Materials for courses taught by Chris Bowdler


Ř      MONEY AND BANKING 2012/13

Ř      Information for Oriel PPE and HE students



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.


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, Cambridge MA and London, 2003. A third edition of this textbook was released in 2010 and copies are available in the SSL but not many college libraries. In the tutorial reading lists below, references are provided for both the second and third editions. In most cases the material is the same, though there are a couple of editions in the third edition (noted where relevant in the reading lists).


Romer, D. Advanced Macroeconomics (3rd edition). McGraw-Hill, New York, 2006.


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 1&2 (models of aggregate price and output fluctuations). Supplementary material.

Lectures 3&4 (the monetary transmission mechanism). Supplementary material.

Lectures 5&6 (discretionary monetary policy and time inconsistency). Supplementary material.

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:


  1. The nature of money. The debate as to the historical origins of 'money' and the question of which if any of the traditional functions of money should be thought fundamental.
  2. The quantity theory. Considers the debate over the measurement and importance of the quantity of money.
  3. Monetarism in practice. British policy from 1979 to 1992, including the rationales for the adoption of the various targeting regimes of that period and the reasons for their abandonment; and the adoption of inflation targets.
  4. Central bank independence. What's wrong with central bank independence?




A set of possible tutorial topics corresponding to the Bowdler lectures is here and for the Forder lectures here.


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:

Bloomberg Economy

FT Money Supply

Wall Street Journal: Real Time Economics


Radio Economics

Roubini Global Economics

Mavercon Blog

Brad DeLong’s page

Economist’s View





Economics at Oriel College (top)

Prelims Courses         Finals Courses           Useful pages   Dept of Economics     Lecture lists

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.

Prelims Courses

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.

Micro tutorials page

Micro lectures page

Maths lectures page

Maths workbook

Macro tutorials page

Macro lectures page

Prelims course overview (inc. exam info, past papers, examiners' reports etc.)

Links to pages on topical issues in Economics

Notes on the prelims course

Finals Courses

The core courses (taken in the second year) are Microeconomics (Michaelmas term), Macroeconomics (Hilary term) and Quantitative Economics (Trinity term).

Micro tutorials and lectures page

Macro tutorials page

Macro lectures page

QE tutorials page

QE lectures page

Option papers in Economics

Overview of Finals courses (inc. exam info, past papers, examiners' reports etc.)

Links to pages on topical issues in Economics