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Course Outline for ―Introduction to Money and Banking‖ (ECON
0280)—Spring 2012
Course Code and Title:
ECON 0280 Introduction to Money and Banking
Lecturer:
Dr James R. Maloy
Office: Posvar 4705
Phone: 412 648 7117
E-mail: maloy@pitt.edu
Office Hours: Tuesday/Thursday 1:00-2:00; Thursday 9:30-10:30; other times by
appointment.
Course Aims and Overview:
ECON 0280 is a course on the economics of money, banking and financial markets. The
course aims to provide the student with an introduction to the role of money, financial
markets, financial institutions and monetary policy in the economy, thus providing a solid
foundation for further study or employment in the financial services industry.
There are three main components of the course. First, the role of financial markets in the
economy will be considered with a particular emphasis on bond markets and interest rate
determination. The course will then cover the main aspects of banks and other financial
institutions before turning to an investigation of the role of money, central banking and
monetary policy.
Course Delivery:
The course will be taught through two weekly lectures. Lectures will be used for
lecturing as well as a seminar-type discussion of problem sets. Specific readings for each
class are specified below. The lecturer will be available for consultation during
advertised office hours or by appointment.
Assessment:
The course will be assessed by quizzes/assignments, a mid-term examination, a non-
cumulative final examination.
Six in-class quizzes or out-of-class assignments; the average score of the best
five of the six will constitute 30% of the final grade.
A mid-term examination on Topics 1 – 6 will constitute 35% of the final grade.
This exam will be held during lecture on Thursday 23rd February.
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A final examination on Topics 7 – 13 will constitute 35% of the final grade. It
will be held on during finals week at a time to be announced.
Problem sets will be distributed for each topic and will be discussed in class the
following week. These are not assessed but are a fundamental part of the course.
You are expected to attempt these assignments before coming to class.
You are expected to complete assignments and take examinations on the dates specified.
Late submissions of work or re-sits of examinations are only acceptable in extreme
circumstances, such as serious illness/injury/death in immediate family/jury duty. A
health certificate from a doctor or other evidence will be required. If for any such reason
you cannot meet a deadline you must IMMEDIATELY inform me (by email if possible)
BEFORE the deadline to arrange make-up work. It is your responsibility to keep me
informed of any problems you are having in meeting deadlines.
Note: All work submitted for this course must be your own. Any evidence of cheating
and/or plagiarism in any assignment will be dealt with as specified by the Academic
Integrity Policy, as discussed in the University’s Undergraduate Bulletin.
The Office of Disability Resources and Services (216 William Pitt Union, 412-624-7890)
is available for students who have requested or may request accommodation for a
disability. If needed please contact the office as early as possible in the term.
Grading Scale:
All grades will be given as percentages out of 100. Final average grades will be
calculated by weighting each score according to the weights indicated above and will be
rounded to the nearest integer.
92 – 100: A
90 – 91: A-
88 – 89: B+
82 – 87: B
80 – 81: B-
78 – 79: C+
72 – 77: C
70 – 71: C-
68 – 69: D+
62 – 67: D
60 – 61: D-
0 – 59: F
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Reading:
This course is textbook-based. The primary text will be:
Mishkin, Frederic S. The Economics of Money, Banking, and Financial Markets, 9th
Ed. Pearson Education/Addison Wesley, 2010.
You are required to have access to this book. The 2007 8th edition is acceptable. Earlier
editions are not recommended. You may also wish to order a copy of the accompanying
study guide. The purchase of a new book also includes a subscription to MyEconLab
which contains online study aids, located at www.myeconlab.com/mishkin. Online
chapters not included in the printed textbook are also found at this site.
The other required book for this course is:
Chancellor, Edward. Devil Take the Hindmost: A History of Financial Speculation.
Plume, 2000.
It is also recommended that you read a quality financial newspaper to develop an
understanding of how the course material relates to current events. I recommend reading
one of the following newspapers, either online or in print:
The Financial Times (www.ft.com)
The Wall Street Journal (www.wsj.com)
Supplemental Reading
Similar money and banking texts are available in the library for your reference should the
primary text leave you confused or you want more information. Some of the course
material will be drawn from:
Howells, P and K. Bain. The Economics of Money, Banking and Finance: A European
Text, 3rd ed. Prentice Hall, 2005.
As a large component of this course if macro-based, you may also wish to consult
a macroeconomics textbook to supplement your understanding. Numerous
macroeconomics books are available, such as Froyen (recommended), Gordon or
Blanchard.
A considerable portion of the course will cover topics related to monetary
economics. You may wish to consult a textbook specifically on monetary economics to
improve your understanding of these topics. The following textbooks are recommended:
Bain, K. and P. Howells. Monetary Economics. Palgrave, 2003.
Handa, Jagdish. Monetary Economics. Routledge, 2000.
The course will also touch on areas covered by international finance. Should you
want further information in this area a good undergraduate level text is:
Pilbeam, Keith. International Finance, 3rd ed. Palgrave, 2006.
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Weekly Timetable—Spring 2012
(This schedule is subject to change as events warrant.)
1. Introduction: Money and the Financial System 5, 10 Jan
Readings: Mishkin Chapters 1, 2, 3
2. Understanding Interest Rates 12, 17 Jan
Readings: Mishkin Chapter 4
3. The Behaviour of Interest Rates 19, 24, 26 Jan
Readings: Mishkin Chapter 5
4. The Risk and Term Structure of Interest Rates 31 Jan, 2 Feb
Readings: Mishkin Chapter 6
5. The Foreign Exchange Market 7, 9 Feb
Readings: Mishkin Chapter 17
6. Economic Analysis of Banking 14, 16 Feb
Readings: Mishkin Chapter 8
MIDTERM EXAMINATION (Topics 1 – 6) 23 Feb
7. Banking: Management and Regulation 21, 28 Feb; 1 Mar
Readings: Mishkin Chapters 10, 11 (8th Ed. Ch. 9, 11)
SPRING BREAK (NO LECTURES) 6, 8 March
8. Banking: Structure and Competition 13, 15 March
Readings: Mishkin Chapter 12 (8th ed. Ch. 10)
9. Central Bank Structure 20 March
Readings: Mishkin Chapter 13 (8th Ed. Ch. 12)
10. The Money Supply th 22, 27 March
Readings: Mishkin Chapter 14 (8 Ed. Ch. 13, 14)
11. Theories of Monetary Policy (1) 29 March, 3 April
Readings: Mishkin Chapter 19, 22
12. Theories of Monetary Policy (II) 5, 10 April
Readings: Mishkin Chapters 25
13. Financial Speculation 12, 17, 19 April
Readings: Chancellor Chapters 1, 2, 3, 6, 7, 8
FINAL EXAMINATION (Topics 7 – 13) TBA
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