General Information
Monetary economics is concerned with the effects of monetary institutions (such as Reserve Bank of Australia, RBA) and policy actions on economic variables (such as inflation and interest rates) that are of importance to individuals and firms. Money and monetary policy is an important argument in decision making in the fields of Accounting, Economics, and Finance as well as Business majors. This subject aims to provide basic understating of money and monetary policy with special reference of monetary policy in Australia. The subject will consist of two parts. In the first part (first half), we will study the role of money in the economy, the use of money in the digital economy, the structure of financial markets; determination and structure of interest rates; determination of exchange rates; theories of money demand and the money supply process. The second part of the subject examines monetary policy with a special reference to monetary policy by the Reserve Bank of Australia. The specific topics include choice of targets and instruments of monetary policy; monetary policy in an open economy; money and inflation, transmission mechanism of monetary policy; rules versus discretion in monetary policy and the issue of central bank independence.
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Details
Academic unit: Bond Business School Subject code: ECON13-305 Subject title: Money and Monetary Policy Subject level: Undergraduate Semester/Year: September 2018 Credit points: 10.000 -
Delivery & attendance
Timetable: https://bond.edu.au/timetable Delivery mode: Standard Workload items: - Lecture: x12 (Total hours: 24) - Weekly Lecture
- Tutorial: x12 (Total hours: 24) - Weekly Tutorial
- Personal Study Hours: x12 (Total hours: 72) - Study time and reviewing materials
Attendance and learning activities: Attendance at all class sessions is expected. Students are expected to notify the instructor of any absences with as much advance notice as possible. -
Resources
Prescribed resources: Books
- R. GLENN HUBBARD, ANTHONY PATRICK O'BRIEN (2014). Money, Banking, and the Financial System. 2nd, PEARSONS
iLearn@Bond & Email: iLearn@Bond is the online learning environment at Bond University and is used to provide access to subject materials, lecture recordings and detailed subject information regarding the subject curriculum, assessment and timing. Both iLearn and the Student Email facility are used to provide important subject notifications. Additionally, official correspondence from the University will be forwarded to students’ Bond email account and must be monitored by the student. To access these services, log on to the Student Portal from the Bond University website as www.bond.edu.au
Class recordings: The primary workload items for this subject will be recorded for the purpose of revision.
These recordings are not a substitute for attending classes. Students are encouraged to attend all sessions as there may be instances where a session is not recorded due to the presence of a guest speaker, the inclusion of sensitive or protected content, or technical issues. Students are advised not to rely solely on these recordings for revision.
See the Recording policy for further details.
| Academic unit: | Bond Business School |
|---|---|
| Subject code: | ECON13-305 |
| Subject title: | Money and Monetary Policy |
| Subject level: | Undergraduate |
| Semester/Year: | September 2018 |
| Credit points: | 10.000 |
| Timetable: | https://bond.edu.au/timetable |
|---|---|
| Delivery mode: | Standard |
| Workload items: |
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| Attendance and learning activities: | Attendance at all class sessions is expected. Students are expected to notify the instructor of any absences with as much advance notice as possible. |
| Prescribed resources: | Books
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|---|---|
| iLearn@Bond & Email: | iLearn@Bond is the online learning environment at Bond University and is used to provide access to subject materials, lecture recordings and detailed subject information regarding the subject curriculum, assessment and timing. Both iLearn and the Student Email facility are used to provide important subject notifications. Additionally, official correspondence from the University will be forwarded to students’ Bond email account and must be monitored by the student. To access these services, log on to the Student Portal from the Bond University website as www.bond.edu.au |
| Class recordings: | The primary workload items for this subject will be recorded for the purpose of revision. These recordings are not a substitute for attending classes. Students are encouraged to attend all sessions as there may be instances where a session is not recorded due to the presence of a guest speaker, the inclusion of sensitive or protected content, or technical issues. Students are advised not to rely solely on these recordings for revision. See the Recording policy for further details. |
Enrolment requirements
| Requisites: |
Pre-requisites:Co-requisites:There are no co-requisites |
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| Assumed knowledge: |
Assumed knowledge is the minimum level of knowledge of a subject area that students are assumed to have acquired through previous study. It is the responsibility of students to ensure they meet the assumed knowledge expectations of the subject. Students who do not possess this prior knowledge are strongly recommended against enrolling and do so at their own risk. No concessions will be made for students’ lack of prior knowledge.
