THE UNIVERSITY OF CONNECTICUT DEPARTMENT OF ECONOMICS ECONOMICS (2411) - MONEY AND BANKING William T. Alpert Summer I 2013 "The theory of economics does not furnish a body of settled conclusions immediately applicable to policy. It is a method rather than a doctrine, an apparatus of the mind, a technique of thinking, which helps its possessor draw correct conclusions." - John Maynard Keynes CONTACT INFORMATION: Email: alpert@uconn.edu Telephones: 203-251-8413 (o) 212-494-5292 (ext. 2) (o) 203-384-2231 (home) 203-455-4534 (cell) NOTE: The best way to contact me is through my university email (alpert@uconn.edu). Office Hours: Any time by appointment: Office 323 (Stamford Campus) HuskyCT Chat Skype (william.alpert7) Response time: I will respond to your inquiries within 24 hours. If you do not receive a reply within that period, send your email again or try to contact me using a different method. CATALOG COURSE DESCRIPTION: The nature of money, the origins of monetary standards and systems, the development and operation of commercial banking, the Federal Reserve System, and international monetary agencies. COURSE GOALS: Upon completion of this course, students will be able to: 1. Identify a scientific revolution in the manner of Thomas Kuhn and explain how the field of money and banking is undergoing a scientific revolution now. 2. Explain why studying money, banking, and credit is relevant to our lives. 3. Analyze some of the complexities of financial markets and fractional reserve banking. 4. Explain some of the inner workings of the current financial institutions. 5. Manipulate current and historical data in the financial and credit markets using the tools of economics. 6. Apply credit, money, and financial market theory and policy to current and historical episodes in financial history. 7. Review financial news through the lens of an economist. 8. Analyze the theories of John Maynard Keynes, Gustav Cassel, Hyman P. 1
Minsky, Ludwig von Mises, Milton Friedman, and others in explaining the capitalist business cycle and the roles of money those theories. 9. Use the tools of monetary policy to solve problems commonly faced by central banks. 10. Explain the similarities and differences among Keynes, Friedman, Tobin, and Baumol with respect to money demand. 11. Examine various explanations for the Great Depression and the current economic crisis including the views of Mishkin, The Monetarists, Keynes, Minsky, Cassel and others. 12. Describe how the foreign exchange market impacts monetary policy and the mechanisms of foreign exchange trading. TEXTBOOK AND OTHER REQUIRED MATERIALS: 1. Textbook: The principal textbook for this course is Fredric S. Mishkin, The Economics of Money, Banking & Financial Markets, Addison Wesley, c 2010, 10 th edition. TO ANSWER THE QUESTION ON THE SYLLABUS NO, THE 9 TH OR EARLIER EDITIONS ARE NOT GOOD SUBSTITUTES FOR THE NEW 10 TH EDITION. 2. The Wall Street Journal: Students are also required to subscribe to The Wall Street Journal for the period of the course. It is important that we keep up with current economic news and The Journal is the best way that I know to do this. 3. MyEconLab: We will also be using the internet resource MyEconLab this semester: How to access your MyEconLab course can be found under the MyEconLab link on the home page of the course. 4. Other Required Materials: QuickTime to view movies. Adobe Reader to view PDFs. A text editing program, such as Word, to write and submit assignments. A spreadsheet program for manipulating problems, such as Excel. A fast, reliable internet connection. A University of Connecticut Supported Web Browser such as IE9, FireFox or Safari. TECHNOLOGY ASSISTANCE: It is your responsibility to be familiar with and able to use all the tools within HuskyCT including the Discussion, Assignment, and Assessment tools. You must be able to attach documents to Assignments for submission. If you need technical assistance, contact the Digital Learning Center. They can be reached by phone (860-486-1187) or via their website (http://dlc.uconn.edu/). NOTE: Activities for each week are usually due by 8:45 PM ET on a Sunday (anything available can be submitted early). Be sure your computer is operational and all tools are functional prior to the deadlines. Technological problems will not be accepted as valid excuses for missed work. The Course Introduction and Information 2
