Assignments for Dr. PARKES' Money and Banking class

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              The Past Classes Outlines and PowerPoint

                                Week 3

          June 19, 2017:  Chapter 13 - Central Banks and The Federal Reserve System


          • Scenario #1 for Macroeconomics, here a decrease in economic growth abroad (we did an increase)
          • Chapter 13 - Central Banks and The Federal Reserve System
            • Origins of the "Fed"
            • Formal Structure: Govs, FOMC, and Banks
              • "Member" Banks - What do they do?
              • Board of Governors - 7 members
              • FOMC - the 12 members who decide on policy
              • Special Role of the NY Fed Bank
              • FOMC and their meetings
            • Who runs the Show? - the Informal Structure
            • How independent IS the Fed?
            • The ECB and other Central Banks
          • Miskin Chapter 13 PPT
          • Andrew's Day 11 PPT


          June 20, 2017:   Chapter 14 - The Money Supply Process


          • Chapter 14 - The Money Supply Process
            • Four Players in the Money Supply Process
            • The Fed's Balance Sheet
            • Control of the Monetary Base (high-powered money)
              • Federal Reserve Open Market Purchases and Sales from a bank versus the nonbank public
              • Shifts from Deposits into Currency
              • Foreign Exchange Intervention and the Monetary Base
              • Discount Loans
              • Other Factors and the Ability of the Fed to actually control the Monetary Base
            • Multiple Deposit Creation: A Smiple Model
              • 4 Assumptions
              • A Single Bank
              • The Banking System
              • Deriving the Formula
              • The Critique
          • An Overview of The Money Supply Model
            • Deriving the Money Multiplier
            • Intuition BEHIND the Multiplier
            • An Example with the FULL multiplier
          • Quiz: How Banks Create Money and the Simple Money Multiplier
          • Miskin Chapter 14 PPT


          June 21, 2017:   Chapter 15: THE TOOLS OF THE FED!


          June 22, 2017:   Chapter 16 - What Should Central Banks Do? Strategy and Tactics


          • Chapter 16:  What Should Central Banks Do?
            • The Six Goals of Central Banks
              • Price Stability and the Nominal Anchor
              • Central Banks' Main Goal
              • Hyperinflation
              • The Role of a Nominal Anchor - for example Core PCE inflation of 2%
              • The Time-inconsistency Problem - too easy, too often - no unexpected changes
            • High Employment
              • Two main reasons: human misery and loss of real GDP
              • Natural Rate of Unemployment - definition and how it is used.
            • Economic Growth - usually follows the High Employment goal
            • Stability of Financial Markets
            • Interest Rate Stability
            • Stability in Foreign Exchange Markets
            • Speculative Bubbles NASDAQ for example
            • Taylor Rule
            • Miskin Chapter 16 PPT


            •                   Week 2

          June 12, 2017:  Chapter 9 - Banking and the Management of Financial Institutions 


          • Chapter 9 - Banking and the Management of Financial Institutions
            • The Balance Sheet
              • The 4 assets and 4 liabilities of a bank
            • Basic Banking
            • General Principles of Bank Management
              • Asset Management
              • Liability Management (money center banks)
              • Capital Adequacy Management (ROA and EM)
            • Managing Credit Risk (Screening and Monitoring)
            • Credit Rationing
            • Off Balance Sheet Activities
          • Miskin Chapter 9 PPT
          • Andrew's Day 5 PPT

          June 13, 2017:   Chapter 10: Economic Analysis of Banking Regulation


          June 14, 2017:   Chapter 11: Banking Industry: Structure and Competition


          • Chapter 11: Banking Industry: Structure and Competition
            • History of Banking Early Bank Notes
            • Dual Banking Structure - 1st Bank of the US, 2nd Bank of the US and the era of wildcat banking 
            • Small bank versus Large Bank
            • Financial Innovation in Banking
            • Adjustable Rate Morgages, Debit Cards, E-banking
            • Avoidance of Existing Regs
            • Structure of Commercial Banking
            • Bank Consolidation and Nationwide Banking 
            • Separation of Banking and other Financial Service Industries
            • Erosion of Glass-Steagall, the "Chinese Wall"
          • Miskin Chapter 11 PPT


          June 15, 2017:   Chapter 12: The Financial Crisis


          • Chapter 12: The Financial Crisis
            • What is a Financial Crisis?
              • The Three Phases of a Financial Crisis (the Dynamics)
              • The Mother of All Financial Crises: The Great Depression
              • The Global Financial Crisis of 2007-9
              • The European Sovereign Debt Crisis
            • TARP
            • "Too Big To Fail"
            • Credit Default Swaps
            • MBS
            • Subprime
            • Treasury Report
          • Mishkin Chapter 12 PPT


                            Week 1

          June 5, 2017:  Chapter 1 - Why study this course?


          June 6, 2017:   Chapter 2: An Overview continued, and Chapter 4: The Meaning of Interest Rates


          • Chapter 2 continued:
          • Capital Markets
            • Stocks
            • Mortgages, and MBS
            • Corporate Bonds
            • US Government Securities
            • US Government Agency Securities
            • State and Local Government Bonds (Called "Munis" for Municipal Bonds)
            • Commercial Loans
          • The "Euro-market"
          • Function of Financial Markets - make sure to pick up the definitions of Transaction Costs, Risk Sharing, Economies of Scale, Economies of Scope,
            Asymmetric Information: Adverse Selection and Moral Hazard
          • A few comments on Financial Institutions and Regulation

          • Chapter 4: The Meaning of Interest Rates
            • Present Value and Future Value
            • Four Types of Credit Market Instruments
              • Simple loan
              • Fixed-payment loan
              • Coupon bond
              • Discount bond
            • Yield to Maturity
            • Relationship between the price of a bond and the yield to maturity, Table 1 in the text, p. 72
            • Perpetuity
            • Discount Bond - calculating a dealer's profit on a Treasury Bill
            • The Distinction between Interest Rates and Returns
            • See Table 2, p. 77 in the text
            • Real versus Nominal Interest Rates - Figure 1
            • GDP 2nd release, first quarter
          • Miskin Chapter 4 PPT
          • Chapter 4 Notes

          June 7, 2017:   Chapter 5: The Behavior of Interest Rates


          • Chapter 5: The Behavior of Interest Rates
            • Determinants of Asset Demand
              • 1. Wealth
              • 2. Expected Returns
              • 3. Risk
              • 4. Liquidity
            • The Theory of Portfolio Choice
            • Supply and Demand in the Bond Market
              • The Demand Curve
              • The Supply Curve
              • Market Equilibrium
              • Shifts in the Demand Curve
                • Wealth, expected interest rate, expected inflation, Risk, Liquidity
              • Shifts in the Supply of Bonds
                • Profitability of Investments, Expected Inflation, and Government Budget Deficit
              • Three Scenarios:
                • 1. The Fisher Effect
                • 2. The Business Cycle Effect
                • 3. Government Budget Deficits
            • Miskin Chapter 5 PPT

          June 8, 2017:   Chapter 5: continued and Chapter 6: Risk and Term Structure of Interest Rates


          • Chapter 5 continued
            • Supply and Demand in the Market for Money - the Liquidity Preference Framework
              • Shifts due to income, price level, and Fed changes

          • Chapter 6: Risk and Term Structure of Interest Rates
            • Risk - default risk and the rating agencies
            • Term structure and the yield curve
          • Chapter 6 PPT


email: andrew at andrewparkes.com
Last Update: June 29, 2017
By Andrew L. H. Parkes, Ph. D.