156-0535/01 – Monetary Policy of Open Economy (MPOE)
| Gurantor department | Department of Applied Economics | Credits | 4 |
| Subject guarantor | prof. Ing. Lumír Kulhánek, CSc. | Subject version guarantor | prof. Ing. Lumír Kulhánek, CSc. |
| Study level | undergraduate or graduate | Requirement | Choice-compulsory |
| Year | 1 | Semester | summer |
| | Study language | English |
| Year of introduction | 2009/2010 | Year of cancellation | 2020/2021 |
| Intended for the faculties | EKF | Intended for study types | Bachelor, Follow-up Master |
Subject aims expressed by acquired skills and competences
Student will be able:
- to understand conventional and nonconventional monetary policy
- to explain exchange rate
- to define monetary policy within and without monetary union
- to use modelling of monetary policy
Teaching methods
Lectures
Tutorials
Project work
Summary
Subject Monetary Economics provides information about modern monetary economics. First, there is explained what is the role of money in market economy, how does modern monetary system look like, what are conventional tools of monetary policy and how transmission mechanisms work. Next, the course deals with unconventional tools of monetary policy, seigniorage and independence and transparency of central banks. Also, topics such as monetary policy regimes, monetary policy uncertainty, prices of assets a financial stability are discussed in this course. Moreover, there is discussion about monetary policy within and out of monetary union. Finally, we analyse models of monetary policy and discuss actual questions related with monetary policy of CNB.
Compulsory literature:
WALSH, C. E. Monetary Theory and Policy. 4th Ed. Cambridge: MIT Press, 2017. 661 s. ISBN: 978-0-262-03581-1.
MAHADEVA L., STERNE G. Monetary policy framework in a global context. London: Routledge, 2000. 688 s. ISBN: 0-415-22618-X.
Recommended literature:
O'BRIEN, D. P. The development of monetary economics: a modern perspective on monetary controversies. Cheltenham: Edward Elgar Publishing, 2007. 265 s. ISBN: 978-1-84720-260-4.
CLAASSEN, E.-M. Global monetary Economics. Oxford University Press, 1996. 323 s. ISBN: 0-19-877464-8.
Way of continuous check of knowledge in the course of semester
Two written tests
E-learning
Other requirements
Lectures are compulsory.
Prerequisities
Subject has no prerequisities.
Co-requisities
Subject has no co-requisities.
Subject syllabus:
1. Theory of central banking, functions of central banks. Commercial banking, functions of commercial banks. Two-stage banking system.
2. Monetary policy – goals, tools, monetary base, balance sheet of a central bank and commercial banks. Open market operations, discount tools and its impact on money markets.
3. Money supply, simple multiplier, endogenous and exogenous money supply.
4. International financial markets, types of money markets in an open economy (call money markets, interbank markets, money market securities).
5. Exchange rate theory, exchange rate regimes, foreign exchange interventions.
6. Exchange rate theory. Theory of covered and uncovered interest rate parity.
7. Exchange rate and GDP in the short run, DD-AA model.
8. Test.
9. The law of one price, the Balassa-Samuelson model.
10. Exchange Rate Mechanism ERM II, history, rules, practice, application to “new EU member countries”.
11. World financial crisis, originate-to-distribute model, financial regulation and supervision in the EU and the USA.
12. Optimum currency area theory, traditional and modern version.
13. Presentations of projects
14. Test.
Conditions for subject completion
Occurrence in study plans
Occurrence in special blocks
Assessment of instruction