ECON 3115 - Money Theory

The aim of this course is to provide students with a systematic understanding of the role of money in the economic system and the main theories of money. The course covers the functions and measurement of money, interest rates, theories of money demand, the money-supply process, bank money and credit creation, the monetary base, the money multiplier and endogenous-money approaches. It also examines the theoretical relationships between money, the price level, inflation and exchange rates.

The course begins with the definition and functions of money and the historical evolution of monetary systems. It then covers monetary aggregates, liquidity, interest rates, bond prices and the Fisher equation. The classical quantity theory, the Cambridge approach, Keynesian liquidity preference and Friedman's modern theory of money demand are compared. The course then examines the money-supply process, the monetary base, central-bank and commercial-bank balance sheets, deposit and credit creation, the money multiplier and endogenous-money perspectives. The final part studies the relationship between money, the price level and inflation, seigniorage, monetary relationships in an open economy and emerging forms of digital money.

Yoktur.

Mishkin, Frederic S., The Economics of Money, Banking, and Financial Markets, Pearson. Cecchetti, Stephen G. & Kermit L. Schoenholtz, Money, Banking, and Financial Markets, McGraw-Hill. Walsh, Carl E., Monetary Theory and Policy, MIT Press (selected theoretical sections). Additional readings from central banks, the BIS, the IMF and academic studies will be provided through the LMS when appropriate.

Violations of scholastic honesty include, but are not limited to cheating, plagiarizing, fabricating information or citations, facilitating acts of dishonesty by others, having unauthorized possession of examinations, submitting work of another person or work previously used without informing the instructor, or tampering with the academic work of other students. Any form of scholastic dishonesty is a serious academic violation and will result in disciplinary action. Regarding the use of generative artificial intelligence (GenAI) tools in this course, the provisions of the 'Ethical Guide on the Use of Generative Artificial Intelligence in Scientific Research and Publication Activities of Higher Education Institutions (2024)' published by the Council of Higher Education (YÖK) shall apply.