Econ 353 Syllabus
Money, Banking, and Financial Institutions
Last Updated: 13 December 2007
- Course Offering: Fall 2007
- Meeting Time: TR 2:10-3:25pm
- Meeting Place: 169 Hamilton
- Course Instructor:
- Professor Leigh Tesfatsion
- Office: 375 Heady Hall
- Telephone: 294-7318 (Secretary)
-
http://www.econ.iastate.edu/tesfatsi/
tesfatsi AT iastate.edu
- Instructor's Office and Office Hours:
- 375 Heady Hall
- F 10-12 and by appointment
-
353 Homepage (TA info, Course Objectives, & Grading Policy)
-
Exercise Info Site
-
Exam Info Site
Syllabus Table of Contents
Overview of Readings and Assignments
The basic required readings for
Econ 353 consist of the following Mishkin text
chapters (plus accompanying on-line chapter notes and in-class discussion
materials) in order of coverage: 1-5, 7, 17-18, and 8-11.
All required readings are marked with either one or two asterisks.
The required readings marked with a double asterisk (**) will be emphasized
in classroom discussion questions as well as on exams and take-home
exercises. The required readings marked with only a single asterisk (*) will
be given less emphasis in classroom discussion questions and on exams and
take-home exercises.
Web links to relevant on-line materials are provided at the end of
many of the topic sections for students interested in further study.
Browsing these links is recommended but not required. Interested students
may also want to access a more extensive list of annotated pointers to on-line
resources for macro and financial economics maintained
here.
Practice exercises and practice exams are provided for self-help and
will not be specifically covered in class. Students are strongly encouraged
to work through the practice exercises at the end of each Mishkin text
chapter, as well as the on-line practice exercises and practice exams
provided below, in order to prepare for the exams and take-home exercises for
this course. Note that answers are provided in the Mishkin text for half of
the end-of-chapter practice exercises.
Some additional required readings may be incorporated as the course
proceeds. Consequently, if you miss any classes, be sure you check the
on-line syllabus to ensure you have up-to-date information about required
readings. Students who have to miss classes should arrange to obtain class
handouts either from other students or from me during my office hours.
Notes on specific in-class discussions on missed class days must be obtained
from other students in attendance. Any required readings or assignments
added to the syllabus subsequent to the first day of classes or updated in
content subsequent to their first posting will be marked with a "new" or
"updated" icon, respectively, for at least a week. All such changes will
also be announced in class.
IMPORTANT GENERAL INSTRUCTIONS: As each assigned Mishkin chapter is
successively covered in class, you should plan to download and study the
required on-line notes for this chapter ahead of the day(s) scheduled for
class discussion of this chapter, along with the assigned Mishkin chapter
itself. At the end of the on-line notes you will find a list of "basic
concepts and key issues" that you can use to guide your study. You should
also download and think about, in advance, the on-line "key in-class
discussion questions" for the assigned Mishkin chapter. On the day(s) the
assigned Mishkin chapter is scheduled to be covered in class, please: (a)
bring to class a copy of the on-line notes for this Mishkin chapter; (b)
bring to class a copy of the on-line "key in-class discussion questions" for
this Mishkin chapter; and (c) be prepared to participate in a class
discussion of these "key in-class discussion questions."
Course Topics (Detailed Readings and Assignments)
Section 1. Fundamentals of Financial Markets
Mishkin Chapter 1: Basic Concepts and Definitions
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**
Key in-class discussion questions for Mishkin Chapter 1
- ** Mishkin Chapter 1 ("Why Study Money, Banking, and Financial Markets?")
-
**
PPT Overview of Mishkin Chapter 1: Basic Financial Concepts and Definitions (pdf,1.2MB)
- **
Notes on Mishkin Chapter 1: Some Additional Empirical Context
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**
"Measuring the Volatility of Stock Returns: Points to Ponder" (pdf,54K)
- *
J. Bradford DeLong and Lawrence H. Summers,
"The `New Economy': Background, Historical Perspective,
Questions, and Speculations"
(html,84K)
Federal Reserve Bank of Kansas City Economic Review, Volume
86, Number 4, Fourth Quarter 2001, pages 29-59. ON-LINE
-
**
ANSWER OUTLINE for Take-Home Exercise 1 on Mishkin Chapter 1
(Due: Tuesday, September 4, 2:10pm, 2007)
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Practice Exercise Sets for Mishkin Chapter 1
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The
Economagic Economic Time Series Page
maintained by Economagic Inc. provides access to an extensive variety of
economic time series (primarily U.S. data) with customized graphing and printing facilities.
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Other Websites Related to Mishkin Chapter 1
Mishkin Chapter 2: Overview of the Financial System
Mishkin Chapter 3: What is Money?
