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| IKT 315 | Monetary Theory and Policy | 3+0+0 | ECTS:4 | | Year / Semester | Fall Semester | | Level of Course | First Cycle | | Status | Compulsory | | Department | DEPARTMENT of ECONOMETRICS | | Prerequisites and co-requisites | None | | Mode of Delivery | Face to face | | Contact Hours | 14 weeks - 3 hours of lectures per week | | Lecturer | -- | | Co-Lecturer | None | | Language of instruction | Turkish | | Professional practise ( internship ) | None | | | | The aim of the course: | | The course aims to provide the students with a general knowledge on monetary theory and policy. Especially financial institutions, central banking, money supply and demand, interest theory and monetary policy. |
| Learning Outcomes | CTPO | TOA | | Upon successful completion of the course, the students will be able to : | | | | LO - 1 : | gain information about fundamental conceptions, process and methods about money market, monetary theory and policy. | 1,2,3,4,5,6,7 | 1,3 | | LO - 2 : | understand the logic of money markets, the description of money supply and its determinants, money demands theories, the aims and instruments of monetary policy and fiscal policies. | 1,2,3,4,5,6,7 | 1,3 | | LO - 3 : | determine the money supply by the aid of balance sheets of CB and dep.banks, the money multiplication, money demand and interest rates, the using of mon. pol. Instr., monetary transm. mech. and money and fiscal policy appl.. | 1,2,3,4,5,6,7 | 1,3 | | LO - 4 : | analyze the interaction mechanisms between financial sector and real sector by using techniques learned in monetary theory and policy courses and macroeconomics especially for Turkish economy and other economies. | 1,2,3,4,5,6,7 | 1,3 | | LO - 5 : | attain the results that can be used by institutions that implement economic stabilisation measures and monetary policy. | 1,2,3,4,5,6,7 | 1,3 | | CTPO : Contribution to programme outcomes, TOA :Type of assessment (1: written exam, 2: Oral exam, 3: Homework assignment, 4: Laboratory exercise/exam, 5: Seminar / presentation, 6: Term paper), LO : Learning Outcome | | |
| Introduction: Why study money? What is money? Definitions of money and its functions. The financial system: Financial markets; its structure, tools and functions, financial institutions. Financial sector in Turkey: The central bank; commercial banks; investment and development banks; nonbank institutions : insurance companies, credit cooperatives, mutual funds and investment trusts. Money supply: The definitions of money supply and the role of central banking; multiple deposit creation and money supply process; determinations of the money supply model and the money multiplier; factors that determine the money multiplier. The demand for money : Quantity Theory of Money: velocity of money and equation of exchange (Irving Fisher's approach) ; Cambridge approach to money demand; Keynes's Liquidity Preference Theory; Friedman's Modern Quantity Theory; Neo Keynesian money demand theories; empirical evidence on the demand for money.Interest theory. Monetary policy: The general structure of monetary policy: Goals of monetary policy; tools of monetary Policy: Required reserve ratio, discount policy, open market operations, interest rate, selective credit control and moral suasion. Monetary policy Strategy: The role nominal anchor; exchange-rate targeting; monetary targeting; inflation targeting; monetary policy application in Turkey. Monetary and fiscal policy in IS-LM curves: Real and monetary compartment in economy; factors that IS and LM curves to shift. Monetary crises. |
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| Course Syllabus | | Week | Subject | Related Notes / Files | | Week 1 | Meaning, features and occuring and kinds of money
| | | Week 2 | Functions of money and definition of money supply
| | | Week 3 | Functions of financial markets, basic structure and instruments of financial markets
| | | Week 4 | Functions of financial intermediation, mainly financial institutions and financial institutions in Turkey
| | | Week 5 | Cental Bank of Republic of Turkey, commercial banks, İstanbul Stock Exchange Market, bankers and other financial institutions.
| | | Week 6 | Definition of money supply and the role of central bank (theoretical definition of money supply and CBRT definition of money supply
| | | Week 7 | Process of money supply (deposits, loan, and money multipliers)
| | | Week 8 | Theories of the demand for money (Neo-classical Quantity Theory : Fisher approach and Cambridge approach) | | | Week 9 | Written mid-term exam | | | Week 10 | Modern quantity theory (Chicago approach of Neo-classical school) and Keynesian money demand theory
| | | Week 11 | Basic structure, goals and instruments of monetary policy
| | | Week 12 | Strategies of monetary policy (exchange rate targeting, monetary targeting, inflation targeting)
| | | Week 13 | The applications of monetary policies in Turkey since 1923
| | | Week 14 | Monetary and fiscal policies, real and nominal sectors and IS-LM analysis, inefficiency of moneary and fiscal policies (crowding out)
| | | Week 15 | Macroeconomic general balance analysis: according to different economic schools transmitions mechanism (general balance analysis in Keynesian and Classical systems)
| | | Week 16 | Written end-of-term exam | | | |
| 1 | Özyurt, H. 2006;Para Teorisi ve Politikası, Derya Kitabevi, Trabzon | | | |
| 1 | Keyder, N. 2002; para Teori-Politika-Uygulama, Seçkin Yayıncılık ve Dağıtım, Ankara | | | |
| Method of Assessment | | Type of assessment | Week No | Date | Duration (hours) | Weight (%) | | Mid-term exam | 9 | 04.04.2016 | 1 | 50 | | End-of-term exam | 16 | 23.05.2016 | 1 | 50 | | |
| Student Work Load and its Distribution | | Type of work | Duration (hours pw) | No of weeks / Number of activity | Hours in total per term | | Yüz yüze eğitim | 3 | 14 | 42 | | Sınıf dışı çalışma | 6 | 14 | 84 | | Arasınav için hazırlık | 5 | 2 | 10 | | Arasınav | 1 | 1 | 1 | | Dönem sonu sınavı için hazırlık | 6 | 2 | 12 | | Dönem sonu sınavı | 1 | 1 | 1 | | Total work load | | | 150 |
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