This unit provides an overview of the main elements of monetary economics, with emphasis upon macroeconomic issues - analysis of economic processes in which money enters the picture in an essential manner. The content primarily concerns economic principles and theory, but there is also considerable focus on the Australian monetary system and monetary policy in particular. The particular topics covered include: functions of money; the concept of 'liquidity'; money demand; determinants of money supply changes; financial crises and the 'lender of last resort' function of central banking; the Reserve Bank of Australia and the Australian Prudential Regulation Authority; term and risk structures of interest rates; alternative theories of the level of the rate of interest; the monetary policy transmission mechanism; monetary policy instrument choice; central bank credibility; policy reaction functions; the global monetary system; and Reserve Bank market operations.
1x2hr lecture/week, 1x1hr tutorial/week
multiple choice test (30%) and written paper (20%) and 70min Final exam (50%)
ECOS2001 or ECOS2901 or ECOS2002 or ECOS2902 or ECOS2040Prohibitions