MONETARY POLICY AND FINANCIAL MARKET (I MOD.)
Within basic theoretical frameworks, the course analyzes the role of money, central banking and the transmission of monetary policy in developed countries, with special emphasis on the European Union and the ECB.
Expected learning outcomes
Knowledge and understanding: The student should be able to understand the role of financial intermediaries and the management and transmission of monetary policy in modern industrialized economies with particular attention to the Economic and Monetary Union (EMU). In addition, he/she should also know the main quantitative models of international economic policy.
Applying knowledge and understanding: the student should be able to apply the acquired knowledge to the evolution of modern monetary systems and monetary policies implemented in the EU and the USA.
Making judgments: the student should be able to use autonomously the acquired knowledge solving specific issues such as the evaluation of policies implemented by the major central banks.
Communication: the student is expected to give clear and in-depth answers to the questions of the written exam and, eventually, to the ones of the oral exam.
Lifelong learning skills: the student should be able to show a good learning ability, by widening, for example, his/her knowledge with use of relevant bibliographic references. The student will have the opportunity to apply the knowledge gained in previous courses integrating them with the additional professional skills that characterize the course.
Prerequisites: General knowledge and reasoning ability. Some basic knowledge of macroeconomics, if previously acquired by the student, can facilitate the learning process.
General knowledge and reasoning ability. Some basic knowledge of macroeconomics, if previously acquired by the student, can facilitate the learning process.
Money as means of payment: The Quantity Theory. Money as store of value: Liquidity Preference Theory. Money demand and monetary policy in the IS-LM model. Money demand in the theory of portfolio allocation.
Final targets of monetary policy. Features and governance of the ECB and the Federal Reserve. Intermediate targets and the two-pillar strategy. Operating procedures and monetary policy tools at the ECB and the FED. Monetary policy making under uncertainty. Monetary policy in the recent financial crisis and the great recession. The market for monetary base and money supply. Endogenous money supply in the IS-LM model
The course includes frontal lessons during which the themes of the program are discussed.
G. Di Giorgio. Economia e Politica Monetaria, CEDAM, u.e.
A. Cottrell, R. Lucchetti. Guida ai comandi di gretl, u.e.
The assessment is based on a written examination composed of thematic questions aimed at evaluating the actual achievement of the objectives on part the students. In order to evaluate the depth in understanding general theoretical knowledge, the class work includes open questions on the program’s topics. In their answers the students should be able to show and illustrate the fundamental concepts acquired during their studies. An oral examination can also be held, in case the teacher judges it useful to better ascertain the student’s knowledge. The vote of the oral examination is expressed in scale from 0 to 30, and it is averaged with the vote of written examination (equal weighting) in order to determine the final vote.