Monetary Theory and Policy

Monetary Theory and Policy
Macroeconomic aspects of money demand, money supply, the monetary transmission mechanism, central bank policy, and other current issues.
 Hours3.0 Credit, 3.0 Lecture, 0.0 Lab
 PrerequisitesECON 380 & ECON 381
 RecommendedConcurrent enrollment in Econ 388.
 TaughtContact Department
 ProgramsContaining ECON 453
Course Outcomes

Econ 453 students will be able to

  1. Summarize the broad empirical evidence regarding the long-run and short-run relationships between money and inflation and money and output.
  2. Demonstrate a fundamental knowledge of the institutional and regulatory structure of the U.S. financial system.
  3. Explain the macroeconomic role of central banks with special emphasis on the role of the Federal Reserve System in the U.S. economy.
  4. Demonstrate an active understanding of the following elements of modern monetary theory:

The role of expectations, especially rational expectations

Solve simple rational expectations models

Analyze the rudimentary new Keynesian dynamic stochastic general equilibrium models

Theories of the transmission mechanism of monetary policy

  1. Identify the current issues in the conduct of monetary policy.
  2. Demonstrate a general understanding of the causes and consequences of financial crises with a focus on the financial crisis of 2007-2009.
  3. Identify and evaluate the principal issues regarding financial regulation.