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| Restrictions: |
Nil |
Assurance of learning
Assurance of Learning means that universities take responsibility for creating, monitoring and updating curriculum, teaching and assessment so that students graduate with the knowledge, skills and attributes they need for employability and/or further study.
At Bond University, we carefully develop subject and program outcomes to ensure that student learning in each subject contributes to the whole student experience. Students are encouraged to carefully read and consider subject and program outcomes as combined elements.
Program Learning Outcomes (PLOs)
Program Learning Outcomes provide a broad and measurable set of standards that incorporate a range of knowledge and skills that will be achieved on completion of the program. If you are undertaking this subject as part of a degree program, you should refer to the relevant degree program outcomes and graduate attributes as they relate to this subject.
Subject Learning Outcomes (SLOs)
On successful completion of this subject the learner will be able to:
- Our students will demonstrate knowledge toanalyse the monetary theory and the role and functions of central banks in the design and implementation of monetary policy for a specific countryunderstand the structure and operations of the Reserve Bank of Australia (RBA) and its monetary policy objectivesanalyse the empirical validity of monetary theory and be able to assess cross-country comparisons.[Attribute 1: Knowledge and Critical Thinking; Attribute 3: Communication Skills; Attribute 4: Global orientation]
- Our students will demonstrate understanding of contemporary issues in monetary theory and monetary policy with a focus on the cross-country differences in designing the monetary policy especially in view of the recent global financial crisis.[Attribute 1: Knowledge and Critical Thinking; Attribute 3: Communication Skills; Attribute 4: Global orientation; Attribute 5: Responsibility and Ethics; Attribute 6: Entrepreneurship]
- Our students will be able to complete a term paper on an assigned topic to review the literature, apply monetary theory to analyse the real life applications and suggest ways to improve current practices and finally present their findings. [Attribute 1: Knowledge and Critical Thinking; Attribute 3: Communication Skills; Attribute 4: Global orientation; Attribute 5: Responsibility and Ethics]
- Our students will be able to cooperate as a member and /or a leader in a functional team to discuss presentations by fellow students.[Attribute 1: Knowledge and Critical Thinking; Attribute 2: Leadership, Initiative and Teamwork; Attribute 3: Communication Skills; Attribute 5: Responsibility and Ethics]
- Students will demonstrate the ability to collect, analyse and organise information and ideas and convey those ideas clearly and fluently in written and oral forms.[Attribute 1: Knowledge and Critical Thinking; Attribute 3: Communication Skills; Attribute 6: Entrepreneurship]
- Our studetns will have the skills and confidences to discuss ethical issues related to contemporary issues in monetary policy in a global world. This could be achieved through guest lectures on important topics such as Global Financial Crisis, Islamic banking, etc. [Attribute 1: Knowledge and Critical Thinking; Attribute 2: Leadership, Initiative and Teamwork; Attribute 3: Communication Skills; Attribute 4: Global orientation; Attribute 5: Responsibility and Ethics]
Generative Artificial Intelligence in Assessment
The University acknowledges that Generative Artificial Intelligence (Gen-AI) tools are an important facet of contemporary life. Their use in assessment is considered in line with students’ development of the skills and knowledge which demonstrate learning outcomes and underpin study and career success. Instructions on the use of Gen-AI are given for each assessment task; it is your responsibility to adhere to these instructions.
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Assessment details
Type Task % Timing* Outcomes assessed Paper-based Examination (Closed) Final Examination 50% Final Examination Period 1,2,5,6 Paper-based Examination (Closed) Mid-semester Examination 25% Week 7 (Mid-Semester Examination Period) 1,2,5,6 Written Report Assignments (2) 10% Ongoing 1,2,6 Written Report Term Paper 10% Ongoing 1,2,3,4,5,6 Oral Pitch Seminar Presentations 5% Ongoing 1,2,3,4,5,6 - * Assessment timing is indicative of the week that the assessment is due or begins (where conducted over multiple weeks), and is based on the standard University academic calendar
- C = Students must reach a level of competency to successfully complete this assessment.
