Course Description

The theory and practice of monetary policy, including discussions of rationales for government involvement in money and banking, actual central bank behavior, the choice of monetary rules versus discretion, and how alternative monetary regimes might work.

Additional Requirements for Graduate Students:
A course project or additional exam will be required of graduate students.

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Athena Title

MONETARY POLICY

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Undergraduate Pre or Corequisite

ECON 4010 and (ECON 4030 or ECON 4030H or ECON 4100/6100)

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Semester Course Offered

Offered every year.

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Grading System

A - F (Traditional)

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Course Objectives

The course covers the theory of monetary institutions and monetary policy "regimes." The class explores how monetary institutions have evolved, the rationales for government involvement in money and banking, how monetary authorities in a discretionary fiat regime might behave, and how some alternative regimes might work.

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Topical Outline

The Evolution of Market Monetary Institutions Commodity Money Money Issue by Unrestricted Banks The Emergence of Central Banking Fiat Money, the Price Level, and Inflation Rationales for Government Involvement in Money Rationales for Government Involvement in Banking Central Bank Behavior The Seignorage Motive Bureaucracy Political Business Cycles The Problem of Time-Inconsistency Alternative Monetary Regimes

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