Section 2. Financial Markets (Domestic and International)
Mishkin Chapter 4: Understanding Interest Rates
Mishkin Chapter 5: Behavior of Interest Rates
Mishkin Chapter 7: Stock Market Pricing
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**
Key in-class discussion questions for Mishkin Chapter 7: Part A (pp. 151-156)
- ** Mishkin Chapter 7:Part A ("Stock Market Pricing", 151-156)
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**
Notes on Mishkin Chapter 7: Part A (pp. 151-156), pdf file (107K)
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**
Take-Home Exercise 7 on Mishkin Chapter 7:Part A (pp. 151-156) (Due: Tuesday, October 30, 2:10pm, 2007)
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*
Psychology and Behavioral Finance,
an interesting synopsis of "behavioral finance" available at the
Investor Home Website .
Behavioral finance
is a relatively recent approach to financial economics that attempts to understand and explain how emotions and cognitive errors influence investors and affect financial decisions.
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*
Robert Shiller maintains an interesting home page for the second edition (2005) of his book titled
Irrational Exuberance.
The site provides links to resource materials on speculative bubbles in stock and real estate markets, and on behavioral finance in general.
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Practice Exercise Sets for Mishkin Chapter 7: Part A (pp. 151-156)
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Websites Related to Mishkin Chapter 7: Part A (pp. 151-156)
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**
Key in-class discussion questions for Mishkin Chapter 7: Part B (pp. 156-177)
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** Mishkin Chapter 7: Part B ("Rational Expectations and the
Efficient Market Hypothesis", pp. 156-177)
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**
Notes on Mishkin Chapter 7: Part B (pp. 156-177), pdf file (94K)
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**
ANSWER OUTLINE for Take-Home Exercise 8 on Mishkin Chapter 7:Part B (pp. 156-177) (Due: Tuesday, October 30, 2:10pm, 2007)
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*
How to Read Stock Market Tables
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*
The Efficient Market Hypothesis (EMH)
and
Historical Stock Market Anamolies,
interesting discussions of the EMH and apparent stock market violations of the EMH provided
at the
Investor Home Website .
- Note: As seen in these discussions, standard
finance theory categorizes the EMH into weak, semi-strong, and strong versions depending on the amount of information
that is assumed to be incorporated into financial asset prices. In contrast, Mishkin Chapter 7 categorizes the EMH into weaker and stronger forms depending on whether prices are assumed to be consistent with rational expectations, market equilibrium, and the absence of bubbles.
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Practice Exercise Sets for Mishkin Chapter 7: Part B (pp. 156-177)
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Websites Related to Mishkin Chapter 7: Part B (pp. 156-177)
Mishkin Chapter 17: The Foreign Exchange Market
Mishkin Chapter 18: The International Financial System
Section 3. Financial Institutions
Mishkin Chapter 8: An Economic Analysis of Financial Structure
Mishkin Chapter 9: Banking and the Management of Financial Institutions
Mishkin Chapters 10-11: Banking Industry: Structure, Competition, and Regulation
Appendix A: Midterm Exam Review Materials
Two midterm exams have been scheduled for Econ 353 in Fall 2007, to be held
during regular class hours. The first midterm exam will be held on Thursday,
September 27, and the second midterm exam will be held on Thursday, November 1.
Please refer to the
Exam Information Site
for important additional information about these two midterm exams. A
pointer to a midterm exam review guide for fall 2007 will be provided below and at the Exam
Information Site at least one week prior to each of the two midterm exams.
To give students an advance idea what to expect, pointers to on-line Econ 353
midterm exam materials from previous years are also provided below.
Important Caution:
Please note that the Econ 353 topic coverage for this year may differ
to some extent from the topic coverage for previous years in terms of both
pace and content. Consequently, the topic coverage on any practice
Econ 353 midterm exams and midterm exam review guides from previous years that
are made available below may differ somewhat from the topic coverage for this
year.
Appendix B: Final Exam Review Materials
The final exam for Econ 353 in Fall 2007 will be held in the
regular classroom at the time and date indicated in the ISU Bulletin. Please
refer to the
Exam Information Site
for important additional information about the final exam. A pointer to a
final exam review guide for fall 2007 will be provided below and at the Exam Information
Site at least one week prior to final exam week. To give students an advance
idea what to expect, pointers to Econ 353 final exam materials from previous
years are also provided below.
Important Caution:
Please note that the Econ 353 topic coverage for this year may differ
to some extent from the topic coverage for previous years in terms of both
pace and content. Consequently, the topic coverage on any practice
Econ 353 final exams and final exam review guides from previous years that are
made available below may differ somewhat from the topic coverage for this
year.
Copyright © 2007 Leigh Tesfatsion. All Rights Reserved.
(12/13/07)
ANSWER OUTLINE for Fall 2007 Final Exam