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Assessment criteria
Assessment criteria
High Distinction 85-100 Outstanding or exemplary performance in the following areas: interpretative ability; intellectual initiative in response to questions; mastery of the skills required by the subject, general levels of knowledge and analytic ability or clear thinking. Distinction 75-84 Usually awarded to students whose performance goes well beyond the minimum requirements set for tasks required in assessment, and who perform well in most of the above areas. Credit 65-74 Usually awarded to students whose performance is considered to go beyond the minimum requirements for work set for assessment. Assessable work is typically characterised by a strong performance in some of the capacities listed above. Pass 50-64 Usually awarded to students whose performance meets the requirements set for work provided for assessment. Fail 0-49 Usually awarded to students whose performance is not considered to meet the minimum requirements set for particular tasks. The fail grade may be a result of insufficient preparation, of inattention to assignment guidelines or lack of academic ability. A frequent cause of failure is lack of attention to subject or assignment guidelines. Quality assurance
For the purposes of quality assurance, Bond University conducts an evaluation process to measure and document student assessment as evidence of the extent to which program and subject learning outcomes are achieved. Some examples of student work will be retained for potential research and quality auditing purposes only. Any student work used will be treated confidentially and no student grades will be affected.
| Type | Task | % | Timing* | Outcomes assessed |
|---|---|---|---|---|
| Paper-based Examination (Closed) | Final Examination | 50% | Final Examination Period | 1,2,5,6 |
| Paper-based Examination (Closed) | Mid-semester Examination | 25% | Week 7 (Mid-Semester Examination Period) | 1,2,5,6 |
| Written Report | Assignments (2) | 10% | Ongoing | 1,2,6 |
| Written Report | Term Paper | 10% | Ongoing | 1,2,3,4,5,6 |
| Oral Pitch | Seminar Presentations | 5% | Ongoing | 1,2,3,4,5,6 |
- * Assessment timing is indicative of the week that the assessment is due or begins (where conducted over multiple weeks), and is based on the standard University academic calendar
- C = Students must reach a level of competency to successfully complete this assessment.
Assessment criteria
| High Distinction | 85-100 | Outstanding or exemplary performance in the following areas: interpretative ability; intellectual initiative in response to questions; mastery of the skills required by the subject, general levels of knowledge and analytic ability or clear thinking. |
|---|---|---|
| Distinction | 75-84 | Usually awarded to students whose performance goes well beyond the minimum requirements set for tasks required in assessment, and who perform well in most of the above areas. |
| Credit | 65-74 | Usually awarded to students whose performance is considered to go beyond the minimum requirements for work set for assessment. Assessable work is typically characterised by a strong performance in some of the capacities listed above. |
| Pass | 50-64 | Usually awarded to students whose performance meets the requirements set for work provided for assessment. |
| Fail | 0-49 | Usually awarded to students whose performance is not considered to meet the minimum requirements set for particular tasks. The fail grade may be a result of insufficient preparation, of inattention to assignment guidelines or lack of academic ability. A frequent cause of failure is lack of attention to subject or assignment guidelines. |
Quality assurance
For the purposes of quality assurance, Bond University conducts an evaluation process to measure and document student assessment as evidence of the extent to which program and subject learning outcomes are achieved. Some examples of student work will be retained for potential research and quality auditing purposes only. Any student work used will be treated confidentially and no student grades will be affected.
Study Information
Submission procedures
Students must check the iLearn@Bond subject site for detailed assessment information and submission procedures.
Policy on late submission and extensions
A late penalty will be applied to all overdue assessment tasks unless an extension is granted by the subject coordinator. The standard penalty will be 10% of marks awarded to that assessment per day late with no assessment to be accepted seven days after the due date. Where a student is granted an extension, the penalty of 10% per day late starts from the new due date.
