Monetary Theory (Econ 511)

King Saud University, College of Business Administration / Department of Economics
2nd semester 1436/1437 AH
Course: Monetary Theory (Econ 511 )
Pro. Khalid Hamad Alqudair
Office: S193
Office Phone: [phone]
E-mail: [e-mail]

The course aims to review the basics of monetary theory, the quantity theory of money, theories of the demand for money, and the effectiveness of monetary policy. In addition, the course reviews and assesses Keynesian and monetary models.  Also, the course reviews the money supply process, exogenous and endogenous money, and the externality of money. In addition, the appropriate policies to curb inflation, business cycle theories, economic policies in an open economy, the optimal currency area, and money in the Islamic economics will be covered.
 
Outline:
 

• Basic concepts.
• Quantity theory of money.
• Walras General Equilibrium.
• Real balances effect.
• Modern theory of the quantity of money.
• Recent developments in the demand for money.
• Wicksell Monetary Theory.
• Restatement of  Keynesians and monetarists theories to Wicksell Monetary Theory.
• The stability of the demand for money function and effectiveness of monetary policy.
• Review and criticism of Keynesian and monetary models.
• Controversy between Keynesians and Monetarist Views over the effectiveness of monetary policy.
• Monetary theory of the New Classical school.
• Monetary Theory of New Keynesians and post Keynesians schools.
• Money supply process.
• The behavior of private commercial banks.
• The effect of the money multiplier on money supply.
• Exogenous and endogenous money supply.
• Externality of money.
• Theories of inflation, and the cost of its reduction according to the various economic schools, inflation targeting.
• Phillips curve in the short and long terms.
• Economic policies in an open economy.
• Monetary integration and optimal currency area.
• Nominal vs real business cycles models.
• Money in Islamic economics.
   
• Refrences:

1. Money, interest and capital, Colin Rogers (1989).
2. البطالة والتضخم: المقولات النظرية ومناهج السياسة الاقتصادية، أسامه بشير الدباغ (2007)
3. Monetary Theory and Policy, Carl E. Walsh (2003).
4. Monetary Policy Strategy, Frederic Mishkin(2007).
5. Number of articles distributed according to the above topics.

Make up policy:
Make up exams for excused absence will take place next week after the exam.

Grading:
• 1st exam will be held on 20/05/1437AH (20 marks).
• 2nd exam will be held on  04/07/1437AH (25 marks).
• summarize two selected articles in monetary theory (15 marks).
• Final exam will be held on 01/08/1437 AH (40 marks).