module contains practice activities to test your computer settings and familiarize you with HuskyCT. You should complete it the first day of class. COURSE SCHEDULE: AS AN ONLINE CLASS THIS CLASS HAS A RIGOROUS SCHEDULE YOU CAN WORK AHEAD BUT CANNOT FALL BEHIND AND RECEIVE CREDIT FOR THE WORK! NO EXCEPTIONS DO NOT ASK! WHILE THE SUMMER 1 SUMMER SESSION IS OFFICIALLY OPEN ON MONDAY, JUNE 3, 2013 AND CLOSED JULY 12 AT MIDNIGHT. [PLEASE NOTE: ADDITIONAL QUIZZES, ASSIGNMENTS, READINGS AND SO FORTH ARE VERY LIKELY TO BE ADDED AS THE SEMESTER PROGRESSES. YOU ARE RESPONSIBLE FOR BEING AWARE OF THESE ASSIGNMENTS AND HOW THEY WILL BE ASSESSED. MONEY AND BANKING IS A FAST CHANGING FIELD THAT IS DEVELOPING AS THE COURSE PROGRESSES. STUDENTS SOMETIMES COMPLAIN ABOUT RELEVANCE IF YOU HAVE SUCH AN ISSUE WITH THIS CLASS IT WILL BE A SURPRISE TO PROFESSOR ALPERT!] You will have several items due each week. You are not required to be online at any specific time, but you should plan on logging into the course a MINIMUM of three or four times a week to participate in discussions adequately, check announcements and assignments, read online material, etc. You should plan to spend a MINIMUM of 18 hours per week to get the most out this class (and get your money s worth) This may seem like a lot of time, and it is, but in a regular semester class it has been recommended that to maximize learning 3 hours outside of the class should be spent for everyone in this amounts to 9 hours per week outside a 3 hour class which means that 168 hours per semester should be spent on a 3 hour class. Here I am requiring less [do the math.]. 3
GRADING: Your grade will consist of the following: Quizzes 20% Assignments 19% MyEconLab 12% (see description below) Problem Sets 12% Online Discussions/Journals 6% Wall Street Journal Group Discussions 15% Term Publishing Assignment 6% Final Exam 10% NOTE: If the class average is below 75, grades will be curved up to a mean of 75 and IF class bonus assignments are given, UP TO an additional 5% can be earned towards your final grade. No individual bonus assignments will be offered. Quizzes There will be at least 18 quizzes. They are 10 questions each. They are generally based on material from your textbook (unless otherwise noted). You will have 30 minutes to complete each quiz. Be sure to save each answer as you go. If you go beyond 30 minutes, only those questions that were saved prior to the time limited will be graded. Assignments Most of the assignments will require you to work outside of HuskyCT and then attach a document via the Assignment tool. MyEconLab Finally, you are encouraged to use MyEconLab this semester. It is linked to the class HuskyCT website. I encourage you to work these problems (there are a large number) but you can work them until you get them correct (unlimited tries actually 99). There are due dates for each week s MyEconLab homework to help you keep up with the material, however, the all homework will be accepted up until the last day of class with no penalty. Your total average score in MyEconLab will be used to calculate your final grade as follows: Students scoring less than 50 percent will have that score equal 12 percent of the final grade. Students scoring over 50 percent will count 1.25 times the score and will equal 12 percent of the final grade. Students scoring 50 percent will earn 62.5 percent; if you score 60 percent you will earn 75 percent; 70 percent translates to 87.5 percent. A score of 80 percent will be awarded a score of 100 percent with a maximum of 125 percent possible. That means if you receive 100 percent on the MyEconLab problems you will earn not 12 but 15 points toward your final grade. Problem Sets Problem sets require you to solve common economic problems. They will be administered through the Assessment tool in HuskyCT. Questions are pulled randomly from a database of questions, so each student will have a different set of questions to solve. Review the directions for each problem set carefully, as they will require specific formatting (i.e. dollar 4
or percent sign and what decimal place to round your answer to) or the system will not recognize your answer as correct. They are not timed, but you must complete a problem set once you begin it. It cannot be stopped or restarted. Save each answer as you go and be sure to click submit when you are finished. Discussions There are two types of discussions used in this course: Journals and Forums. Journal discussions cannot be viewed by other students. They are only between you and your Professor. Journal postings are accessed using the Journal tool. Forum discussions are visible to everyone in the class and are accessed using the Discussion Board. You should read each other s forum posts and respond, comment, and or ask questions of each other to enrich the conversation. Discussion grades will be based on your input, logic, thoughtfulness, and