University of Michigan - Fall 2018
Econ 310: Money and Banking
Location: 1400 CHEM
Class Time: Lecture - MW - 11:30AM-1:00PM
Our focus in this class will be primarily on the structure, organization, and functioning of financial
markets in facilitating inter-temporal trade, and the role money plays in both intra- and inter-
temporal trade. Millions of participants in financial markets daily seek to borrow (trading future
consumption for current consumption) and lend (trading current consumption for future
consumption), and do so primarily through a host of financial intermediaries (including banks),
which reduce the transactions costs of doing so. As we trade into an uncertain future, there is
attendant risk and uncertainty that must be confronted by parties on all sides of such trades, and
this affects not only the characteristics of the instruments being traded but also the way roles of
financial intermediaries have evolved through time.
We will also consider the potential strengths and weaknesses of monetary policy, which impacts
financial markets first before we experience spillover effects in the real sectors of our economy:
production and sale of goods and services, accumulation of capital and economic growth, and
Money, Banking, and the Financial System, Third Edition, R. Glenn Hubbard, and Anthony
Patrick O’Brien, Pearson, ISBN 10: 0-13-452406-3, ISBN 13: 978-0-13-452406-1.
The Economics of Money, Banking and Financial Markets, Eleventh Edition, Frederic S. Mishkin,
Pearson, ISBN 13: 9780133836790.
Upon completion of this course students will
·possess understanding of the financial system, its institutions and roles
·understand the role of financial intermediaries
·be familiar with financial instruments
·understand the role, objectives, and tools of monetary policy
·understand the links between the real and financial sectors
There will be two midterm exams during the semester, plus a cumulative exam at the end of the
course. In addition, students will be expected to complete homework assignments.
The grade in the course will be based on your performance on the three exams and the
homework assignments. In particular, the following weights will be used
734 762 9238
Office Location: 213