The document outlines a course on monetary economics. The course covers topics like supply and demand for money, theories of inflation, and monetary policy over 5 units. It aims to help students understand the relationship between money and the real economy and evaluate the role of monetary authorities.
The document outlines a course on monetary economics. The course covers topics like supply and demand for money, theories of inflation, and monetary policy over 5 units. It aims to help students understand the relationship between money and the real economy and evaluate the role of monetary authorities.
The document outlines a course on monetary economics. The course covers topics like supply and demand for money, theories of inflation, and monetary policy over 5 units. It aims to help students understand the relationship between money and the real economy and evaluate the role of monetary authorities.
The document outlines a course on monetary economics. The course covers topics like supply and demand for money, theories of inflation, and monetary policy over 5 units. It aims to help students understand the relationship between money and the real economy and evaluate the role of monetary authorities.
To capture the influence of money on the real economy.
To provide an understanding of the role of monetary policy.
Learning Outcomes
After completion of this course, students will be able to:
Analyze the relationship between money and real economy. Evaluate the role of monetary policy for the smooth functioning of the economy. Appraise the importance of monetary authority in regulating the economy.
COURSE CONTENTS Unit 1 Supply of Money 10 Hours Definition and Kinds of money – Functions of money - Significance of money in a modern economy. Sources of money supply –High powered money - money multiplier and its determinants; Budget deficits and money supply; money supply in open economy; control of money supply. Unit 2 Demand for Money 12 Hours Classical approach to demand for money-Quantity theory approach – Fisher’s equation - Cambridge quantity theory – Neutrality of money, Classical dichotomy –The Keynesian theory of demand for money – Keynesian theory of interest - Changes in the money market and the interest rate – Gurley and Shaw’s thesis of liquidity of money – Radcliff Sayers thesis – Patinkin’s monetary theory. Unit 3 Post – Keynesian Theories of Demand for Money 13 Hours Baumol’s approach to Transaction Demand for money – Tobin’s theory of speculative demand for money - The portfolio optimization approach – Friedman’s Quantity theory of money- Crisis in Keynesian economics and the revival of monetarism; Mundell – Fleming model Asset markets, expectations and exchange rates; Monetary approach to balance of payments. Unit 4 Theory of Inflation 13 Hours The classical theory of inflation – The Keynesian theory of inflation – The monetarist view on inflation – Modern theories of inflation – Inflation in UDC’s – The economic effects of inflation – Measures to control inflation - Phillips curve – Inflation and the rate of unemployment – Modification in Phillip’s curve – Implications of Philip’s curve – Deflation. Unit 5 Monetary Policy 12 Hours Meaning and Scope of Monetary policy – Instruments of monetary policy – Transmission mechanism of monetary policy – The limitations and effectiveness of monetary policy- Efficiency of Monetary Policy – Monetary Policy with informal Financial Markets – Monetary – Fiscal Co-ordination - An analysis of IS&LM curve.
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