Aims

To provide students with an advanced understanding of the role of money and banking institutions in the international economy.

The module aims to provide the theoretical basis and empirical evidence for understanding the basic functioning of international financial markets and institutions. It starts with providing a thorough analysis of the international financial system and regulatory framework; it then concentrates on issues related to money and banking, such as money supply, money demand, and the determination of interest rates and exchange rates. It also analyses both theoretical underpinnings and empirical evidence of the aforementioned aspects of international money.

Outline Of Syllabus

1. Introduction: Money, banking, and financial markets
2. The functions and regulation of the financial system
3. Money 1: The definition(s) of money, functions of money, theories of the demand for money,
4. Money 2: Multiple deposit creation and the money supply process, the role of central banks
5. Interest rates 1: The behaviour of interest rates
6. Interest rates 2: The risk and term structure of interest rates, the bond market
7. International finance: The foreign exchange market, exchange rate regimes
8. The foreign exchange market: Determination of exchange rates in the short and long run, interactions between the foreign exchange market and the market for money

Teaching Rationale And Relationship

- Lectures provide the basic structure of the methods and theories that are introduced and an overview of the current issues
- Seminars provide an opportunity to enhance understanding of the theoretical aspects of the module.

Assessment Rationale And Relationship

The nature of this module makes it suitable for assessing students with an essay. It needs to test students' knowledge, in-depth understanding and ability to articulate their subjective opinions on the international financial markets.