involvement with other students. The Wall Street Journal (WSJ) Group Discussions The class is divided into five groups. You will be assigned to one of these groups for the WSJ Group Discussions. When it is your group s turn to post, you should work with your other group members on selecting an appropriate article, relating it to class content, and writing a thoughtful summary. This will require you to contact your group members via the group discussion board early in the week to have enough time to complete the post within the time allowed. Once a group posts a summary to the main discussion board, discussion about the post begins and continues for the remainder of the week. Group members will act as moderators and respond to their classmates posts. All non-group members will respond to the summary ask questions, add information, make comments, etc. Each group member is expected to individually participate in all activities. Of the 15% for your WSJ Discussion grade, 5% will be for your summary post, and 10% (2% for each of the 5 summaries) will be for your responses (when not part of the posting group) and moderating (when part of the moderating group). ATTENTION: If you do not see anything listed under the WSJ Group link in HuskyCT, it means you have not been assigned to a group. Contact your professor immediately to be assigned to a group. Term Publishing Assignment This is a course assignment and not attached to a particular module. You should begin working on this assignment very early in the course. Your submission is due on the last day of class. See the assignment for details. Final Exam Final Exam will be due the last week of class. THE FINAL EXAM IS COMPREHENSIVE COVERS EVERYTHING IN THE CLASS! IT WILL BE AN ONLINE PROCTORED EXAM USING A SERVICE CALLED PROCTORCAM. THERE IS NO ADDITIONAL FEE FOR THIS SERVICE. THE FINAL EXAM MUST BE COMPLETED BETWEEN JULY 10 AND JULY 12. MORE INFORMATION WILL BE MADE AVAILABLE CONCERNING THE FINAL EXAM AS IT BECOMES AVAILABLE. 5
GRADE BREAKDOWN Percent Grade 93 or more A 90-92.9 A- 87-89.9 B+ 83-86.9 B 80-82.9 B- 77-79.9 C+ 73-76.9 C 70-72.9 C- 67-69.9 D+ 63-66.9 D 60-62.9 D- 0-59.9 F LATE WORK: Missed quizzes and problems set may be made up on a case by case for partial credit. Late work can be at the instructor s discretion accepted for a grade of "F". If work is not turned in at all it will receive a grade of zero in your average. PLEASE RETAIN COPIES OF ALL OF YOUR WORK! While the formation of study groups is encouraged (but not as a substitute for individual study,) any form of collaboration between or among students before or during anyone s completion of any class assignment is strictly prohibited EXCEPT FOR EXPLICITLY GROUP ASSIGNMENTS. Such conduct will result in formal academic misconduct charges being brought against the student(s) involved. UNIVERSITY POLICY TOWARD ACADEMIC MISCONDUCT: All faculty members have been asked by the Dean to include the following statement on their syllabi: What is considered academic misconduct for undergraduate students? Academic misconduct includes, but is not limited to: Providing or receiving assistance on academic work (papers, projects, examinations) in a way that was not authorized by the instructor Any attempt to improperly influence (bribery, threats) any member of the faculty, staff, or administration of the University in any matter relating to academics or research Plagiarism Doing academic work for another student Presenting the same or substantially the same papers or projects in two or more courses without the explicit permission of the instructors Situations where one student knowingly assists another student in committing an act of academic misconduct, and any student doing so will be held equally accountable for the violation How is academic misconduct reported? 6
In most cases, an instructor will report a student for academic misconduct when he/she believes there is enough information to demonstrate a clear case. When an instructor believes there is sufficient evidence to demonstrate a clear case of academic misconduct, he/she shall generally notify the accused student in writing and orally within 30 days of the discovery of the alleged misconduct. Evidence of academic misconduct can include continuing suspicious behavior during an exam when warned by the instructor to stop and academic works being submitted by two students that are remarkably similar. The instructor is responsible for saving all information on academic misconduct in its original form and does not need to return any of the material to the student. Copies of the student's work and information about other evidence can be provided to