MONETARY AND FINANCIAL ECONOMICS

This course is a core educational activity of the Bachelor’s Degree programme in Economics and Business. The aim of the course is to provide an introduction to the main theories and analytical tools of modern monetary economics. The course examines the role of money, financial institutions, and central banks in the economy, and analyses how monetary policy is designed and implemented. Particular attention is devoted to the mechanisms through which policy decisions affect macroeconomic outcomes, as well as to the interaction between domestic economies and the international monetary environment.

1. Knowledge and understanding:
1.1. Understand the role of money, financial institutions, and central banks in modern economies
1.2. Understand the determinants of money demand, interest rates, and monetary equilibrium
1.3. Understand the design, implementation, and effects of monetary policy in domestic and international contexts
2. Ability to apply knowledge:
2.1. Analyse the effects of monetary policy actions on financial markets and macroeconomic variables
2.2. Apply standard monetary models to assess how central banks can achieve objectives such as price stability and economic stabilization
2.3. Compare alternative monetary policy strategies and evaluate their implications for economic outcomes
3. Making judgements:
3.1. Assess monetary and financial conditions and formulate informed views on their likely evolution
3.2. Evaluate the effectiveness of different monetary policy approaches in achieving macroeconomic objectives
3.3. Interpret and critically assess current policy debates in light of the theoretical frameworks studied in the course

Mandatory priority exam: see https://www.unive.it/web/en/4624/exams

Students are suggested to know principles of microeconomics and macroeconomics; introductory statistics (probability, hypothesis testing), basic mathematics for economics (algebra, calculus, constrained optimization)

The program for the course is as follows:
* The nature and functions of money
* The demand for money and interest rate determination
* The banking system and money supply
* Central bank operations and policy tools
* The transmission mechanism of monetary policy
* Monetary policy frameworks, credibility, and communication
* Exchange rates and international monetary linkages

Baglioni, A. (2024). Monetary Policy Implementation: Exploring the 'New Normal' in Central Banking. Springer. https://link.springer.com/book/10.1007/978-3-031-53885-8
Additional material on specific topics will be made available on Moodle.

Assessment consists of a written exam of 90 minutes. The exam includes multiple-choice and open questions. An optional group assignment may be completed to obtain a bonus. This bonus is valid only for the first exam session (first round of exams) and will be added to the final mark obtained in that session.

written

The instructor is responsible for ensuring the authenticity and originality of all examinations and coursework. In cases of suspected academic misconduct, an additional on-site assessment may be required during the exams, which may differ from the standard format.

Grades are expressed in a scale out of 30. The pass grade is 18/30. The use of books, notes, or any electronic devices (with the only exception of a non-programmable calculator) is not allowed during the examination. The exam assesses the degree to which students have achieved the expected learning outcomes described in the preceding sections of this syllabus.

Regarding the grading system (how grades will be assigned), regardless of whether the student is attending or non-attending:

A. Scores in the 18-22 range will be awarded when there is:
- sufficient knowledge and applied comprehension skills in relation to the course program;
- limited ability to gather and/or interpret data, forming independent judgments;
- sufficient communication skills;

B. Scores in the 23-26 range will be awarded when there is:
- fair knowledge and applied comprehension skills in relation to the course program;
- fair ability to gather and/or interpret data, forming independent judgments;
- fair communication skills;

C. Scores in the 27-30 range will be awarded when there is:
- good or excellent knowledge and applied comprehension skills in relation to the course program;
- good or excellent ability to gather and/or interpret data, forming independent judgments;
- fully appropriate communication skills.

1 to 17, ECTS equivalent: F
18 to 20, ECTS equivalent: E
21 to 23, ECTS equivalent: D
24 to 26, ECTS equivalent: C
27 to 28, ECTS equivalent: B
29 to 30, ECTS equivalent: A
30 lode, ECTS equivalent: A+

The course mainly adopts a conventional teaching approach, with lectures in person.

See course website on Moodle.