Institution: Columbia University
Start Date: March 26, 2018
The Columbia University is excited to launch a new free online course named as “Economics of Money and Banking”. This course is an attempt to begin the process of new economic thinking by reviving and updating some forgotten traditions in the monetary thought that have become newly relevant.
In this course, you will learn about the basic concepts and tools that you need to understand dollar money markets work just as well for understanding others, and dollar money markets are at the center of the larger global financial system. The course will start on March 26.
- Duration: 13 weeks
- Commitment: 5 hours/week
- Subject: Economics
- Institution: Columbia University
- Languages: English
- Price: Free
- Session: Starts on March 26
- Requirement: Upper-level undergraduate economics majors
- Certificate Available: Yes
Who Developed the Course:
Columbia University established in 1754, is a private Ivy League research university in Upper Manhattan. Columbia has been a leader in higher education in the nation and around the world.
- This course is designed originally for upper-level undergraduate economics majors at Barnard and Columbia, in New York City.
- People who work in banks or finance but have no background in economics or finance (IT folk, lawyers), graduate students in economics and also other social sciences (history, international political economy, anthropology.
Where Could This Lead You
After completing this course, you can apply for jobs in the given fields:
- Economics trainers
- IB Economics
Get Extra Benefits
If you pay $29 USD for this course,
- You will have to access to all of the features content you need to earn a course certificate.
- If you complete the course successfully, your electronic certificate will be added to your accomplishment page- from there, you can print your certificate or add it to your LinkedIn profile.
- Note that the course certificate does not represent official academic credit from the partner institute offering the course
How to Join This Course:
You can register yourself here
- WEEK 1: Introduction
The first two lectures paint a picture of the monetary system as the essential infrastructure of a decentralized market economy. The second lecture, “The Natural Hierarchy of Money”, is a kind of high-level overview of the entire course, so don’t expect to fully understand it until you look back after completing the rest of the course.
- WEEK 2: Introduction, continued
The next two lectures are meant to introduce a key analytical tool, the balance sheet approach to monetary economics, that course will be used repeatedly throughout the course.
- WEEK 3: Banking as a Clearing System
In the next four lectures, course build intuition by viewing banking as a payments system, in which every participant faces a daily settlement constraint (a survival constraint). From this point of view, the wholesale money market plays a key role by allowing banks to relax the discipline of a binding settlement constraint, delaying final payment by putting settlement off until a later date.
- WEEK 4: Banking as a Clearing System, continued
The next two lectures extend the payments system frame to non-banks by bringing in repo markets, and to the international monetary system by bringing in Eurodollar markets. Here, as in the previous two lectures, the emphasis is on the settlement, and so implicitly on so-called “funding liquidity”.
- WEEK 5: Banking as Market Making
“Market liquidity” is supplied by dealers who stand ready to absorb temporary imbalances in supply and demand by taking the imbalance onto their own balance sheets, for a price. From this point of view, banks can be considered a special kind of dealer, since they absorb imbalances in payment flows. The first lecture is meant to build intuition by using our familiar balance sheet method to make sense of how this all worked in a system much simpler than our own. The second lecture introduces a formal model of the economics of the dealer function, which course will be using throughout the rest of the course.
- WEEK 6: Banking as Market Making, continued
Here course adapt the Treynor model to banks, which course conceptualize as dealers in money, specifically term funding. Like Treynor’s security dealers, banks supply market liquidity for a price.
- WEEK 7: Midterm review and exam
The first twelve lectures have introduced all of the main concepts of the course. The midterm exam gives you a chance to test whether you have mastered these concepts before extending them into new areas in the second part of the course
- WEEK 8: International Money and Banking
The next four lectures extend the “money view” perspective to the larger world of multiple national monies by thinking about the international monetary system as a payment system, and by thinking of banks as market makers in foreign exchange. The first lecture is introductory and conceptual, while the second builds intuition by “translating” Mundell’s account of the development of the international monetary system into money view language (similar to what course did at the beginning of the course for Allyn Young’s account of the development of the US monetary system).
- WEEK 9: International Money and Banking, continued
The next two lectures use the Treynor model to understand how exchange rates are determined in dealer markets. In the second, course confronts directly the puzzle course observed earlier in the course, namely why uncovered interest parity (UIP) fails to hold in real-world markets.
- WEEK 10: Banking as Advance Clearing
The next four lectures extend the money view to the larger financial world of capital markets, where the price of risk is determined in dealer markets for swaps of various kinds. The first lecture is a kind of conceptual introduction, while the second translates the standard finance account of forwards and futures into money view terms, as the key building block for what comes after.
- WEEK 11: Banking as Advance Clearing, continued
In the modern economy, the price of risk is determined in swap markets that distinguish specific forms of risk, most importantly interest rate swaps, and credit default swaps. The Treynor model can be adapted to understand how the price of risk is formed in dealer markets.
- WEEK 12: Money in the Real World
In this final module, brings the entire course together. These two lectures build on everything that came before and shows how all the pieces fit together into a unified whole. Specifically, the first lecture uses the conceptual apparatus of the money view to making sense of shadow banking as the quintessential form of banking for the modern financially globalized world. And the second lecture shows how the conceptual apparatus of the money view fits with standard economics view and finance view, by drawing attention to dimensions of the world from which the standard views abstract.
- WEEK 13: Final Exam
The previous module operated in effect as a review of the entire course, so if you able to make sense of those lectures, you are ready for the final. But maybe you first want to have a look back at the second lecture, “The Natural Hierarchy of Money”, for a high-level summary of the essential concepts of the money view.
At the end of this course, you will be able to:
- Understand the basic concepts and tools for dollar money markets.
- Emerging new international monetary order.
Who Will You Learn With?
- Perry G Mehrling: Professor at Columbia University
- Importance of Course: At the end of this you will able to use analytical apparatus and theories that we use to understand that system.
- Importance of Certificate: You can get a verified certificate to highlight the knowledge and skills you gain. You can prove your success when applying for jobs or courses and display on your LinkedIn or CV.
For more information about the course, you may visit the Website.