經(jīng)濟(jì)學(xué)貨幣金融學(xué)英文Lecture1課件

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WhyMoneyandBanking?

MoneyandBankingisanexcitingfieldofgreatimportanceWhathappensinthebankingsystemandfinancialmarketcanaffectanation’soveralleconomyandpeople’sdailylifegreatlyinmanyways1-2GlobalFinancialCrisis

Sep15,2008:USfourthinvestmentbank–LehmanBrotherwentbankrupt

Jobloss–gohome

SADILY1-3GlobalFinanceCrisis

1-41-5“BlackMonday”–Oct6,20081-6JobLoss–Everywhere!40,000JobLossinWallStreetintheUS,tomakealiving,theyaredoingacrobaticsonthestreet.InUK,unemploymentrateraisestothehighestrecordof3.8%forthepastofnineyears.InAustralia,unemploymentclimbsto4.8%InRussia,1.7millionisnowunderunemployment1-7JobFairof2009–China1-8

FinancialCrisishascausedgreatconcerntothegovernmentsintheworld

---Headache!WhattoDO?

CChina’s4trillionyuantostimulateeconomy

US’s$780billionstimuluspackage

1-9GlobalFinancialCrisis5/29/2008:Thefifthinvestmentbank,BearStearns(貝爾斯登）wastakenbyJPMorgen.9/7/2008:TwoGovernmentSponsoredEnterprise,FennieMae(房利美）andFeddieMac

（房地美)wastakenoverbyUSgovernment.9/14/2008,MerrillLynch(美林）wasselltoBankofAmericawithUS$50billion9/15/2008:LehmanBrotherwentbankrupt9/17/2008:ThebiggestinsurancecompanyAIG(AmericanInternationalGroup)wastakenoverbyUSgovernmentandfilledwithUS$85billionofrescuefund.9/22/2008:MorganStanley(摩根斯坦利）andGoldmanSachs

（高盛）weretransformedtobebank-holdingcompanies.9/26/2008:FDIC(FederalDepositInsuranceCorporation)wastakeoverbythegovernment.10/6/2009:“BlackMonday”ofglobalstockmarkets10/7/2009:governmentsofmajoreconomiesstarttocutinterestratetoboosttheworldmarkets.Over160banksbecameinsolventintheUSbetween2008and2009.

1-10FacingFinancialCrisisFirstG-20LeadersSummitonFinancialMarketsandWorldEconomy,November14-15,2008,Washington,D.C.reachedacommonunderstandingoftherootcausesoftheglobalcrisis;reviewedactionscountrieshadtakenandwouldtakeinthefuturetoaddresstheimmediatecrisisandstrengthengrowth;agreedoncommonprinciplesforreformingtheirfinancialmarkets;launchedanactionplantoimplementthoseprinciplesandaskedministerstodevelopfurtherspecificrecommendationsthatwouldbereviewedbyleadersatasubsequentsummit;andreaffirmedtheircommitmenttofreemarketprinciples.[

1-11FacingFinancialCrisisSecondG-20Summit:April2,2009,LondonUS$500billionfortheIMFtoaidstrugglingeconomies,US$250billiontoboostworldtradeUS$250billionforanewIMFoverdraftfacility,US$100billiontoassistinternationaldevelopmentbanksinlendingtopoorcountries.ThenextG-20SummittookplaceonSeptember24–25,2009,

Pittsburgh,USaproposaltoradicallyreformtheInternationalMonetaryFundOneofthemajorannouncementsofthemeetingwasthatthegroupwillbecomethenewpermanentcouncilforinternationaleconomiccooperation.ThismeansthatthemuchlargerG-20meetingwillessentiallyreplacethesmallerG8,whichwillcontinuetomeetonmajorsecurityissuesbutwillcarryreducedinfluence

TheBattleagainstFinancialCrisisandEconomicRecessisstillinggoingoninmanycountries!1-12Whatcausedthefinancialcrisis?Whatisthetruereasonbehind?Whyoneeventinrealestatemarketscanleadtosuchahugemessonthefinancialmarketsallovertheworldandgoevenfurthertocauseaworldeconomyrecess?WhatwaswrongintheUSeconomyandglobalfinancialsystem?HowgreateffectwasthecrisistotheUSeconomyandothereconomies?Whereistheeventualwayout?1-13ObjectivesoftheCourse

UnderstandwhatisMoney?Itsmeaning,types,role,andimportanceProvidesufficientunderstandingoftheconceptofInterestRate–itstypes,behavior,role,andimportanceintheeconomyExposestudentstowidevarietyof

FinancialMarkets–theirtypes,functions,roleandimportanceSoundunderstandingofthetoolsof

MonetaryPolicy,itsdeterminants,conduct,andimportanceStudyDemandforMoney,Money&Inflation,Monetaristvs.Keynesianviewsontheseissues1-14

CourseOutline

RequiredText:Mishkin,F.S.(2006).TheEconomicsofMoney,BankingandFinancialMarkets(8thed.)

