Study-unit MONETERY AND FINANCIAL ECONOMICS
| Course name | Business administration |
|---|---|
| Study-unit Code | 20022906 |
| Location | PERUGIA |
| Curriculum | Economia dei mercati e degli intermediari finanziari |
| Lecturer | Maria Chiara D'errico |
| Lecturers |
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| Hours |
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| CFU | 6 |
| Course Regulation | Coorte 2021 |
| Supplied | 2023/24 |
| Supplied other course regulation | |
| Learning activities | Caratterizzante |
| Area | Economico |
| Sector | SECS-P/01 |
| Type of study-unit | Obbligatorio (Required) |
| Type of learning activities | Attività formativa monodisciplinare |
| Language of instruction | Italian |
| Contents | The course aims to provide the student with theoretical and empirical tools for studying the functioning of the money and credit market. The institutional context of reference applies to the European Monetary Union and to the European Central Bank, without letting comparisons with other countries. An initial part of the lessons will be dedicated to the definition of currency and monetary aggregates followed by the economic analysis of European and international monetary institutions. A study of the economic characteristics of money and credit will follow, together with the analysis of the instruments and objectives of monetary and credit policies. |
| Reference texts | Attending students may refer to: • G. B. Pittaluga (2012). Economia Monetaria, Hoepli Editore, Milano. Additional learning material and references will be provided during lessons |
| Educational objectives | The main objective of teaching is to convey knowledge in the following areas: • Advantages and disadvantages of an economic system that is based on the single currency issued by one authority; • Determinants of money demand and liquidity preference as an alternative to financial investments and / or real assets; • Coin Offering, Money Market Operation and Main Monetary Interest Rates, controlled directly or indirectly by central banks; • The role of central banks and commercial banks in monetary policy and its transmission mechanisms • Critical and heterodox readings on the functioning of monetary and financial markets. The main skills, i.e. the ability to apply the acquired knowledge, should be: • Know how to frame particular economic and financial phenomena studied in other areas in a more general context of monetary and financial markets • Learn how to read and interpret the main economic and financial reports issued by national and international monetary authorities • Provide opinions on the performance of the monetary and financial markets, interest rates and asset prices |
| Prerequisites | Attending both micro- and macro-economics courses before to apply for monetary and financial economics is strongly recommended. At the beginning of the monetary and financial economics course, students are supposed to have the command on some principles and basic concepts, such as consumer and firm theory, general equilibrium theory, market failures, Keynesian multiplier, IS-LM model, AS-AD model and Phillips curve. |
| Teaching methods | Lectures |
| Learning verification modality | Students will be required to take a written exam accounting for 3 open- ended questions. Each question will demand to discuss a specific model of monetary economics, by using both analytical and graphical methods. This examination has the objective to test the acquisition of a basic knowledge and understanding of the essential concepts of modern monetary economics. The exam will last 1 hour and 30 minutes. |
| Extended program | Role and origin of currency • The functions of currency; • The role of currency • Origin of the currency and role of the state; • Competitive and monopolistic production of money; • The historical evolution of payment systems. The financial markets • The functions and types of financial markets; • The classification of financial assets; • Optimal financial contract and firms' financial structure; • Financial innovations and derivative products; • Financial globalization and integration of the eurozone markets. Financial intermediaries • The functions of financial intermediaries; • The "special" role of banks; • The monetary function of banks; • Non-bank intermediaries; • Financial crises; • Financial regulation; • Financial structure and economic growth; • Lines of development of financial systems Money Demand • The demand for money in the neoclassicals; • The demand for money in Keynes; • The portfolio approach; • Friedman's demand for money; • Models of monetary stocks for settlement purposes; • The application for a precautionary currency. Money supply • The monetary multiplier; • A money market model; • The operating procedures of the ECB; • The bank interest rates; • Credit rationing; • Long-term interest rates; • The Fisher effect; • The temporal structure of interest rates. The transmission of monetary policy • The neoclassical approach; • The neoclassical interpretation of Keynes; • Cases of monetary policy effectiveness; • The monetarist counter-revolution; • The credit view; • The transmission of monetary impulses in the information economics; • The Neokeynesian monetary model; • The transmission of monetary policy in the Eurozone. Money, prices and output • Money and the economic cycle; • The Great Depression; • The causes of the issue; • The Great Inflation of the 1970s; • The hyper releasing; • The traditional Phillips curve; • The Phillips curve increased by expectations; • Rational expectations and vertical Phillips curve; • The Phillips curve in the neo-Keynesian monetary model. The ultimate goals of monetary policy: • The ultimate goals of central banks; • The costs of the release and the seigniorage; • The ultimate goal of the European Central Bank; • The optimal inflation rate; • The deflation The of monetary policy between rules and discretion • Monetary policy instruments and indicators; • Discretional policy and temporal inconsistency; • Institutional solutions to the problem of temporal inconsistency; • Simple monetary policy rules; • The two pillars of the ECB's monetary policy strategy. The role of central banks • Origin and functions of central banks; • Central Banks and Loan of Last Resort; • Central banks and banking supervision; • The independence of central banks; • The European System of Central Banks and the ECB Monetary policy in an open economy, the determination of exchange rates • The use of money in international trade; • The equilibrium exchange rate; • The choice between fixed exchange rates and flexible exchange rates; • Interventions on the exchange rate; • The European Monetary System; • The currency crises; • The theory of optimal monetary areas; • The European Monetary Union and the Euro. Transmission and conduct of monetary policy • An open economy money market model; • The transmission of monetary policy in an open economy; • The Mundell and Fleming model; • The Neokeynesian monetary model in open economics; • Simple rules of monetary policy in an open economy. |
| Obiettivi Agenda 2030 per lo sviluppo sostenibile | 4 Quality education 8 Decent work and economic growth 16 Peace, justice and strong institutions |