minor changes in the program may be made.

     Week 1     Chapter 4 – Understanding Interest Rates
                Chapter 5 – The Behavior of Interest Rates
                Chapter 6 – The Risk and Term Structure of Interest Rates
                Chapter 8 – An Economic Analysis of Financial Structure
                A Case Study: The 2008 Financial Crisis
     Week 2     Chapter 10 – Banking and the Management of Financial Institutions
                Chapter 3 – What is Money?
                Chapter 14 – Money Supply Process
                Chapter 15 -- Tools of Monetary Policy
     Week 3     Chapter 19 – Demand for Money
                Chapter 20 – The ISLM Model
                Chapter 21 – Monetary and Fiscal Policy in the ISLM Model
                Lecture Notes: Three Equation Model IS-PC-MR

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