Office hours: Wednesday, 09.00-11.00 or by appointment (Room 1A).

E-mail: mirela.gavoci@unyt.edu.al

Phone number: +355 445 12345

Required Textbooks:

 

Mishkin, Frederic S.(2004). The Economics of Money, Banking and Financial Markets (7 ed)., Pearson –The Addison-Wesley.

ISBN-0-321-12235-6.

Students are expected to supplement their textbook readings with additional readings that shall be assigned on a case-by-case basis and Web-based research will be provided during the class.

 

Course Purpose:

This course is designed to provide you with a thorough understanding of the importance of money, banking, and financial markets of a developed economy. Our objective in Money and Banking is to study the role of the financial sector and monetary policy on the economy.

Course Description:

This course explains how the money, financial institutions, and financial markets have emerged as instruments of payments for the services of factors of production, such as labor and capital. The use of money facilitates business in a market by acting as a common medium of exchange. Of course, as that market expands and develops on a national and international level, the importance of money, banking, and other financial markets expands to accommodate innumerable exchanges.

This course will allow you to examine not only the origins and nature of money, but also the institutions and markets that have evolved to enable the exchange of goods and services worldwide. It will provide you with the opportunity to examine the instruments and strategies assisting production, distribution, and consumption. Also, this course will help you develop an appreciation for important concepts in economics, from interest rates and central banking to stocks and bonds.

 

Course Objectives:

Upon successful completion of this course, the student will be able to:

  • Identify the implications, risks, and opportunities of global markets.
  • Acquire and demonstrate analytical and problem solving skills within money, banking, and financial market disciplines.
  • Assess how monetary activities affect an economy.
  • Describe the structure of financial markets, the factors that shape them, and how they are regulated.
  • Explain the nature and functions of money.
  • Explain the concept “time value of money”.
  • Explain the role of financial markets in the economy.
  • Assess the responses of the economy to both monetary and fiscal policy.
  • Explain the basic purposes of the monetary and financial systems.
  • Identify the markets for stocks, bonds, derivatives, and currencies.
  • Explain the roles of banks and other financial intermediaries.
  • Analyze how the Fed affects the economy.

 

Course Outline:

Session Date Content
I 15/10

Introduction to Financial Markets and Money

·         Course introduction, subjects and requirements

·         Background information on the structure and operation of financial markets.

Readings: Chapter 1, 2

II 22/10

Money and the Concept of the interest rate

 

·         Money: how the economist’s definition differs from that of common speech, the functions of money and its historical view.

·         The relevance and the understanding of the interest rate.

Readings: Chapter 3, 4

III 29/10

The Behaviour of Interest Rates

 

·         Theory of portfolio choice. People’s decisions to hold assets and the different equilibrium approaches to the determination of interest rates.

Readings: Chapter 5

IV 05/11

Risk and Term Structure

·         Application of the tools learned in the previous section.

Readings: Chapter 6

V 12/11

The Stock Market; Expectations

MIDTERM I

·      How stocks are priced and how information is incorporated into stock prices. The theory of rational expectations and its application to financial markets.

Readings: Chapter 7

VI 19/11

Economic Analysis of Financial Structure

·         Why financial system is structured the way it is and economic emphasizes of adverse selection and moral hazard.

Readings: Chapter 8

 

VII 26/11

Banking & Management of Financial Institutions

·         What banks (depository institutions) do and what their balance sheets look like. How banks manage their assets and liabilities to make a profit.

Readings: Chapter 9

VIII 03/12

Banking Industry and Financial Regulations

·         The process of financial innovation in which financial institutions respond to changes in the financial environment.

·         Why the regulatory system takes the form it does and how it led to a banking crisis.

Readings: Chapter 10, 11

IX 10/12

Central Banks and the Federal Reserve System

·         Central bank operation; the central bank in the United States—the Federal Reserve System.

Readings: Chapter 14

X 17/12

Money Supply Process

MIDTERM II

·         Determinants of money supply. The players in the money supply: central bank, banks and depositors.

Readings: Chapter 15, 16

XI 07/01

Tools of Monetary Policy

·         Tools at the Fed’s (and the European Central Bank’s) disposal for conducting monetary policy.

Readings: Chapter 17

XII 14/01

Conduct of Monetary Policy

·         Goals, strategies and tactics of central bank policymaking.

Readings: Chapter 18

XIII 21/01

The Foreign Exchange Market

·         The foreign exchange market – application of asset-market approach to exchange rate determination.

Readings: Chapter 19

XIV 28/01

International Financial System

·         The implications of international financial transactions for the conduct of monetary policy.

Readings: Chapter 20

XV XX/02 FINAL EXAM.

Note: The instructor reserves the right to make changes in the syllabus that do not affect the total amount of work required by students.

 

Basis for Student Evaluation:

 

Quizzes (5%): Short tests (multiple-choice, true/false) will be administered with reference to the reading homework and the material covered.

Homework + participation (15%): Homework will be considered as an important part of the students’ preparation. There will be problems assigned for each chapter we cover. Participation also requires that the student in class will be actively engaged into class discussion and other activities.

Case study (10%): There will be an exercise case study during the course.

Mid-Term Exam (36%): two midterm exams worth of 18% each will be applied during the course. Multiple-choice, essay questions and problems will be used to better evaluate the efforts of the student in mastering Money and Banking.

Final Exam (34%): There will be a cumulative final exam worth 34% of the final grade.

*There will be problems assigned for each lesson. This work will be entirely for the students to practice and exercise on topics and issues in money and banking.

 

Grading Scale: Grading scale follows the official UNYT as below:

Letter

Grade

 

Percent of Total Grade

 

Generally Accepted Meaning

A 96-100 Outstanding work
A- 90-95
B+ 87-89 Good work,

distinctly above average

B 83-86
B- 80-82
      C+ 77-79  

Acceptable work

C 73-76
C- 70-72
 D+ 67-69 Work that is significantly below average
D 63-66
D- 60-62
F 0-59 Work that does not meet minimum

standards for passing the course

 

General Policies:

  1. Regular attendance is expected. If there is an urgent reason to be absent, please email the instructor in advance. A student may not enter an examination without having justified all of his/her absences.
  2. Any violation of academic honesty principles, e.g. plagiarism, will result in an automatic F on the course, in line with UNYT’s Honour Code policies.
  3. Make-up exams will be given only in the case of a confirmed medical excuse. If possible, please advise the instructor in advance by email.

 

Outside Support:

For support related to study skills and time management, the Academic Support Center offers students tutoring and coaching (please feel free to contact Dr. A Canollari, albanacanollari@unyt.edu.al). The Writing Center is another service created with the aim to give students feedback and help with papers and other writing assignments. If you feel that you have any exceptional learning difficulties you can stop by the UNYT Counseling Center. For information related to the Counseling Center or any of these centers, please contact Dr. Enila Cenko, your academic advisor or me. Dr. Enila Cenko can be reached at  enilacenko@unyt.edu.al.

 

 

 

Faculty: Business &Economics.

Department: Economics.

Grade: Undergraduate.

Majors: Business.

Study Fileds: Accounting, Economics, and Finance.

Course Year: 2.

Course Program: UNYT.

Scheduele: Thursday, 17-20:00

Instructor: Mirela Gavoçi

Credits:

Prerequisite:  Introduction to Macroeconomics