Approach:80%ofthetimeexplainthetopicsoftheday,20%time,openfordiscussion&classparticipation

Assessment:FinalExam:70%;Tutorials&Classparticipation30%

1-15AbouttheAuthorFredericS.MishkinistheAlfredLernerProfessorofBankingandFinancialInstitutionsattheGraduateSchoolofBusiness,ColumbiaUniversity.SincereceivinghisPh.D.fromtheMassachusettsInstituteofTechnologyin1976,hehastaughtattheUniversityofChicago,NorthwesternUniversity,PrincetonUniversityandColumbia.HehasalsoreceivedanhonoraryprofessorshipfromtheRenminUniversityofChina.HisresearchfocusesonmonetarypolicyanditsimpactonfinancialmarketsandtheaggregateeconomyHehaspublishedover150papersinjournalsasAmericanEconomicReview,JournalofPoliticalEconomy,Econometrica,QuarterlyJournalofEconomics,JournalofFinance,JournalofMonetaryEconomics.1-16SyllabusPartIIntroduction1.Whystudymoney,banking,andfinancialmarkets?2.AnoverviewoftheFinancialsystem3.Whatismoney?PartIIFinancialMarkets4.Understandinginterestrates5.Behaviorofinterestrate6.RiskandtermstructureofinterestratesPartIIIFinancialInstitutions9.Bankingfirmandmanagementoffinancialinstitutions10.Bankingindustry:structureandcompetition11.Economicanalysisofbankingregulation1-17PartIVCentralBankingandConductofMonetaryPolicy14.Structureofcentralbanksandfederalreservesystem(ReadingOnly)15.MultipleDepositCreationandMoneysupplyprocess16.Determinantsofmoneysupply17.ToolsofMonetaryPolicy18.ConductofMonetarypolicy:GoalsandTargets(ReadingOnly)PartVIMonetaryTheory22.Demandformoney23.KeynesianFrameworkandIS-LMModel25.AggregateDemandandAggregateSupplyModel1-18Sources/mishkinformoreinformationofthebook/faculty/fmishkin/

formoreaboutFredericS.MishkinTolookfordata,goto

/econresdata/default.htmEmail

:moneybank.swufe@

Pin:moneybank

Chapter1WhyStudyMoney,Banking,andFinancialMarkets?1-20FinancialSystemInthisCoursewewillstudyhowFinancialMarkets&Institutionsworkandwillexploretheroleofmoneyintheeconomy

FinancialMarkets:BondMarketStockMarketForeignExchangeMarketOtherMarketsFinancialInstitutions:CharteredBanksTrust&MortgageCompaniesCreditUnionsInsuranceCompaniesMutualFundCompaniesOtherCompanies1-21FunctionsofFinancialSystem1-22WhyFinancialMarkets?

FinancialMarketshelpintransferringfundsfrompeoplewithexcessfundstopeoplewithproductiveuseandideasbuthaveashortageoffunds.Theyhavesignificantimpactonourdailylifeastheyareinvolvedinhugeflowoffundinoureconomy.FinancialmarketswillaffectEfficiencyofeconomybyreallocatingthefinancialresourcesBusinessprofitsEconomicwellbeingofothercountries1-23WellfunctioningFinancialMarketsareakeyfactorinproducinghigheconomicgrowth

PoormanagementofFinancialMarketsisonereasonthatmanycountriesremaindesperatelypoorFinancialmarketactivitiesalsohavedirecteffectsonpersonalwealththebehaviorofbusinessandconsumerscyclicalperformanceoftheeconomy1-241stMarket:BondMarket

A‘Security’ora‘FinancialInstrument’isaclaimonissuer’sfutureincomeorasset(e.g.anyfinancialclaimorpieceofpropertyowned)ABondisadebtsecurity–apromisetomakepaymentsperiodicallyforaspecificperiodoftimeBondMarketistypicallyimportantforeconomicactivity.ItenablescorporationsandgovernmentstoborrowtofinancetheiractivitiesItistheBondMarketwhereInterestRatesaredetermined1-25WhatisInterestRates?Itisthecostofborrowingorthepricepaidfortherentaloffunds.Therearenumberofdifferentinterestrates(e.g.mortgageinterestrate,carloanrates,houseloanrates,andbondrates)

Changesininterestrateshaveimportanteffectsonindividuals,financialinstitutions,businesses,andtheoveralleconomy.HighinterestratediscouragesconsumptionButencouragessavingsCaninfluencebusinessdecisionsonsamegroundsandthusretardeconomicactivity,affectemploymentandsoonandforth

