Money and Banking

The course engages with various questions and topics related to financial markets, banking
system and monetary economics. In the first part of the course, students will learn the meaning,
the behaviors, and the term structure of interest rates. They also explore the fundamental theories
that underlie the valuation of stocks by examining the theory of rational expectations and
efficiency market hypothesis. The banking industry and the main topics in the management of
financial institutions are then discussed in the second part to explore how and why banks make
loans, how they acquire funds and manage their assets and liabilities (debts). Students also learn
how the money supply and money demand are determined and interacted in the money market.
The next part of the course focuses on different aspects of monetary policy undertaken by central
banks. Finally, this course covers discussions on policy implications and lessons from some
well-known financial crises in the past.