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Econ 353: Money, Banking, and Financial Markets
Tian Yu479 Heady Hall
Lecture 1: Introductiontext book chapter 1
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Syllabus
Required textbook Course webpage Homework and exams In-class discussions Grading
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Main topics
Money and Monetary Policy money, the Fed, money supply, monetary
policy Banking and other Financial Institutions
banks: management, evolution and regulation Financial Markets
bond market and interest rate, stock market
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Motivation
1. Understand the economy
2. Guard the wallet
3. Find a good job
4. Get a decent grade
5. Have an interesting conversation
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Why study money?
‘Green paper with dead presidents’ head.’
Growth of money supply is related to:• Business cycle• Price level• Interest rate
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Money and business cycle
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Money and price
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Money and interest rate
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Why study banking?
‘Banks only lend money to those who already have a lot of money.’
• An important financial intermediary• Get funds from savers to investors• Indirect finance alleviate the problem of
asymmetric information
• Banks and money supply
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Why study financial markets?
Channel funds from savers to investors, promoting economic efficiency
Affect personal wealth Affect firms’ profit and investment ->
employment
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Stock market
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Bond market
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Recap
How is money related to business cycle, price level and interest rate? ( look at graphs)
Why are banks so important? How do financial markets promote
economic efficiency?
