International Monetary Economics:
School of Economics, UCD
January 18, 2010
Karl Whelan (UCD) Introduction January 18, 2010 1/7
What’s This Module About?
What’s “International Monetary Economics” about?
Monetary refers to monetary policy, carried out by central banks.
I spent 11 years working in central banks:
1996-2002 at the Federal Reserve Board in Washington DC.
2002-2007 at the Irish central bank, regularly involved with the
European Central Bank in Frankfurt.
Currently, I act as a consultant to the Irish Central Bank and as an advisor
to the European Parliament in relation to their dealing with the European
On the grounds that you should teach what you know, this course will
mainly focus on how the international central banks, such as the Fed and
ECB, carry out monetary policy and its eﬀects on the economy.
Some focus in later weeks on speciﬁcally “international” issues like exchange
rates and current account deﬁcits.
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You’ll Be Learning About What This Guy is Up To
Karl Whelan (UCD) Introduction January 18, 2010 3/7
And What This Guy Did–Good and Bad!
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And What These People Do
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Quick Guided Tour
The course will have ﬁve parts to it:
1 Banks, Financial Intermediation and Central Banks
How banks operate; why they are important; where central banks ﬁt in;
how they control interest rates.
2 Financial Instability
How banking crises come about; policies to prevent and deal with
crises; understanding the 2007/2008 international ﬁnancial crisis and
how governments acted to contain it; the Irish banking crisis.
3 How Central Banks Aﬀect the Economy
Term structure of interest rates; default risk and collateral; asset prices,
eﬀects of real interest rates on consumption and investment.
4 The Limits of Monetary Policy and Central Bank Strategy
Inﬂation and the Phillips curve; central bank institutions; goals and
strategies; rules for setting interest rates.
5 Exchanges Rates and International Financial Flows
Relationship between exchange rates and interest rates; ﬁnancial
globalization; current account imbalances.
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How the Module Will Work
Lecture notes like these will be the main course material.
Available at www.karlwhelan.com. I do not use Blackboard.
There is no textbook. If you really want a textbook, you could buy either
The Economics of Money, Banking, and Financial Markets by Frederic
Mishkin or Money, Banking and Financial Markets by Steve Cecchetti.
Additional readings: Speeches by central bankers and papers, all linked to on
Assessment: 30% for mid-term, 70% for ﬁnal exam.
Contacting me: Room D216 Newman Building. Telephone: 716-8239. No
set oﬃce hours but call by if you want to talk. Email (email@example.com)
is the best way to arrange to meet me.
Warning: Mostly the course is not too technical but there will be occasional
forays into algebra.
Keeping up with current events: Two great economics websites are
Calculated Risk (www.calculatedriskblog.com) and Econbrowser
(www.econbrowser.com). www.irisheconomy.ie for stuﬀ on Irish banking.
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