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Economics Department



 
ECN 135:  Money and Banking
Professor Kevin D. Salyer 
Fall Quarter, 2009 
Office Hours: Monday and Wednesday, 11-noon.
 TA: Paul Gaggl. (Office Hours TBA)

Course Outline and Readings
Chapters are from Financial Institutions and Markets by Eakins and Mishkin
Part I: Bonds and Financial Intermediaries
Week 1: Intro, Bonds and Interest Rates: Chapters 1,2 and 3
          Intro Slides
          Bond Pricing Slides
Week 2: Yield Curve, Efficient Markets, Banks and the Banking Industry: Chapters 5, 6, 17, and 18.
          Interest Rates: Inflation, Default, Liquidity and Term Structure slides (Chap. 5)
          Banks Financial Statements slides (Chap. 17)
Week 3: Assessing Exposure to Interest Rate Risk: Chapters 24
          GAP analysis slides

MIDTERM I: Friday October 16
Week 4:  Hedging Interest Rate Risk with Futures and Swaps: Chapter 25 (we will not cover options.)
            Interest Rate Futures Slides
            Interest Rate Swaps Slides
Week 5:  The Money and Mortgage Markets:  Chapters 9 and 12
             Money Market Slides
             Mortgage Market Slides
             Securitization Slides
              
            The Federal Reserve: Chapters 7 and 8
               Monetary Policy Tools Slides
Part II:  Models of Banks         

Week 6: Risk Aversion, Diversification, Insurance:
Week 7:  Banks as providers of liquidity insurance: Freixas & Rochet, Chapter 2

MIDTERM II: Monday November 16
REVIEW SLIDES

Week 8:  Lending Under Asymmetric Information: Gertler & Hubbard.

Part III:  Monetary Policy
Week 9:  Banking Regulation and Financial Crises: Chapters 15 and 20.
Week 10:  The Panic of 2008: Brunnermeier,  Cecchetti
Homework

Homework #1 - Due October 9th (in class) - Answer Key

Homework #2 - Due October 28 (in class) - Answer Key

Homework #3 - Due November 11 (in class)  - Answer Key


Old Exams

Final S08  Final S08 Answer Key

Midterm S09   Midterm S09 Answer Key

Final S09        Final S09 Answer Key

Midterm 1 F09  Midterm 1 F09 Answer Key

Midterm 2 F09     Midterm 2 F09 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: