BAHÇEŞEHİR UNIVERSITY BİLGİ PAKETİ / DERS KATALOĞU
| ECONOMICS | |||||
| Bachelor | TR-NQF-HE: Level 6 | QF-EHEA: First Cycle | EQF-LLL: Level 6 | ||
Course Introduction and Application Information
| Course Code | Course Name | Semester | Theoretical | Practical | Credit | ECTS |
| ECO3731 | Monetary Theory and Policy | Fall | 3 | 0 | 3 | 6 |
Basic information
| Language of instruction: | English |
| Type of course: | Must Course |
| Course Level: | Bachelor’s Degree (First Cycle) |
| Mode of Delivery: | Face to face |
| Course Coordinator : | Assist. Prof. AYSE ERTUĞRUL BAYKAN |
| Course Lecturer(s): |
Assoc. Prof. DEREN ÜNALMIŞ Assist. Prof. AYSE ERTUĞRUL BAYKAN |
| Recommended Optional Program Components: | None. |
| Course Objectives: | The objective of this course is to familiarize the students with the understanding and the intuition of the monetary policy and institutions, the banking system, central banking and tools of monetary policy. |
Learning Outcomes
|
The students who have succeeded in this course; 1. Interpret changes in global and national economy 2. Acquire a solid understanding of the essentials of financial instruments 3. Understand the role that central banks play in macroeconomic policy making 4. Learn the impact of the exchange rate movements on macroeconomic dynamics 5. Interpret the effects of a change in policy interest rate of central banks 6. Know the short-run and long-run objectives of central banks 7. Accumulate detailed knowledge about banking systems 8. Comprehend the interaction between monetary policy making and financial markets 9. Discern the relation of international financial institutions with national regulatory agencies |
Course Content
| The teaching methods of the course are Lecture, Technology-Enhanced Learning, Educational Game, Discussion, and Problem Solving. By taking into consideration the necessities for an integrated global perspective and financial dimension of monetary policy actions, the course is designed in two parts. In the former, the basic concepts of finance such as the time value of money, interest rate setting in bond markets, risk and the presentation of financial sphere are provided. In the latter, the linkage of the financial concepts to the monetary policy making is explained. In particular, the central bank balance sheet, the monetary toolbox of central banks, the corridor system, Taylor rule, unconventional monetary policies and their effect on financial investors’ decisions are detailed. |
Weekly Detailed Course Contents
| Week | Subject | Related Preparation |
| 1) | Introduction | Course overview and requirements Introduction • Why do we study money, banking and financial markets? |
| 2) | Financial Sphere Structure | Components of financial sphere (CH 03) • Instruments • Markets • Institutions |
| 3) | The Concept of Money | Money and Payment Systems (CH 02) • Main functions of Money • Payment System • Key monetary aggregates |
| 4) | Understanding Interest Rates and Markets | Types of interest rates (CH 04) • Valuing money now and in future • Nominal and real interest rates |
| 5) | Bond Market and Determination of Interest Rates | Bond Market (CH 06) • Concepts and definitions • Bond prices and yields • Bond markets: Demand and supply dynamics & equilibrium |
| 6) | Interest Rate and Risk | Concept of risk (CH05) • Interest Rate and Risk (CH 07) • Theories of rational expectations and liquidity premium • Risk structure of interest rate |
| 7) | Foreign Exchange | Foreign Exchange (CH 10) • Nominal and real exchange rates and FX markets • Exchange rates in long-run |
| 8) | Midterm Exam | |
| 9) | Foreign Exchange | Foreign Exchange (CH 10) • Exchange rates in short-run • Interest parity condition |
| 10) | Banking and Bank Management | Banking sector & Bank Management (CH 12) • Managing credit and interest rate risks • General principles of bank management • Understanding bank balance sheet |
| 11) | Modern Central Banking Central Bank Balance Sheet Structure | Modern Central Banking Today (CH 15) • Primary Objectives of all central banks • A successful central bank today Central Bank Balance Sheet Structure (CH17) • Balance Sheet Items • Monetary Base |
| 12) | Central Bank Balance Sheet Structure | Central Bank Balance Sheet Structure (CH17) • Changing size and composition of balance sheet • Deposit expansion multiplier • Monetary base and money supply |
| 13) | Monetary Policy Making: Stabilizing the Economy | Monetary Policy: Stabilizing the Economy (CH 18) • Federal Reserve’s conventional toolbox • Inflation targeting • Monetary policy making in emerging market economies |
| 14) | Monetary Policy Making: Stabilizing the Economy | Monetary Policy: Stabilizing the Economy (CH 18) • A guide to central bank interest rate: Taylor Rule • Unconventional Policy Tools |
Sources
| Course Notes / Textbooks: | Money, Banking and Financial Markets by Cecchetti, S.G., and Kermit Schoenholtz, McGraw Hill, 6th edition, 2021. E-book can be reached through McGraw Hill learning platform CONNECT |
| References: | 1. The Economist Guide to Financial Markets, The Economist and Marc Levinson, 6th edition 2. Devil Take the Hindmost: A History of Financial Speculation by Edward Chancellor, Plume, 2000. 3. The Ascent of Money: A Financial History of the World by Niall Ferguson, Penguin Books, 2008. 4. Parasal İktisat, Kuram ve Politika, Fatih Özatay, Efil Yayınları, 2019, 6th edition. |
Evaluation System
| Semester Requirements | Number of Activities | Level of Contribution |
| Homework Assignments | 5 | % 25 |
| Midterms | 1 | % 30 |
| Final | 1 | % 45 |
| Total | % 100 | |
| PERCENTAGE OF SEMESTER WORK | % 55 | |
| PERCENTAGE OF FINAL WORK | % 45 | |
| Total | % 100 | |
ECTS / Workload Table
| Activities | Number of Activities | Duration (Hours) | Workload |
| Course Hours | 13 | 3 | 39 |
| Study Hours Out of Class | 14 | 7 | 98 |
| Homework Assignments | 5 | 2 | 10 |
| Midterms | 1 | 1 | 1 |
| Final | 1 | 2 | 2 |
| Total Workload | 150 | ||
Contribution of Learning Outcomes to Programme Outcomes
| No Effect | 1 Lowest | 2 Low | 3 Average | 4 High | 5 Highest |
| Program Outcomes | Level of Contribution | |
| 1) | As a world citizen, she is aware of global economic, political, social and ecological developments and trends. | 5 |
| 2) | He/she is equipped to closely follow the technological progress required by global and local dynamics and to continue learning. | 5 |
| 3) | Absorbs basic economic principles and analysis methods and uses them to evaluate daily events. | 5 |
| 4) | Uses quantitative and statistical tools to identify economic problems, analyze them, and share their findings with relevant stakeholders. | 4 |
| 5) | Understands the decision-making stages of economic units under existing constraints and incentives, examines the interactions and possible future effects of these decisions. | 5 |
| 6) | Comprehends new ways of doing business using digital technologies. and new market structures. | 2 |
| 7) | Takes critical approach to economic and social problems and develops analytical solutions. | 1 |
| 8) | Has the necessary mathematical equipment to produce analytical solutions and use quantitative research methods. | 4 |
| 9) | In the works he/she contributes, observes individual and social welfare together and with an ethical perspective. | 4 |
| 10) | Deals with economic problems with an interdisciplinary approach and seeks solutions by making use of different disciplines. | 1 |
| 11) | Generates original and innovative ideas in the works she/he contributes as part of a team. | 3 |