Required for this course:

Access to a Connect web site for the e-version of the textbook: 

Cecchetti, Stephen and Kermit Schoenholtz. Money, Banking, and Financial Markets, 4/e. NewYork, New York. 2011.  A hyperlink to the Connect web site for the course is available under bookmarks once the course begins. Instructions for how to access the course are available under handouts.

A digital copy of the book comes with access to the Connect web site.  If you buy a print book you will still be required to pay for access to Connect unless you buy a book that is pre-bundled with Connect (stand alone access to Connect ISBN: 978-0-07-764108-5,  Hardcover textbook bundled with the Connect Access is ISBN: 978-1-259-28529-5).

Examination of the role of money, financial markets, and financial intermediation in the American economy, with a particular focus on commercial banks.  Includes an in-depth look at the money supply process and the Federal Reserve System.  Prerequisites: EC201 and EC202.

The focus of this course is the American banking system and the different functions that it performs in the economy. We will look especially carefully at two of these functions: financial intermediation and money creation. Financial intermediation involves the shifting of control over a society’s resources from people who currently have more income than they want to spend (savers or lenders) to people who want to spend more than they currently have (borrowers). Although banks are only one component of this process, the role that they play in it is a crucial one. The banking system also plays a key part in the process of money creation. We will develop a detailed model of the money supply process and consider how complications in the process affect the ability of the Fed to control the money supply. We will also take a careful look at the Fed’s tools of monetary policy.