Syllabus for Econ 353
Money, Banking, and Financial Institutions
Last Updated: 28 March 2015
- Course Offering: Spring Semester 2011
- Meeting Time: TR 12:40-2pm
- Meeting Place: Ross Hall, Room 0124
- Course Instructor:
- Professor Leigh Tesfatsion
- Office: 375 Heady Hall
- Telephone: 294-7318 (Secretary)
-
https://www2.econ.iastate.edu/tesfatsi/
-
tesfatsi AT iastate.edu
- Instructor's Office and Office Hours:
- 375 Heady Hall
- Tuesdays 2:10-3:40pm, and by appointment
- Teaching Assistant's Contact Info and Office Hours:
- Ms. Kate Sinitskaya
- Office: 180B Heady Hall
- Office Tel: (515) 294-5895
- Office Hours: M 11-12, Thurs 2:10-3, and by appointment
-
esin AT iastate.edu
-
353 Homepage (Mishkin textbook, TA info, Course Objectives, & Grading Policy)
-
Exercise Info Site
-
Exam Info Site
Syllabus Table of Contents
- Overview: Readings and Assignments
- Course Topics: Detailed Readings and Assignments
- Section 1: Financial Economics: Fundamental Concepts (Mishkin Chapters 1-3)
- Section 2: Domestic and International Financial Markets (Mishkin Chapters 4-5, 7, 20-21)
- Section 3: Financial Institutions (Mishkin Chapters 8-12)
- Appendix A: Midterm Exam Review Materials
- Appendix B: Final Exam Review Materials
Overview of Readings and Assignments
The basic required readings for Econ 353 (Fall 2010) consist of the Mishkin text chapters 1-5, 7-12, and 20-21, plus accompanying on-line chapter notes and in-class discussion materials. 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.
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 html notes and/or ppt slides 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 html 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 come to class prepared to participate in a class discussion of these "key in-class discussion questions."
Course Topics (Detailed Readings and Assignments)
Section 1. Financial Economics: Fundamental Concepts
Mishkin Chapter 1: Basic Definitions and Empirical Data Overview
Mishkin Chapter 2: Overview of the Financial System
- **
Key in-class discussion questions for Mishkin Chapter 2: Part A
- ** Mishkin Chapter 2 ("An Overview of the Financial System"
- **
L. Tesfatsion, Notes on Mishkin Chapter 2: Part A
(html notes,31K),
(ppt,193K)
-
** Empirical Data for the U.S. Economy: Packet 2
(Financial Crises), HAND-OUT. See also the on-line version
here (pdf,2.1M)
that contains most (but not all) of this hand-out.
-
**
ANSWER KEY (answers at end) for Take-Home Exercise 2 on Mishkin Chapter 2:Part A (Due: Tuesday, Jan 25, 12:40pm).
- **
Key in-class discussion questions for Mishkin Chapter 2: Part B
- **
L. Tesfatsion, Notes on Mishkin Chapter 2: Part B
(html notes,37K),
(ppt,421K)
-
**
ANSWER KEY (answers at end) for Take-Home Exercise 3 on Mishkin Chapter 2:Part B (Due: Tuesday, February 1, 12:40pm).
-
Practice Exercise Sets for Mishkin Chapter 2
-
Websites Related to Mishkin Chapter 2
Mishkin Chapter 3: What is Money?
**
Answer Keys for First Midterm Exam (Thursday, Feb 10):
[ Version A,
Version B,
Version C]
Section 2. Financial Markets (Domestic and International)
Mishkin Chapter 4: Understanding Interest Rates
- **
Key in-class discussion questions for Mishkin Chapter 4: Part A (pp. 68-80)
- **
Mishkin Chapter 4:Part A ("Understanding Interest Rates",
pp. 68-80)
- ** L. Tesfatsion, Notes on Mishkin Chapter 4: Part A (pp. 68-80)
(html),
(ppt,94K)
-
**
ANSWER KEY (answers at end) for Take-Home Exercise 5 on Mishkin Chapter 4:Part A (Due: Tuesday, February 22, 12:40pm).
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Practice Exercise Sets for Mishkin Chapter 4: Part A (pp. 67-80)
- **
Key in-class discussion questions for Mishkin Chapter 4: Part B (pp. 80-89)
- **
Mishkin Chapter 4:Part B ("Understanding Interest Rates", pp. 80-89)
- ** L. Tesfatsion, Notes on Mishkin Chapter 4: Part B (pp. 80-89)
(html),
(ppt,362K)
-
Practice Exercise Sets for Mishkin Chapter 4: Part B (pp. 80-89)
-
Websites Related to Mishkin Chapter 4
Mishkin Chapter 5: Behavior of Interest Rates
Mishkin Chapter 7: Stock Market Pricing
-
**
Key in-class discussion questions for Mishkin Chapter 7:
Part A (pp. 147-152),
Part B (pp. 152-165).
- ** Mishkin Chapter 7: The Stock Market (147-165))
-
** L. Tesfatsion, Notes on Mishkin Chapter 7: Part A (pp. 147-152)
(ppt,164K)
-
** L. Tesfatsion,
Notes on Mishkin Chapter 7: Part B (pp. 152-165)
(ppt,97K)
-
**
How to Read Stock Market Tables
-
**
ANSWER KEY (answers at end) for Take-Home Exercise 7 on Mishkin Chapter 7 (Due: Tuesday, March 8, 12:40pm).
-
*
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.
-
*
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.
-
*
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.
-
Practice Exercise Sets for Mishkin Chapter 7
-
Websites Related to Mishkin Chapter 7
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Practice Exercise Sets for Mishkin Chapter 7: Part B (pp. 152-165)
-
Websites Related to Mishkin Chapter 7: Part B (pp. 152-165)
**
Answer Keys for Second Midterm Exam (Thursday, March 10):
[ Version A,
Version B,
Version C]
Mishkin Chapter 20: The Foreign Exchange Market
Mishkin Chapter 21: The International Financial System
Section 3. Financial Institutions
Mishkin Chapter 8: An Economic Analysis of Financial Structure
Mishkin Chapter 9: Financial Crises and the Subprime Meltdown
Mishkin Chapter 10: Banking and the Management of Financial Institutions
Mishkin Chapters 11-12: Banking Industry: Structure, Competition, and Regulation
(5/2/2011
**
Answer Keys for Final Exam (Monday, May 2):
Version A,
Version B
Appendix A: Midterm Exam Review Materials
Two midterm exams have been scheduled for Econ 353 in Spring 2011, to be held during regular class hours. The first midterm exam will be held on Thursday, February 10th, and the second midterm exam will be held on Thursday, March 10th. 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 Spring 2011 will be provided at the above 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 "practice" midterm exams from previous years are provided at the Exam Information Site -- see also below for direct pointers.
Appendix B: Final Exam Review Materials
The final exam for Econ 353 in Spring 2011 will be held on Monday, May 2, 12:00-2:00 p.m., in our regular classroom in accordance with the
ISU Spring 2011 tentative final exam schedule.
Please refer to the
Econ 353 Exam Information Site
for important additional information about the final exam.
A pointer to a final exam review guide for Spring 2011 will be provided 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 "practice" final exams from previous years are provided at the above Exam Information Site as well as below.
-
Practice Final Exams for Econ 353
Important Caution:
- Please note that the topic coverage for the current offering of Econ 353 might differ to some extent from past offerings in terms of both pace and content. This must be kept carefully in mind when reading through the practice final exams and final exam review guides from past offerings of Econ 353.
Copyright © 2011 Leigh Tesfatsion. All Rights Reserved.