COURSE SYLLABUS CRN 10358; FIN 6246 MONEY AND CAPITAL MARKETS SPRING 2014 DESCRIPTION: A survey of money and capital markets and the role they play in financial intermediation, capital formation, economic growth, monetary policy and business cycles. College: Division: Subject Area: Business Business Finance Course Number: FIN 6246 CRN: 10358 Credit Hours: 3 Time and Location: Wednesday evenings 6:30pm-9:15pm LH 2202 Semester Runs From January 6, 2014 to April 28, 2014 Prerequisites: FIN 5405 Instructor: E-mail: Phone: Dr. David M. Jones djones@fgcu.edu 239-590-7300 Office 239-472-5585 Home Office Location: Lutgert Hall 3301 COURSE DESCRIPTION: An advanced and comprehensive examination of macroeconomic policies, with particular emphasis on monetary policy and its role in maintaining sustainable economic growth and stable prices. Special attention will be devoted to the important role of money and capital markets in transmitting monetary policy and in business fixed capital formation. There will be an examination of monetary policy objectives instruments, techniques and basic approaches. Also analyzed will be factors influencing interest rates, the yield curve and real versus nominal interest rates. There will be an examination of asset price bubbles and financial crises and how central banks should respond in order to maintain orderly financial markets and minimize the impact of these events on spending and output. Students should emerge with a clear understanding of the important role of financial intermediation and efficient money and capital markets in allocating capital to its most productive uses. Also, there should be recognition of the importance of private savings funded capital investment required to boost productivity growth, thereby achieving an improving standard of living for most citizens.
GRADING, ATTENDANCE AND OTHER POLICIES: Requirements and Weighting: Class participation = 25 points Mid-Term = 25 points Final Exam = 50 points TOTAL Available = 100 points Grading Scale: 90-100 = A 80-89 = B 70-79 = C 69 or less = F Do not anticipate any scaling of the grades. You are expected to attend all classes. If the mid-term is missed, the weight will be added to the final exam. Failure to appear at the final without prior instructor notification will result in a grade of zero. Learning Objective Understanding the extremely important role of efficiently operating money and capital markets in supporting sustainable growth in aggregate demand and output. Analysis of roles of innovation and business-fixed investments as influences on business productivity and growth. Assessment Strategy Participation in class discussion, mid-term exam, final exam. Examining the critical role of money and capital markets and bank and nonbank financial intermediaries in the important process of the transmission of monetary policy and in maintaining stable and sustainable economic growth. Participation in class discussion, participation in team presentations, final exam. Analyzing the role of useful money and capital market signals such as the shape of the yield curve, stock prices and commodity prices in foreshadowing changes in economic growth and inflation. Analysis of asset price bubbles and the destabilizing impact on the financial system and the economy Participation in class discussion, participation in team presentations, mid-term exam, final exam. ADDITIONAL COURSE AND INSTRUCTOR INFORMATION This course will be organized around the following major topics: Macroeconomic Policies and Business Cycles; Financial Intermediation; Monetary Policy; Interest Rates and the Yield Curve; Inflation and Inflation Expectations; Market Liquidity; Financial Crises; Asset Price Bubbles; Financial Innovation; Globalization; Aggregate Demand and Supply Analysis.