the student upon request. In certain cases, the dean of a school or college may become aware of academic misconduct and may bring a complaint forward to the school or college's hearing body. What is the instructor's role in preventing academic misconduct? Instructors should take all reasonable steps to prevent academic misconduct. If an instructor observes suspicious behavior during an examination, he/she should warn the students involved and request them to stop the suspicious behavior. For further information on this rather unpleasant topic with which we WILL AVOID see The Office of Student Services and Advocacy: http://www.dosa.uconn.edu/ or more specifically The Division of Student Affairs: http://www.dosa.uconn.edu/student_code.html and the University of Connecticut s academic integrity policy http://www.community.uconn.edu/academic_integrity.html. Neither the University of Connecticut, nor will I tolerate any violation of its policies concerning discrimination and/or discriminatory harassment (including sexual harassment). For a statement of those policies and the procedures related to them please see the University s Office of Diversity and Equity s website at: http://www.ode.uconn.edu/ Special needs students will need official documentation of any accommodation requirements. This documentation can be obtained though the Office of Student Services. Specifically any students who has or thinks they have special needs should contact the Center for Students with Disabilities at http://www.studentaffairs.uconn.edu/csd.html INSTRUCTOR BACKGROUND: Degrees: AB (Lehigh University); MA, M.Phil., Ph.D. (Columbia University) all in economics. Previous teaching positions: Columbia University (while a graduate student), Washington University (St. Louis), and Lehigh University. 7
Research Interests: Economics of Compensation, Family Leave, Trade Unions, Mandated Benefits and Social Insurance, Economic and Financial Literacy. PLEASE NOTE: You are strongly urged to consult with me regarding the course at any mutually convenient time. In order for teaching to be successful (that is for learning to take place) I need your feedback. My job is to present the course material to you as effectively as I possibly can. Part of your job is to let me know how I'm doing. I can't read minds. You need to let me know what isn't working and perhaps just as importantly what is working. Is the textbook any good? I think it is the best on the market for this class, which is why I choose them but perhaps you don't think they are as valuable as they might be. How about the lectures? Are they clear? Do you get the point of the classes? You need to let me know. What about the technology? Suggestions on its better employment are always in order. You also need to ask questions. A question that is always in order is, "why is this important?" Any question regardless of how unimportant or foolish it may seem to you is important. Please ask it. It is almost always better to raise a question because if you need to ask the question the odds are excellent that half the class or more is also is confused about the same point and your question will assist them too. Are the writing assignments clear and useful? Is my feedback helpful? To conclude if you don t understand something IT IS BECAUSE I AM NOT SAYING IT RIGHT. This is not plasma physics, or higher mathematics. I hope for all our sakes you need to fully participate in this class. Thank you. WTA 8
ECON 2411 SUMMER SESSION 1 2013 - Schedule: Week 1 [JUNE 3 JUNE 9] All Activities due no later than SUNDAY, JUNE 9 at 8:45P.M. EDT Module Activities Due Date 1 - Money Read Module 1 Lecture Notes Read Chapters 1 & 3 Module 1 Discussions 1, 2, 3, 4 Module 1 Assignment Chapter 1 Quiz Sunday, JUNE 9, AT 8:45 P.M. EDT Chapter 3 Quiz Watch the PBS film, Ascent of Money MyEconLab Complete all assignments under Week 1 in MyEconLab, which covers chapters 1 & 3. Supply and Demand Review Quiz THIS QUIZ IS A HARD STOP YOU CANNOT GO ON WITH THE CLASS UNTIL YOU PASS IT WITH 90% OR BETTER YOU HAVE UNLIMITED ATTEMPTS TO PASS AND WILL RECEIVE THE HIGHEST GRADE OF THOSE ATTEMPTS. THE FIRST SCORE OF 90 OR MORE WILL BE RECORDED. E.G. IF YOU RECEIVE A 100 ON AN ADDITIONAL ATTEMPT TO IMPROVE YOUR SCORE THE 100 WILL NOT COUNT ONLY THE 90 WILL BE RECORDED. Sunday, JUNE 9 AT 8:45P.M. P.M. EDT Continue work on Term Publishing Assignment (due FRIDAY, JULY 12 at 8:45 P.M. EDT) 9
