Financial Markets and Institutions Mishkin Ch3 CORNELL UNIVERSITY DEPARTMENT OF ECONOMICS ECON 3310 Money

							               CORNELL UNIVERSITY, DEPARTMENT OF ECONOMICS
                       ECON 3310: Money and Credit, Fall 2010
                 TR 02:55:PM-04:10:PM, Goldwin Smith Hall G76-Lewis

This course provides a systematic treatment of the determinants of the money supply and the
volume of credit. It provides an economic analysis of credit markets and financial institutions in
the United States, and discusses the structure of central banks, the conduct of monetary policy, and
the monetary transmission mechanism.

   • Instructor: Karel Mertens, 454 Uris Hall
     → Office Hours: MW 3:00-4:00PM

   • Teaching Assistant: Roland Heinze, 465 Uris Hall
     → Office Hours: MW 1:15PM-2:45 PM

   • Email: ECON331@cornell.edu (Use this email for all issues related to this course.)

   • Web Page: http://courses.cit.cornell.edu/econ331/ECON331.html

   • Required Textbook:“The Economics of Money, Banking and Financial Markets, Ninth Edi-
     tion”, by Frederic S. Mishkin; Background reading material and additional course slides are
     posted on the course website.

   • Prerequisites: ECON 1110 - 1120 and 3140. The technical demands of this course are mild.

   • Grading:

         – Home Work Assignments: 20%
         – In Class Preliminary Exam 1: 15% Tuesday 5 October
         – In Class Preliminary Exam 2: 15% Thursday 4 November
         – Final Exam: 50% Tuesday 14 December, 9:00 AM-11:30 AM (To be confirmed)

Course Outline:

PART I: INTRODUCTION
  What is Money? (M8: CH3 ; M9: CH3)
PART II: FINANCIAL MARKETS
  Understanding Interest Rates (M8: CH4 ; M9: CH4)
  The Behavior of Interest Rates (M8: CH5 ; M9: CH5)
  The Risk and Term Structure of Interest Rates (M8: CH6 ; M9: CH6)

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  The Stock Market (M8 CH7 ; M9: CH7)
PART III: FINANCIAL INSTITUTIONS
  An Economic Analysis of Financial Structure (M8: CH8 ; M9: CH8)
  Banking (M8: CH9-10-11; M9: CH10-11-12)
PART IV: CENTRAL BANKING AND THE CONDUCT OF MONETARY POLICY
  The Structure of Central Banks and the Federal Reserve (M8: CH12 ; M9: CH13)
  Multiple Deposit Creation and the Money Supply Process (M8: CH13 ; M9: CH14)
  Determinants of the Money Supply (M8: CH14 ; M9: CH14)
  Tools of Monetary Policy (M8: CH15 ; M9: CH15)
  What Should Central Banks Do? (M8: CH16 ; M9: CH16)
PART V: INTERNATIONAL FINANCE
  The Foreign Exchange Market (M8: CH17 ; M9: CH17)
  The International Financial System (M8: CH18 ; M9: CH18)
PART VI: MONETARY THEORY
  The Demand for Money (M8: CH19 ; M9: CH20)
  The ISLM Model (M8: CH20 ; M9: CH20)
  Monetary and Fiscal Policy in the ISLM Model (M8: CH21 ; M9: CH21)
  Aggregate Demand and Supply Analysis (M8: CH2 ; M9: CH22)
  Transmission Mechanisms of Monetary Policy (M8: CH23 ; M9: CH23)
  Money and Inflation (M8: CH24 ; M9: CH24)
  Rational Expectations: Implications for Policy (M8: CH25 ; M9: CH25)

   M8: Mishkin 8th edition ; M9: Mishkin 9th edition




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