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◄Faculty of Business and Economics►

AA017018 MONETARY ECONOMICS
3 Credits

Course Learning At the end of this course, students are able to:
Outcomes
(1) Demonstrate a thorough understanding of the role of
money and how money affects the general equilibrium
behavior of the economy.
(2) Interprets the role of credit frictions in the business
cycle and the transmission of monetary policy.
(3) Relates monetary policy trade-offs, the design of
monetary policy, and the optimal policy implied by New
Keynesian models.

Synopsis of Course This course discusses how money affects the general
Contents equilibrium behavior of the economy and how nominal
prices, inflation, money and interest rates are linked. Major
emphasis is placed on the money-in-the utility function,
integrating money into general equilibrium frameworks. It
examines a neoclassical growth framework, public finance
issues, Lucas’s misperceptions model, credit market
imperfections, strategic models of monetary policy and
explores the policy impilcations in new Keynesian models.

Assessment Weightage Continuous Assessment: 50%
Final Examination: 50%

Medium of Instruction English

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