Money and Banking
Economics 221
Fall 2008

Instructor: Jean Shackelford (jshackel@bucknell.edu)
Office Hours: Coleman 165 , Th - 11-12; W - 9:30 -12). Others by appointment.
Required TEXTS:

ECON 221 ELECTRONIC RESERVES
ECON 221 SPECIAL PROJECTS

Hollywood Stock Exchange Portfolio Assignment
221 Portfolio Project Resources Guide
New Yorker Review of RRWS
FYI - links to financial literacy quizes

ASSIGNMENTS: September | October| November | December

Introduction--Money and the Financial System
August 28 - Introduction to the course--goals, objectives, assignments, grading,
Portfolio Assignment (part 1)
Sept. 2 - Chapters 1 & 2 - Money and the Financial System--Mostly Money
BBElectronic Reserves (The Big Freeze: Part 1, 2, & 3. The Financial Times 8.4, 8.5 & 8.6)

Financial Institutions, Markets, and Interest Rates
Sept. 4 - Chapter 3 - Overview of the Financial System
Sept. 9 - Chapter 3 (including appendix) and Chapter 4 -Interest Rates - to page 70
Sept. 11 - Finish Chapter 4, A Random Walk Down Wall Street (Part 1)
Sept. 16 - A Random Walk Down Wall Street (Part 2)
Sept. 18 - Continuing to walk randomly with Part 2 and Portfolio Assignment (part 2)
Sept. 23 - Portfolio Allocation Theory A Random Walk Down Wall Street (Part 3)
Sept. 25 - Chapter 6 - Determining Market Interest Rates
Sept. 30 - Chapter 7 - The Risk Structure of Interest Rates and The Term Structure of Interest Rates

October 2 - Examination 1

Financial Markets and Financial Institutions
Oct. 7 - History of Foreign Exchange & Chapter 22 - The International Monetary System and Monetary Policy (pp 513-533 - no graphs [yet])
Oct. 9 - Chapter 8 - Foreign Exchange Market and Exchange Rates

October 11 - 14 - Fall Break

Oct. 16 - Chapter 8 - Foreign Exchange Market and Exchange Rates (continued)(Assgnment)
Oct. 21 - Chapter 9 - Derivatves (Assignment)
Oct. 23 - Chapter 11- Reducing Transactions and Information Costs
Oct. 28 - Chapter 12 - What Do Financial Institutions Do?
Oct. 30 - Chapter 13 - The Business of Banking
Nov. 4 - Chapter 14 - The Banking Industry
Nov. 6 - Chapter 15 - Banking Regulation and Regulation Assignment

November 11 - Examination 2

The Money Supply Process and Monetary Policy
Nov. 13 - Chapter 16 - Banking in the International Economy
Nov. 18 - Chapter 17- The Money Supply Process and The Money Supply Multiplier
Tools and Targets of Federal Reserve Policy
Nov. 20 - Chapter 18 - The Monetary Base; Chapter 19 - Organization of the Federal Reserve System
Nov. 25 - Chapter 20 - Tools of the Fed: OMO, DR and RR

Thanksgiving Break - November 26 - 30

Dec. 2 - Chapter 21 - Conducting Monetary Policy: Goals and Targets
Dec. 4 - Chapter 27 - Information Problems and Channels for Monetary Policy
Dec. 9 - Chapter 27 - Information Problems and Channels for Monetary Policy (continued)
(Hand in Portfolio Project. Hand in your 221 Journal for the final time.)

Final Examination - TBA

Class Preparation:

Class periods will be devoted to presentation and informal discussion of the assigned readings and occasional projects.

Evaluation:

The following criteria will be used for course evaluation:

 Class Participation/Attendance 15 percent
 Portfolio Project (all phases) 20 percent
 Journal 10 percent
 Other Writing Assignments 5 percent
 Examinations (2 + final) 50 percent (12.5 + 12.5 + 25 =50)
 Total 100 percent

Class Discussion/Participation: (15%)

Includes daily preparation of assigned materials and reflection about material in reading assignments and participation in class discussions. (Make sure that you are have scanned the Financial Times,Wall Street Journal,or the New York Timesfor relevant articles.) You must be present in class to participate (see below for attendance expectations.)

