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Program Type: 
Non Thesis
Course Code: 
ECON 514
Course Type: 
Course Language: 
Course Coordinator: 
Courses given by: 
Course Objectives: 

The aim of the course is to analyze the macroeconomic effects of monetary policy on an economy operating in the context of international financial arrangements.

Course Content: 

The course begins with an analysis of the money supply process, focusing on central banking, the goals, tools and conduct of monetary policy. We then turn to a discussion of the alternative approaches to money demand. After analyzing the determination of interest rates in a closed economy, the determination of the exchange rates in the long- and short-runs is discussed. The course ends by relating monetary theory and policy to the macroeconomic tools of IS-LM and Aggregate Supply and Demand and discussing the monetary transmisson mechanism.

Teaching Methods: 
1: Lecture, 2: Question-Answer, 3: Discussion, 12: Case Study
Assessment Methods: 
A: Testing, C: Homework, Q: Quiz

Vertical Tabs

Course Learning Outcomes

1. To acquire a good understanding of central bank operations and the central banking practices around the world.
2. To acquire an analytical understanding of the basic elements of monetary policy.
3. To distinguish between the impacts of different monetary policies and be able to evaluate them critically.
4. To have a good understanding of the operation of the foreign exchange markets.
5. To be able to relate monetary theory and policy to macroeconomic analysis.
6. To understand the different explanations of inflation and be able to choose between them.

Course Flow

Week Topics Study Materials
1 Introduction to the Course  
2 Central Bank, A Global Perspective  
3 The Current State of the Turkish Central Banking: A Comparison  
4 The Money Supply Process  
5 Tools of Monetary Policy  
6 Conduct of Monetary Policy  
7 Alternative Approaches to Money Demand  
8 Midterm  
9 The Foreign Exchange Market  
10 The International Financial System and Foreign Exchange Crises Around the World (Mexico, 1994; East Asia 1997; Brazil 1999; Argentina 2002; Turkey 2001).  
11 The IS and LM (MP) Curves  
12 The Aggregate Supply and Demand Analysis  
13 Monetary Policy Theory  
14 Transmission Mechanism in Monetary Policy  

Recommended Sources

Textbook Frederic Mishkin The Economics of Money, Banking and Financial Markets, 10th Edition, 2013.
Additional Resources  

Material Sharing

Documents via the Reserve in the Library
Assignments T.B.A during the Semester
Exams A Mid-term and a Final


Mid-terms 1 50
Quizzes (attendance, presentation, etc.)    
Assignments 1 50
  Total 100
Contribution of Final Examination to Overall Grade   50
Contribution of In-Term Studies to Overall Grade   50
  Total 100

Course’s Contribution to Program

No Program Learning Outcomes Contribution
    1 2 3 4 5
1 Formulate and develop a critical and comprehensive understanding of global and national economic problems, and construct and design practical solutions;         x
2 Extract information and concepts from various disciplines in social sciences and integrate them under the rubric of economics;     x    
3 Construct testable hypotheses to find original, practical solutions to various social ills and problems;       x  
4 Develop an analytical understanding of economic problems, and the ability to evaluate the inherent logic, assumptions and conclusions of alternative approaches;         x
5 Develop the necessary technical skills to evaluate alternative approaches in economics;         x
6 Formulate research projects, plan and conduct research in social sciences in general and in economics in particular;       x  
7 Present the results of their research in national and international conferences and in scientific and professional venues;     x    
8 Apply the scientific / academic modes of thought and analysis to their professional lives and form a bridge between the analytical and abstract modes of thinking of academia and the practical and dynamic skills of business life;       x  
9 Nurture and develop the analytical and technical skills necessary to continue their studies at a Ph.D. level, either in Turkey or elsewhere around the globe.         x


Activities Quantity Duration (Hour) Total Workload (Hour)
Course Duration (Including the Exam Week: 15 x total course hours) 16 3 48
Hours for off-the-classroom study (Pre-study, practice) 16 10 160
Mid-terms 1 10 10
Quizzes (attendance, presentation, etc.)     0
Assignments 1 20 20
Final Examination 1 10 10
Total Work Load     248
Total Work Load / 25 (s)     9.92
ECTS Credit of the Course     10