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Description of Individual Course Units| Course Unit Code | Course Unit Title | Type of Course Unit | Year of Study | Semester | Number of ECTS Credits | | UT407B.8 | Monetary Theory and Policy | Elective | 4 | 7 | 5 |
| | Level of Course Unit | | First Cycle | | Objectives of the Course | | The course aims to provide the students with a general knowledge on monetary theory and policy. Especially financial institutions, central banking, money supply and demand, interest theory and monetary policy. | | Name of Lecturer(s) | | Doç. Dr. Yılmaz Onur ARİ | | Learning Outcomes | | 1 | Gain information fundamental conceptions, process and methods about money market, monetary theory and policy. | | 2 | Understand that the logic of money markets, the description of money supply and its determinants, money demands theories, the aims and instruments of monetary policy and fiscal policies. | | 3 | Determine the money supply by the aid of balance sheets of CB and dep.banks, the money multiplication, money demand and interest rates, the using of mon. pol. Instr., monetary transm. mech. and money and fiscal policy appl.. | | 4 | Analyses the interaction mechanisms between financial sector and real sector by using technics which learned in monetary theory and policy courses and macroeconomics especially for Turkish economy and other economies. | | 5 | Attain the results that they are able to use by institutions that they implement economic stabilisation measures and monetary policy. |
| | Mode of Delivery | | Normal Education | | Prerequisites and co-requisities | | None | | Recommended Optional Programme Components | | None | | Course Contents | | Introduction: Why study money? What is money? Definitions of money and its functions. The financial system: Financial markets; its structure, tools and functions, financial institutions. Financial sector in Turkey: The central bank; commercial banks; investment and development banks; nonbank institutions : insurance companies, credit cooperatives, mutual funds and investment trusts. Money supply: The definitions of money supply and the role of central banking; multiple deposit creation and money supply process; determinations of the money supply model and the money multiplier; factors that determine the money multiplier. The demand for money : Quantity Theory of Money: velocity of money and equation of exchange (Irving Fisher's approach) ; Cambridge approach to money demand; Keynes's Liquidity Preference Theory; Friedman's Modern Quantity Theory; Neo Keynesian money demand theories; empirical evidence on the demand for money.Interest theory. Monetary policy: The general structure of monetary policy: Goals of monetary policy; tools of monetary Policy: Required reserve ratio, discount policy, open market operations, interest rate, selective credit control and moral suasion. Monetary policy Strategy: The role nominal anchor; exchange-rate targeting; monetary targeting; inflation targeting; monetary policy application in Turkey. Monetary and fiscal policy in IS-LM curves: Real and monetary compartment in economy; factors that IS and LM curves to shift. Monetary crises. | | Weekly Detailed Course Contents | |
| 1 | Meaning, features and occuring and kinds of money | | | | 2 | Functions of money and definition of money suply | | | | 3 | Functions of financial markets, basic structure and instruments of financial markets | | | | 4 | Functions of financial intermediation, mainly financial institutions and financial institutions in Turkey | | | | 5 | Cental Bank of Republic of Turkey, commercial banks, İstanbul Stock Exchange Market, bankers and other financial institutions. | | | | 6 | Definition of money suply and the role of central bank (theoretical definition of money suply and CBRT definition of money suply | | | | 7 | Process of money suply (deposits, loan, and money multipliers) | | | | 8 | Mid-term exam | | | | 9 | Theories of the demand for money (Neo-classical Quantity Theory : Fisher approach and Cambridge approach) | | | | 10 | Modern quantity theory (Chicago approach of Neo-classical school) and Keynesian money demand theory | | | | 11 | Basic structure, goals and instruments of monetary policy | | | | 12 | Strategies of monetary policy (exchange rate targeting, monetary targeting, inflation targeting) | | | | 13 | The applications of monetary policies in Turkey since 1923 | | | | 14 | Monetary and fiscal policies, real and nominal sectors and IS-LM analysis, inefficiency of moneary and fiscal policies (crowding out) | | | | 15 | Macroeconomic general balance analysis: according to different economic schools transmitions mechanism (general balance analysis in Keynesian and Classical systems) | | | | 16 | End-of-term exam | | |
| | Recommended or Required Reading | | Özyurt, H., 2006; Para Teori ve Politikası, Derya Kitabevi, Trabzon
Keyder, N. 2002; para Teori-Politika-Uygulama, Seçkin Yayıncılık ve Dağıtım, Ankara | | Planned Learning Activities and Teaching Methods | | | Assessment Methods and Criteria | |
| Midterm Examination | 1 | 100 | | SUM | 100 | |
| Final Examination | 1 | 100 | | SUM | 100 | | Term (or Year) Learning Activities | 40 | | End Of Term (or Year) Learning Activities | 60 | | SUM | 100 |
| | Language of Instruction | | Turkish | | Work Placement(s) | | None |
| | Workload Calculation | |
| Midterm Examination | 1 | 1 | 1 | | Final Examination | 1 | 1 | 1 | | Attending Lectures | 14 | 3 | 42 | | Individual Study for Mid term Examination | 14 | 3 | 42 | | Individual Study for Final Examination | 1 | 25 | 25 | | Homework | 1 | 35 | 35 | |
| Contribution of Learning Outcomes to Programme Outcomes | | LO1 | 4 | 4 | 3 | 4 | 5 | 5 | 3 | 3 | 5 | 3 | | LO2 | 3 | 3 | 4 | 4 | 2 | 4 | 4 | 3 | 3 | 4 | | LO3 | 3 | 5 | 3 | 3 | 3 | 4 | 3 | 4 | 4 | 2 | | LO4 | 4 | 4 | 4 | 3 | 5 | 5 | 4 | 2 | 3 | 4 | | LO5 | 4 | 3 | 4 | 2 | 4 | 5 | 2 | 3 | 4 | 5 |
| | * Contribution Level : 1 Very low 2 Low 3 Medium 4 High 5 Very High |
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