ECON 1290 - MONETARY POLICIES AND FINANCIAL MARKETS

Minimum Credits: 3
Maximum Credits: 3
The main goal of this course is to understand credit markets and monetary policy. Why are credit markets organized in a particular way? What forces shape financial contracts and the behavior of asset markets? Why do we need financial regulation? What is the role of central banks? How do they conduct monetary policy? How does monetary policy affect financial markets and the real economy? We will study how monetary policy influences interest rates and asset markets, such as the bond market and the stock market. We will analyze the effect of asymmetric information in corporate finance, and on the design of financial contracts. We will study the role of financial intermediaries, such as banks, in the economic system and study the economic rationale behind domestic and international banking regulation. Finally, we will discuss monetary policy. We will review evidence and theory on how monetary policy affects real economic activity and financial markets. We will study the instruments and goals of monetary policy, focusing in particular on credibility and expectations management for central banks, the connection with fiscal policy and international cooperation in monetary policy.
Academic Career: Undergraduate
Course Component: Lecture
Grade Component: LG/SNC Elective Basis
Course Requirements: PREQ: ECON 1110; MIN GRADE: C

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