"G. d'Annunzio"
Basic knowledge of mathematics, statistics, microeconomics and macroeconomics.
The course examines the functions of money, the role of financial intermediaries and the management and transmission of monetary policy in modern industrialized economies. In particular, the course will study the European Economic and Monetary Union.
Part A: Introductory Notions 1. Definition of money. Barter economy and monetary economy. The formation of monetary aggregates over time. The role of financial innovation. Part B: The Money Supply and the instruments of monetary policy. 2. Monetary and financial aggregates. Nature and Functions of the Central Bank. Tagets and instruments of monetary policy. Institutional aspects and modus operandi of the European Central Bank and a comparison with the main Central Banks. Financial innovation. Creation and use of the Monetary Base. The Money Market and open market operations. Foreign channel and interventions on the foreign exchange market. Methods of financing the financial system. The various auction systems. The "corridor" of official rates. The compulsory reserve regime and the interbank market. The payment system. The term structure of interest rates. The relationship between short-term rates and long-term rates. The implementation of Italian monetary policy from the seventies to the present. 3. The multipliers of Deposits and Credit. The markets of the Monetary Base, Deposits and Credit. Money supply. Part C: Monetary Theory 4. The problem of the introduction of money in general equilibrium models. Microeconomic foundations of monetary theory 5. The demand for money in traditional models. Quantitative Theory and Preference for Liquidity. The Baumol-Tobin model and portfolio choices. The demand for money in M. Friedman. An outline of the monetarist-Keynesian debate. Part D: The transmission of monetary policy. 6. The transmission mechanism of monetary policy and the effects on the real economy. Traditional visions in a closed economy and an open economy: the classic macroeconomic model, the IS-LM model. Monetary policy strategies. The Inflation Targeting debate. Part E: The central bank's rules of conduct. 7. Expectations, inflation and monetary theory. Inflation dynamics with adaptive and rational expectations. The limits of monetary policy and the proposition of ineffectiveness of economic policy. 8. Rules, discretion and credibility of monetary policy. Dynamic inconsistency and reputational equilibria. The independence of the central bank. Game theory and economic policy.
Monetary Economics Prof. Alessandro Pandimiglio Part A: Introductory Notions 1. Definition of money. Barter economy and monetary economy. The formation of monetary aggregates over time. The role of financial innovation. Part B: The Money Supply and the instruments of monetary policy. 2. Monetary and financial aggregates. Nature and Functions of the Central Bank. Tagets and instruments of monetary policy. Institutional aspects and modus operandi of the European Central Bank and a comparison with the main Central Banks. Financial innovation. Creation and use of the Monetary Base. The Money Market and open market operations. Foreign channel and interventions on the foreign exchange market. Methods of financing the financial system. The various auction systems. The "corridor" of official rates. The compulsory reserve regime and the interbank market. The payment system. The term structure of interest rates. The relationship between short-term rates and long-term rates. The implementation of Italian monetary policy from the seventies to the present. 3. The multipliers of Deposits and Credit. The markets of the Monetary Base, Deposits and Credit. Money supply. Part C: Monetary Theory 4. The problem of the introduction of money in general equilibrium models. Microeconomic foundations of monetary theory 5. The demand for money in traditional models. Quantitative Theory and Preference for Liquidity. The Baumol-Tobin model and portfolio choices. The demand for money in M. Friedman. An outline of the monetarist-Keynesian debate. Part D: The transmission of monetary policy. 6. The transmission mechanism of monetary policy and the effects on the real economy. Traditional visions in a closed economy and an open economy: the classic macroeconomic model, the IS-LM model. Monetary policy strategies. The Inflation Targeting debate. Part E: The central bank's rules of conduct. 7. Expectations, inflation and monetary theory. Inflation dynamics with adaptive and rational expectations. The limits of monetary policy and the proposition of ineffectiveness of economic policy. 8. Rules, discretion and credibility of monetary policy. Dynamic inconsistency and reputational equilibria. The independence of the central bank. Game theory and economic policy.
G. Di Giorgio: Monetary Theory and Policy, fifth edizione, CEDAM, Padova 2016.
G. Di Giorgio – S. Nisticò - A. Pandimiglio – G. Traficante: Problems of Monetary Theory and Policy, CEDAM, Padova 2017.
The teaching is structured in at least 48 hours of frontal lectures about monetary theory, with applications and examples. The course is accompanied by exercises held in the classroom by the teacher, in which problems and exercises assigned in the classroom are performed and corrected. Attendance is optional, recommended, and the final exam will be the same for attending and not attending students.
The final exam will be divided into a written test on topics covered during the course and present in the program. The written test will consist of theoretical questions, exercises and problems, to which they will be attributed a total of 30 points.
E-mail: a.pandimiglio@unich.it Website: www.ch.unich.it/~pandimiglio
