Monetary economics is the branch of economics that studies the different competing theories of money: it provides a framework for analyzing money and considers its functions (such as medium of exchange, store of value and unit of account), and it considers how money, for example fiat currency, can gain acceptance purely because of its convenience as a public good. The discipline has historically prefigured, and remains integrally linked to, macroeconomics. This branch also examines the effects of monetary systems, including regulation of money and associated financial institutions and international aspects. Monetary Economics aim is to gain insight into more recent approaches to monetary policy, and to developments in understanding and applying such policy. The main objectives of the course will be to understand the role of money in the economy as well as to understand some models where inflation shows persistence, the theory of monetary policy, monetary policy operating procedures and the central banking mechanisms.Monetary Economics course provides students with the theoretical building blocks that are needed for an understanding of the monetary theory and surveys the issues in the present-day monetary policy implementation faced by the central banks. The course equips students with the necessary background to analyze problems involving the determination of interest and exchange rates in the economy as well as with the understanding of what central banks can do to improve the economic performance through the use of the monetary policy instruments.
On successful completion of this course, students will be able to:
1. Bennett T. McCallum, (1989), Monetary Economics, Theory and Policy, McMillan.
2. Fredric S. Mishkin, (1995), Financial Markets and Money, Harper & Row Publishers.
3. Laider, David E.W (1996), The Demand for Money: Theories, Evidence and Problems (Fourth edition), Harper & Row, Publishers, New York.
4. Miller, R. L. and David VanHose, (2001), Money, Banking & Financial Markets. South Western, Singapore.
5.Mishkin, Frederic S., (2001), The Economics of Money, Banking and Financial Markets. (Sixth edition). Addison Wesley, New York.
6.Vanish K., Monetary Theory, (2000), Vikas Publishing House, Delhi.
7.Patinkin Don, Money, Interest and Prices, Harper and Row Publishers, (Latest Edition).
Mid Term: 30 marks
Sessional: 20 marks
Final Exam: 50 marks