Academic Integrity
University’s Academic Integrity Policy defines plagiarism as the act of misrepresenting as one’s own original work: another’s ideas, interpretations, words, or creative works; and/or one’s own previous ideas, interpretations, words, or creative work without acknowledging that it was used previously (i.e., self-plagiarism). The University considers the act of plagiarising to be a breach of the Student Conduct Code and, therefore, subject to the Discipline Regulations which provide for a range of penalties including the reduction of marks or grades, fines and suspension from the University.
Bond University utilises Originality Reporting software to inform academic integrity.Feedback on assessment
Feedback on assessment will be provided to students within two weeks of the assessment submission due date, as per the Assessment Policy.
Accessibility and Inclusion Support
If you have a disability, illness, injury or health condition that impacts your capacity to complete studies, exams or assessment tasks, it is important you let us know your special requirements, early in the semester. Students will need to make an application for support and submit it with recent, comprehensive documentation at an appointment with a Disability Officer. Students with a disability are encouraged to contact the Disability Office at the earliest possible time, to meet staff and learn about the services available to meet your specific needs. Please note that late notification or failure to disclose your disability can be to your disadvantage as the University cannot guarantee support under such circumstances.
Additional subject information
As part of the requirements for Business School quality accreditation, the Bond Business School employs an evaluation process to measure and document student assessment as evidence of the extent to which program and subject learning outcomes are achieved. Some examples of student work will be retained for potential research and quality auditing purposes only. Any student work used will be treated confidentially and no student grades will be affected.
Subject curriculum
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Introduction to Money and the Financial System
An overview of the money, banking and financial system in a typical open economy. These systems and their dynamics are explored using examples such as microlending, personal savings, and the financial crisis of 2007-09.
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Determining Interest Rates
Key factors in building an investment portfolio are examined. A demand and supply model is used to explain how the market interest rate for bonds is determined and the loanable funds model is applied to analyse the international capital market. Investor considerations of expected inflation and other investment decision factors are evaluated.
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The stock market, information and financial market efficiency
The basic operations of the stock market and stock price determination are introduced. The assumption of rational expectations and the efficient markets hypothesis are discussed in terms of the actual efficiency of financial markets. Fundamental concepts of behavioral finance are also considered using actual events and examples.
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The Market for Foreign Exchange
The foreign exchange market is explained and the difference between nominal and real exchange rates is considered. The determination of exchange rates in the short and long run is explained.
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The Economics of Banking
An overview of bank balance sheets is presented including a detailed analysis of T-accounts. The basic operations of a commercial bank are explored, with specific consideration of the risks involved in commercial banking and approaches to managing them.
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Financial crisis and financial regulations
This topic explores the connection between financial crises and financial regulation. The examination of actual historical financial crises provides realistic contexts to explore this connection and compare the characteristics and outcomes of these events.
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The Federal Reserve and Central Banking
An overview of the structure and operations of the Federal Reserve System. Key issues involved with central bank independence outside the United States are also specifically considered.
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The Federal Reserve’s Balance Sheet and The Money Supply Process
The relationship between the Fed’s balance sheet and the monetary base is considered and the equation for the simple deposit multiplier is derived and explained. A discussion of how the behaviour of banks and the non-bank public affect the money multiplier and describe the money supply process for M2.
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Monetary Policy
The goals of monetary policy are explained as well as how the Fed uses monetary policy tools to influence the federal funds rate. The role of monetary targeting in monetary policy and the relevance of different monetary policy tools over time are explored in detail.
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The International Financial System and Monetary Policy
The effects of the Fed’s interventions in foreign exchange markets on the U.S. monetary base and exchange rate are analyzed. The calculation of the balance of payments is explained and the evolution of exchange rate regimes is also discussed.
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Monetary Theory: The IS-MP Model
The IS curve and its derivation are explained. The significance of the MP curve and the Phillips curve is also considered. The IS–MP and IS-LM models are used to illustrate macroeconomic equilibrium. Alternative channels of monetary policy are also explored.