ECO531 - MONETARY THEORY AND POLICY Chapter 1

ECO 531
MONETARY THEORY
AND
POLICY

Chapter 1
Introduction:
Overview of the Study on Money, Banking and
Financial Markets
Recommended Text
Mishkin, Frederic S, The Economics of Money, Banking and Financial
Market, 11th Edition, Pearson Addison- Wesley, 2015
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,TOPICS DISCUSSED


Why study money, banking and financial markets?




To examine the role of money in the economy.



To examine the link between money and business
cycles, money and inflation, money and interest rates


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, Why Study Financial Market

Financial markets
• Market in which funds are transferred from people
who have an excess of available funds to people
who have a shortage.
• Financial market, such as bond and stock markets,
are crucial to promote greater efficiency by
channeling funds from people who do not have a
productive use for them to those who do.
• Well-functioning financial markets are a key factor in
producing high economic growth, and poorly-
performing financial markets are one reason that
many countries in the world remain desperately poor.

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