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Economics Department



 
ECN 135:  Money and Banking
Professor Kevin D. Salyer 
Spring Quarter, 2008 
Office Hours: Tuesday and Thursday, 1-2:30. 

Midterm Grading Scale

 49 - 60 A
 40 - 48 B
 25 - 39 C
 15 - 24 D
  0 - 14 F

Course Review Slides (large file) (small file)

Course Outline and Readings
I.  Weeks 1 and 2 - Overview, Bond Pricing and Duration
Kolb & Rodriguez, Chapters 4, 7, 13. Handouts on Bond Pricing and Duration

Slides: Introduction, Bank Overview, Financial market overview, bond pricing
II.  Weeks 3 and 4 - Term Structure, Hedging Interest Rate Risk
Kolb & Rodriguez, Chapters 6 & 14. Hamilton blog on term structure.

Belongia & Santoni

Slides: Yield Curve,  Financial Statements, Gap Analysis, Financial Futures
           Interest Rates Swaps, Securitization, Subprime Primer,
            New Monetary Policy  

III.  Week 5 - Housing Finance, the Subprime mess, MIDTERM
Sellon & VanHahmen, WSJ article on subprime meltdown, Chapter 2 2008 Economic Report of the President, Edmiston & Zalneraitis.
IV.  Weeks 6 - 8 - Models of Banking: Liquidity Insurance and Asymmetric Information
Freixas & Rochet, Chapter 2, Gertler & Hubbard. 

Article on Risk Aversion and Diversification,  Optimal Insurance (5/8 lecture)
V.  Weeks 9 - 10
Gali & Gertler
 
AD slides: large file, small file (handouts for printing)
Taylor rule slides:  large file, small file (handouts for printing)
Article from The Economist: John Taylor on the housing bubble
AS slides: large file, small file (handouts for printing)
  Midterm     Midterm Answer Key
 
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Homework
Homework #1 - Due April 15th -- Answer Key
Homework #2 - Due April 22nd -- Answer Key
Homework #3 - Due April 29th  --  Answer Key
Homework #4 - Due May 22nd --  Answer Key
Homework #5 - Due June 5th -- Answer Key

 
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Supplemental Reading: History of the Federal Reserve  (Not Required)

A. Muelendyke U.S. Monetary Policy, Chap. 1

A. Muelendyke U.S. Monetary Policy, Chap. 2
         (Fed history notes)

Federal Reserve System: Purposes and Functions

  (background article on inflation targeting by Mishkin, et.al)

Economic News:

Resources for Economists

Economic Data: