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Econ-614 Topics in Monetary Economics
Campus NBS
Programs PG
Session Fall Semester 2016
Course Title Topics in Monetary Economics
Course Code Econ-614
Credit Hours 3.0
Course Objectives This course will survey recent theoretical work in monetary economics after a brief introduction to some stylized facts associated with money and the business cycle.
Detail Content
  • Basic Concepts
    • Why study Monetary Economics
    • What is Money
    • Functions of Money
    • Definition of Money
  • The Demand for Money
    • Quantity Theory of Money
    • Cambridge Approach to Quantity Theory
    • Keynes’s Liquidity Preference Theory
    • Baumol-Tobin Inventory – Theoretic Model
    • Tobin’s Portfolio Model
    • Friedman’s Modern Quantity Theory of Money
    • Empirical Evidence on the Demand for Money
    Readings: Mishkin, Ch. 19 Bain and Howells, Ch. 3 Stephen Goldfeld; The Demand for Money Revisited”, 1973 Stephen Goldfeld; “The case of Missing Money”, 1976
  • The Supply of Money
    • Multiple Deposit Creation
    • Money Supply Model and Money Multiplier
    • Determinants of Money Multiplier
    • Determination of Money Supply
    Readings: Mishkin, Ch. 13+14
  • Money and Inflation
    • Monetarist vs Structuralist views on Inflation
    • Inflation –Unemployment Trade –
    Milton Friedman: AER, March 1968 Robert J. Gordon: “Recent Developments in the Theory of Inflation and Unemployment”, AER, 1971
  • Design and Conduct of Monetary Policy
    • The Role of Central Bank
    • Tools of Monetary Policy
    • Objectives of Monetary Policy
      • Price Stability
      • Promoting Economic Growth
      • High Employment
      • Monetary Targeting
      • Inflation Targeting
      • Choosing the Policy Instrument
    Readings: Mishkin, Ch 15& 16 Mohsin S. Khan, “The Design and Conduct of Monetary Policy”, March 2010 Bain & Howells: Ch. 8
  • Monetary Policy in an Open Economy
    • Monetary Policy in Fixed Exchange Rate Regime
    • Monetary Policy in Floating Exchange Rate Regime
    Bain & Howells: Ch. 7
  • Relationship between Monetary and Fiscal Policy
    • Government Budget Constraint
    • Fiscal and Monetary Policy and the Effects of Budget Deficit
    • Coordination of Fiscal and Monetary Policy
    Reading: Craig Burnside edited: Fiscal Sustainability in Theory and Practice; Ch. 2
  • Monetary Policy in Pakistan   Various Monetary Policy Statements of SBP
Text/Ref Books
  • Frederic S. Mishkin, The Economics of Money, Banking , and Financial Markets – Eight Edition, Addison – Wesley Series in Economics; 2007
  • Keith Bain and Peter Howells; Monetary Economics. Policy and its Theoretical Basis, 2nd Edition, Palgrave Macmillan, 2009
  • Stephen Goldfeld; The Demand for Money Revisited”, Brookings Papers on Economic Activity, 3: 1973.
  • Stephen Goldfeld; “The Case of Missing Money”, Brookings Papers on Economic Activity; 3: 1976.
  • Milton Friedman; “The Role of Monetary Policy”, American Economic Review, March 1968.
  • Robert J. Gordon; “Recent Developments in the Theory of Inflation and Unemployment;” Journal of Monetary Economics April 1976.
  • James Tobin; “Inflation and Unemployment”, American Economic Review, May 1972.
  • Mohsin S. Khan, “Design and Conduct of Monetary Policy: Lessons for Developing Countries” Quaid-i-Azam lecture delivered at the 25th Annual General Meeting of the Pakistan Society of Development Economics, Islamabad March 2010.
Time Schedule Fall Semester, 2011
Faculty/Resource Person Dr. Ashfaque Hasan Khan
Ph.D (Economics), The Johns Hopkins University, USA
Discipline: Economics
Specialization: Macroeconomics, Money, Econometrics