This course is designed to help students understand the connections between money
(the Central Bank/Mainly, the U. S. Federal Reserves), financial markets, and the
macroeconomy. How are short- and long-term interest rates determined? What
economic factors drive the yield curves in different bond markets? How is money
supply determined, and, to control interest rate or money supply, how does the
Central Bank conduct monetary policy in stabilize the economic fluctuation, such
as output and inflation?
We will pay particular attention to the banking system, with an eye toward
understanding the function and importance of banks. Topics will include the role
of the Central Bank as a lender of last resort during the recent, and prior, financial
crises, unconventional monetary policy tools such as quantitative easing and
forward guidance. The course is appropriate for anyone trying to gain a
macroeconomic perspective on capital markets, from investors to bankers, or those
simply interested in the linkages between interest rates, banks and the economy.