COURSE SYLLABUS CRN 11119; FIN 6246 MONEY AND CAPITAL MARKETS SPRING 2017 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: Business Division: Business Subject Area: Finance Course Number: FIN 6246 CRN: 11119 Credit Hours: 3 Time and Location: Wednesday evenings 5:30pm-8:15pm LH 4201 Semester Runs From January 11, 2017 to May 5, 2017 Prerequisites: FIN 5405 Instructor: E-mail: Phone: Dr. David M. Jones lsnook@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 analysis 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 generating sufficient domestic savings to fund necessary business capital spending and encourage increased new business formation and innovation required, in turn, to boost productivity growth, a key factor in achieving an improving standard of living.
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 Macroeconomic the analysis extremely of business important cycles, role of efficiently finance, innovation, operating productivity, money and capital investment, markets in supporting growth, inflation, sustainable monetary growth and fiscal in policies aggregate and demand financial and crises. output. Analysis of roles of innovation and business-fixed investments as influences on business productivity and growth. Assessment Strategy Improving student communication and analytical skills, participation in team presentations, class participation, 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, allocating capital to its most productive uses, and in maintaining sustainable economic growth. Participation in class discussion, participation in team presentations, midterm exam, 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, Fiscal Policy.
REQUIRED COURSE MATERIALS: The class text is Fredrick S. Mishkin, The Economics of Money, Banking and Financial Markets; Buisness School 3 rd Edition (Boston: Addison Wesley, 2013) ISBN: 9780132770248 Dr. David M. Jones, Understanding Central Banking: The New Era of Activism; (Routledge 2014) ISBN: 9780765642516. HEREAFTER REFER TO AS UNDERSTANDING RECOMMENDED MATERIALS: Ben S. Bernanke, The Courage to Act: A Memoir of a Crisis and Its Aftermath; (New York: W.W. Norton & Company, 2015) ISBN 978039247213 Mohamed A. El-Erian, The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse; (New York; Random House, 2016) ISBN 978-0-8129-9762-0 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 2017 January 11 January 18 January 25 February 1 February 8 February 15 Introduction to Money and Capital Markets Text Chapters 1, 2 and 3 Introduction to Money and Capital Markets Study Paper Dr. David M. Jones Understanding Chapters 1 and 2 Dr. David M. Jones A Note on Contemporary Macroeconomic Policies Challenge Magazine, November December 2014 Shadow Banking System (Maturity Transformation) Text Chapters 8 and 10 Key Economic and Financial Terms Study Paper Dr. David M. Jones Understanding Chapter 6 Financial Crises Ben Bernanke, The Courage to Act Chapter 2, 7-10 Andrew Ross Sorken, Too Big To Fail Chapters 1-6 Monetary Policy Text Chapters 16 & 18 Monetary Policy Study Paper Dr. David M. Jones Understanding Chapter 3 Dr. David M. Jones Forward Guidance: An Unconventional Policy Weapon Dr. David M. Jones The Bank of Japan s Unfavorable Experience with Negative Interest Rates Monetary Policy (continued) Text Chapter 19 Dr. David M. Jones Understanding Chapter 8 Dr. David M. Jones Central Bank Watching: The Effect of Diverging Policies, CFA Institute, July 18, 2016 Interest Rates and the Yield Curve Text: Chapters 4, 5 & 6 Interest Rates and the Yield Curve Study Paper Inflation and Inflation Expectations Text Chapter 25 Fed Inflation Targeting Debate Study Paper Inflation and Inflation Expectations Study Paper February 22 Mid-Term Exam (Students bring a blue book to the exam)
March 1 Regulation and Supervision Liquidity and Capital Cushion Liquidity: Definition Sources and Signals Study Paper Risk Management Study Paper March 6-11 Spring Break, 2017 March 15 March 22 March 29 April 5 April 12 April 19 April 26 May 3 Asset Price Bubbles Dr. David M. Jones Understanding Chapter 7 Pure Gold Standard (1815 1914) vs. Gold Exchange Standard of the Bretton Woods Agreement (1944 1971). Financial Innovation Text Chapter 12 & 14 Securitization, derivatives, electronic trading, automated trading programs Dr. David M. Jones, Modern Macroeconomic Policy Debate: First the Basics Mohamed El-Erian, The Only Game in Town Chapters 5-12, 19-29. Money, Power and Wallstreet PBS Frontline Andrew Ross Sorken Too Big To Fail Chapters 11-13. 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 Study Paper Aggregate Demand and Supply Analysis Text Chapter 23 Aggregate Demand and Supply Analysis Study Paper Review Final Exam (Students bring a blue book to the exam) Finals begin May 1, 2017 and end May 5, 2017 DOUBLE CHECK THIS DATE FOR 2017 TO BE ANNOUNCED