Written Assignments: (35 percent)

Journal (10%)
Please keep a journal in which you write about the financial events which occur during the semester. Occasionally you will be asked to prepare a short written answer about an assigned topic--or to write a summary of a web-based project. Your journal entries should demonstrate all aspects of the writing process, including: thinking through the issues presented, stating or summarizing the issue clearly and revising if necessary. Please hand in your journal three times during the semester, including the last day of class (That's the third time). Please space the timing in which you hand in your journal. Do not hand in your journal in fewer than three week intervals.
 
Portfolio Assignments (20%)
Early in the semester you will be asked to select a financial portfolio which you will track through the semester. You will not only to watch and record the performance of your portfolio, but indicate individual economic or political factors might be responsible for changes in the price of each asset during the course of the semester.

Other Writing Assignments (5%)

Examinations: (50%)

There will be three examinations during the course of the semester, including a comprehensive final examination.

If you would like to discuss your written work or class participation, please feel free to stop in my office, (Coleman 165) to discuss your progress.


CLASS POLICIES

Attendance. (standards for your class participation grade) Please arrange your appointments for job interviews or participation in sports events at other times than class meetings. Since participation is a large part of evaluation, class absences will be reflected in your grade for the course.

In addition to the above, you may use the following as an attendance guide which will be part of my assessing "Class Discussion":

4.0 Perfect attendance. Always well prepared and contributes actively in most classes.
3.0 90% attendance. Almost always well prepared and usually contributes actively.
2.0 80% attendance. Usually prepared and contributes actively to about half of the classes.
1.0 At least 50% attendance. Only prepared about half of the time. Contributes actively about 20 % of the time.
0.0 Attends occasionally. Poor preparation.

Academic Responsibility. Students in this course, as in all others, will be held to the highest standards of academic responsibility. Bucknell has a clearly published policy on academic responsibility, which can be found in the section on regulations in your Student Handbook, in the Catalog, and on the web:

"Bucknell students are responsible for the preparation and presentation of work representing their own efforts. Acceptance of this responsibility is essential to the educational process and must be considered as an expression of mutual trust, the foundation upon which creative scholarship rests. Students are directed to use great care when preparing all written work and to acknowledge fully the source of all ideas and language other than their own." (Bucknell Catalog, 2001-02, p. 284).

Rules. If you engage in any computer communications (including subscribing to these papers, you are bound by the Policy for Acceptable Usage of Computing Resources at Bucknell.

If you do use an electronic resource, make sure that you record the correct URL in your journal entry. I have given you the URL's for the New York Times and the Washington Post. Reading these documents "on line" doesn't replace your "hard copy" subscription. You will quickly see that not all of the NYT's is on line. A note of caution. Currently on-line subscriptions to the New York Times electronic journal is free. You must however read an agreement before you are allowed to subscribe. If you agree to the conditions set forward by the publication you will be allowed to subscribe. There are responsibilities incurred by subscribing. Make sure that you remember your passwords and that you logoff if you choose to cancel your subscription.

From time to time I may ask you to check out current economic statistics a number of which are linked on the Economic Resources page. There are several good collections of economic data. One reference is the New York Times Business Links (stockmarkets) Another is the Economics Press Briefing Room at the White House

Class Etiquette. Please make sure that you leave your dorm room early enough to arrive in class on time. Also, make sure that you are prepared to remain in class for the full period. The class is disruped by latecommers and wanderers. (Certainly, if you find yourself in the middle of a coughing fit, please feel free to go get a drink of water, otherwise, please wait until class is over.)

Make sure that your cell phone is turned off when you enter the classroom.

Other things you should know about the course and readings.