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.
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.