Convenor: Chris Bowdler
The role of money in general equilibrium models. Aggregate models of price and output fluctuations. The role of banks and other financial intermediaries. Models of monetary policy. Inflation targeting and other policy regimes. Money and public finance. The transmission of monetary policy to asset prices and exchange rates.
The paper will be set in two parts. Candidates will be required to show knowledge on both parts of the paper. Part A will comprise questions requiring analysis of specific models. Part B will comprise essay questions requiring discussion of the theoretical and empirical literature.
TEACHING ARRANGEMENTS AND ASSESSMENT
The course will consist of 16 lectures. In the academic year 2012-13 there will be 12 lectures by Chris Bowdler and 4 lectures by James Forder. Lectures slides are available below. Students will attend eight tutorials or classes. A list of possible tutorial topics, readings and essay titles/discussion questions is provided below. Please note the majority of students taking Money and Banking do their tutorials in Michaelmas term because fewer tutors are available in the Hilary term.
The course will be assessed by a three hour written examination. As specified in the course rubric, the paper will comprise two parts. Part A questions will refer to specific theoretical models emphasised in the lecture sequence below, and candidates will be required to show knowledge of such models in their answers. Part B questions will be more applied and could require discussion of some aspect of the empirical literature, or a debate relating to a recent episode in the conduct of monetary policy (theoretical material will be of relevance in answering such questions). Candidates will be required to answer three questions in total, including at least one from each part of the paper. Please note that in order to reflect a shift in the composition of the course lectures, the style and number of questions in part A of the exam paper is different to that in part A of the 2008 and 2009 past papers. The best guides to the style of the 2013 exam paper are the 2010, 2011 and 2013 past papers.
Past papers are available via OXAM. Note that the paper was set under the current rubric for the first time in 2008.
The course builds on material taught in the Prelims and Finals courses for Microeconomics and Macroeconomics and assumes familiarity with such topics as expected profit maximisation by firms, the ASAD and ISLM models of aggregate fluctuations, money demand and money supply and the credit/money supply multiplier multiplier.
There is no single textbook for the course, but the following books will prove useful for most of the topics covered:
Walsh, C. Monetary Theory and Policy (2nd
edition). MIT Press,
Romer, D. Advanced Macroeconomics (3rd
A less advanced text that you may find useful for some parts of the course is the following:
Mishkin, F. The Economics of Money, Banking and Financial Markets (8th edition). Addison Wesley, 2006.
Slides for the lectures to be given by Chris Bowdler will be available from the following links.
Lectures 7&8 (the conduct of monetary policy)
Lecture 9 (monetary policy and public finance)
Lecture 10 (monetary policy and the yield curve)
Lectures 11&12 (unconventional monetary policy after the crisis)
An earlier lecture on the credit crunch is here.
A short piece on QE and the inflation outlook is here.
The lectures to be given by James Forder will cover the following topics:
USEFUL ONLINE RESOURCES
A number of topics covered in the course are relevant to current developments in financial markets and policy responses to them. Economics blogs and news websites therefore provide information and commentary that is worth consulting. Some useful links are provided below:
NOTE: When you are using a computer that does not have a university IP address, you will need to have arranged remote access to many of the pages linked to this page, details on how to do this are provided here.
The prelims course comprises 10 weeks of microeconomics and 6 weeks of macroeconomics. The micro component occupies more weeks than the macro component because most of the applications of the Mathematics taught as part of the course involve micro topics. The microeconomics classes and tutorials are given by Abi Adams and Andrew Farlow and the macro classes and tutorials are given by Chris Bowdler and Andrew Farlow.
Prelims course overview (inc. exam info, past papers, examiners' reports etc.)
The core courses (taken in the second year) are Microeconomics (Michaelmas term), Macroeconomics (Hilary term) and Quantitative Economics (Trinity term).
QE tutorials page
Overview of Finals courses (inc. exam info, past papers, examiners' reports etc.)