REQUIRED COURSE MATERIALS: The class text is Fredrick S. Mishkin, The Economics of Money, Banking and Financial Markets; BUSINESS SCHOOL EDITION (Boston:Addison Wesley, July 2009) ISBN: 9780321599889 Dr. David M. Jones, Understanding Central Banking: The New Era of Activism; (M.E. Sharpe, Inc. 2014) ISBN: 9780765642516. HEREAFTER REFER TO AS UNDERSTANDING RECOMMENDED MATERIALS: Alan Greenspan, The Map and The Territory: Risk, Human Nature, and the Future of Forcasting; (The Penguin Press, 2013) ISBN: 9781594204814 Cameron M. Reinhart and Kenneth S. Rogoff, This Time is Different: 8 Centuries of Financial Folly, (Princeton University Press, 2009) ISBN 9780691142166 Andrew Ross Sorken, Too Big to Fail: How Wall Street and Washington fought to Save The Financial System and themselves; (Viking Press 2009) ISBN: 9780143118244 Academic Behavior Standards and Academic Dishonesty All students are expected to demonstrate honesty in their academic pursuits. The university policies regarding issues of honesty can be found in the FGCU Student Guidebook under the Student Code of Conduct and Policies and Procedures sections. All students are expected to study this document which outlines their responsibilities and consequences for violations of the policy. The FGCU Student Guidebook is available online at http://studentservices.fgcu.edu/judicialaffairs/new.html Disability Accommodations Services Florida Gulf Coast University, in accordance with the Americans with Disabilities Act and the university s guiding principles, will provide classroom and academic accommodations to students with documented disabilities. If you need to request an accommodation in this class due to a disability, or you suspect that your academic performance is affected by a disability, please contact the Office of Adaptive Services. The Office of Adaptive Services is located in Howard Hall 137. The phone number is 239-590-7956 or TTY 239-590-7930 Student Observance of Religious Holidays All students at Florida Gulf Coast University have a right to expect that the University will reasonably accommodate their religious observances, practices, and beliefs. Students, upon prior notification to their instructors, shall be excused from class or other scheduled academic activity to observe a religious holy day of their faith. Students shall be permitted a reasonable amount of time to make up the material or activities covered in their absence. Students shall not be penalized due to absence from class or other scheduled academic activity because of religious observances. Where practicable, major examinations, major assignments, and University ceremonies will not be scheduled on a major religious holy day. A student who is to be excused from class for a religious observance is not required to provide a second party certification of the reason for the absence.
FIN 6246 Money and Capital Markets Class Assignments and Readings Dr. David M. Jones Spring 2014 January 8 January 15 January 22 January 29 February 5 February 12 Introduction to Money and Capital Markets Text Chapters 1, 2 and 3 Introduction to Money and Capital Markets Handout Dr. David M. Jones Understanding Chapters 1 and 2 Financial Intermediation, Capital Formation, Productivity Shadow Banking System (Maturity Transformation) Text Chapters 8, 10, 12 and 13 Greenspan, Introduction, Chapter 8 Key Economic and Financial Terms Handout Financial Crises Dr. David M. Jones Understanding Chapter 6 Text Chapters 9 & 11 Reinhart and Rogoff, This Time Is Different Chapters 1, 13-17 Sorken Too Big To Fail Chapters 1-6 Monetary Policy Text Chapters 16, 17, & 18 Monetary Policy Handout Dr. David M. Jones Understanding Chapter 3 Monetary Policy (continued) Text Chapters 19 and 24 Dr. David M. Jones Understanding Chapter 8 Dr. David M. Jones Central Bank Watching and the Long-Run Effects of Unconventional Monetary Policies, CFA Institute Financial Analysts Seminar July 22, 2013 Mock FOMC meeting Interest Rates and the Yield Curve Text: Chapters 4, 5 & 6 Interest Rates and the Yield Curve Handout Inflation and Inflation Expectations Text Chapter 25 Fed Inflation Targeting Debate Handout Inflation and Inflation Expectations Handout February 19 Mid-Term Exam
February 26 Regulation and Supervision Liquidity and Capital Cushion Liquidity: Definition Sources and Signals Handout Risk Management Handout March 3-8 Spring Break, 2014 March 12 March 19 March 26 April 2 April 9 April 16 Asset Price Bubbles Dr. David M. Jones Understanding Chapter 7 Greenspan Chapter 1 Financial Innovation Text Chapter 12 & 14 Essay by Dr. David M. Jones and Kevin Pfleger Money, Power and Wallstreet PBS Frontline Globalization and the Outlook for the U.S. Dollar Text Chapters 20 and 21 Dr. David M. Jones Understanding Chapters 4 & 5 Globalization and the Outlook for the U.S. Dollar Handout Aggregate Demand and Supply Analysis Text Chapter 23 Aggregate Demand and Supply Analysis Handout Review and Catch up. April 23 Final Exam