Week 2 All Activities due no later than SUNDAY JUNE 16 at 8:45P.M. EDT Module Activities Due Date 2 Financial Markets Read Module 2 Lecture Notes Read Chapters 2, 4, 5, 6 Read Web Chapter 1 - Nonbank Finance Read Appendix to Chapter 1 Module 2 Discussion Quizzes on Chapter 2, 4, 5, and 6 Sunday, JUNE 16, by 8:45 P.M. Module 2 Problem Sets: Practice Problem Set Present Value Mortgage Yield to Maturity Lottery Permanent Income Stream GDP Deflator (Appendix to Chapter 1) Percentage Change (Appendix Chapter 1) MyEconLab Complete all assignments in MyEconLab under Week 2, which covers chapters 2, 4-6. WSJ Group Discussion. Group 1 work on summary in WSJ Group Discussion Board. Post to Main Discussion Board by 6/13/13. The rest of the class should respond by 6/16/13. Continue work on Term Publishing Assignment (due FRIDAY, JULY 12 at 8:45 P.M. EDT) 10
Week 3 All Activities due no later than Sunday, JUNE 23 at 8:45P.M. EDT 3 Financial Institutions Read Module 3 Lecture Notes Read Chapters 8, 10, 11, 12 Chapter 8 Quiz Chapter 10 Quiz Chapter 11 Quiz Chapter 12 Quiz Sunday, JUNE 23 at 8:45P.M. EDT Module 3 Discussion Module 3 Assignment 1 MyEconLab Complete all assignments in MyEconLab under Week 3, which covers chapters 8, 10, 11, 12 WSJ Group Discussion. Group 2 work on summary in WSJ Group Discussion Board. Post to Main Discussion Board by 6/20/13. The rest of the class should respond by 6/23/13. Continue Work on Term Publishing Assignment (due FRIDAY, JULY 12 at 8:45 P.M. EDT)) 11
Week 4 All Activities due no later than Sunday, JUNE 30 at 8:45 P.M. EDT [PLEASE NOTE: THIS WEEK CONTAINS TWO MODULES: 4 AND 5] Module Activities Due Date 4 Financial Crises Read Module 4 Lecture Notes Read Chapter 9 Chapter 9 Quiz Module 4 Discussion Module 4 Assignment 1 5 Business Cycles Module 4 Assignment 2 Read Module 5 Lecture Notes Read Chapter 13 and 14 Sunday, June 30 at 8:45P.M. EDT Chapter 13 Quiz Chapter 14 Quiz Module 5 Assignment 1 Module 5 Assignment 2 Module 5 Assignment 3 MyEconLab Complete all assignments in MyEconLab under Week 4 which covers chapters 9, 13, 14. WSJ Group Discussion. Group 3 work on summary in WSJ Group Discussion Board. Post to Main Discussion Board by 6/27/13. The rest of the class should respond by 6/30/13. Continue Work on Term Publishing Assignment (due FRIDAY, JULY 12 at 8:45 P.M. EDT)) 12
Week 5 All Activities due no later than Sunday, JULY 7 at 8:45P.M. EDT [PLEASE NOTE: THIS WEEK CONTAINS TWO MODULES: 6 AND 7] Module Activities Due Date 6 Tools of Monetary Policy Read Module 6 Lecture Notes Read Chapter 15 Chapter 15 Quiz Module 6 Assignment 7 Monetary Theory Read Module 7 Lecture Notes Read Chapters 19 Chapter 19 Quiz Module 7 Assignment Data Assignment Part 1 All Activities due no later than Sunday, JULY 7 at 8:45P.M. EDT Data Assignment Part 2 MyEconLab Complete all assignments in MyEconLab under Week 5 which cover chapters 15 and 19 WSJ Group Discussion. Group 4 work on summary in WSJ Group Discussion Board. Post to Main Discussion Board by 7/3/13. The rest of the class should respond by 7/7/13. Continue Work on Term Publishing Assignment (due FRIDAY, JULY 12 at 8:45 P.M. EDT)) 13
Week 6 All Activities due no later than FRIDAY, JULY 12 at 8:45 PM EDT [PLEASE NOTE: THIS WEEK CONTAINS TWO MODULES: 8 AND 9] Module Activities Due Date 8 Alternate Theories of Business Cycles Read Module 8 Lecture Notes Read Chapters 16 Chapter 16 Quiz FRIDAY, JULY 12 AT 8:45 PM Module 8 Assignment Data Assignment Part 3 NOTE: Part 3 will not be released until after Part 1 and Part 2 are complete. 9 International Finance Read Module 9 Lecture Notes Read Chapters 17, 18 Chapter 17 Quiz FRIDAY, JULY 12 AT 8:45 PM Chapter 18 Quiz Module 9 Assignment MyEconLab - Complete all assignments in MyEconLab under Week 13 which covers chapters 17, 18. WSJ Group Discussion. Group 5 work on summary in WSJ Group Discussion Board. Post to Main Discussion Board by 7/10/13. The rest of the class should respond by 7/12/13. Continue Work on Term Publishing Assignment (due FRIDAY 7/12/13 at 8:45 P.M. EDT) 14
All Activities due no later than Friday JULY 12 at 8:45 PM EDT TERM PUBLISHING ASSIGNMENT and MAKEUP WORK Term Publishing Assignment IS DUE FRIDAY JULY 12 AT 8:45 P.M. EDT FRIDAY JULY 12 *Any makeup work must be completed by FRIDAY JULY 12 AT 8:45 P.M. EDT. AT 8:45 P.M. EDT 15
FINAL EXAMINATION INFORMATION Final Exam The Final Exam will be due the last week of class. THE FINAL EXAMINATION COVERS ALL OF THE MATERIAL IN THE CLASS AND WILL BE AVAILABLE FROM 8 AM WEDNESDAY JULY 10, 2013 UNTIL 6:00 PM FRIDAY, JULY 12. I t i s a n o n l i n e proctored exam. More information about proctoring will be provided. 16
Wall Street Journal Group Discussion NOTE: Refer to the WSJ directions for specific information about this assignment and to determine your group assignment. If you do not see your name in a group, contact your professor immediately!! 17