1-26AfurtherlookatBondMarketwillbeinChapter2,4,5,61-272ndMarket:StockMarket

AplacewherestocksaretradedWhatisastock?AshareofownershipinacorporationItisaclaimontheearnings&assetsofthecorporationItisawaytofinancecorporation’sactivities

1-28ThestockmarketisthemostwidelyfollowedfinancialmarketinalmosteverynationItisaplacewherepeoplecangetrichorpoorquickly.on“BlackMonday,"Oct19,1987,DowJonesfellby22%.withthecollapseoftheinternetbubblein2000,thestockmarketdroppedbyover30%andsomestocksdroppedmorethan90%bylate2002.OnOct6,2008,DowJonesfellby800pointtothelevelofbelow10,000Thesefluctuationsinstockpricesaffectpeople’swealthandcaneffecttheirwillingnesstospendThestockmarketisanimportantfactorinbusinessinvestmentdecisions,becausethepriceofsharesaffectstheamountoffundsthatcanberaisedbysellingnewlyissuedstock(IPO)tofinanceinvestmentspending1-29USStockMarket:1950-20051-301-31ChinaStockMarket:1992-2008WeshallfollowupissuesonstockmarketinChapter2&7

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3rd

Market:ForeignExchangeMarketThismarketisusedtotransferfundsfromonecountrytoanotherItisimportantbecauseitistheplacewhereexchangerate–priceofonecurrencyintermsoftheother–isdeterminedItisrelativepriceoftwocurrencyandthereforecanbequotedintwoways(e.g.RMB￥/US$orUS$/RMB￥)FluctuationsinexchangeratehavedirectimplicationsforaneconomyAppreciatedRMBisgoodforimportsbutnotsogoodforexports

StrongRMBbenefitconsumersbutexportsbecomemoreexpensiveforforeigners1-331-34WhyBankingandFinancialInstitutions?Financialsystemiscomplexandcompriseofmanydifferenttypesofprivatesectorfinancialinstitutions

FinancialIntermediaries—institutionsthatborrowfundsfrompeoplewhohavesavedandmakeloanstootherpeopleBanks—

institutionsthatacceptdepositsandmakeloansOtherFinancialInstitutions—insurancecompanies,financecompanies,pensionfunds,mutualfundsandinvestmentbanksFinancialInnovation—inparticular,theadventoftheinformationageande-finance1-35Chapter9:HowbanksandotherfinancialinstitutionmanagetheirassetsandliabilitiesChapter10:LookatbankingindustryChapter11:Understandwhybankregulationtakestheformitdoesandwhatcangowrongintheregulatoryprocess1-36WhyStudyMoneyandMonetaryPolicy?

Money,alsoreferredasMoneysupply,isdefinedasanythingthatisgenerallyacceptedinpaymentofgoodsandservices.MoneyislinkedtothechangesineconomicvariablesthatarekeytothehealthoftheeconomyMoneyandBusinessCycleEvidencesuggeststhatmoneyplaysanimportantroleingeneratingbusinesscycles(recession,trough,expansionandpeak)Recessions(unemployment)andbooms(inflation)affectallofusMonetaryTheorytieschangesinthemoneysupplytochangesinaggregateeconomicactivityandthepricelevel1-37ShadedareasrepresentrecessionsTherateofmoneygrowthhasdeclinedbeforeeveryrecession,indicatingthatchangesinmoneymightbeadrivingforcebehindBusinesscyclefluctuations1-38MoneyandInflationWhatisInflation?ItistherateatwhichpricelevelchangesinaneconomyoveraspecificperiodoftimeItaffectsindividuals,businesses,andgovernment–thusregardedasanimportantproblemtobesolved1-39Pricelevelandmoneysupplygenerallymovetogether

1-40Datashowsaconnectionbetweenthemoneysupplyandthepricelevelfrom1950to2005,thepricelevelhasincreasedmorethansixfoldthepricelevelandthemoneysupplygenerallyrisetogether.Inflationisusuallycausedbycontinuedincreaseinmoneysupply–toomuchmoneychasingtoofewgoodsMiltonFriedman,aNobelLaureate:inflationisalwaysandeverywhereamonetaryphenomenon."1-41MoneyGrowthandInflation:FurtherEvidenceAnecdotalevidenceshowthatCountrieswithhighgrowthofmoneysupplyhaveexperiencedhighinflationrates(1992-2004)1-42MoneyandInterestRatesInadditiontootherfactors,moneyplaysanimportantroleininterest-ratefluctuationsInterestratesarethepriceofmoneyPriorto1980,therateofmoneygrowthandtheinterestrateonlong-termTreasurybondswerecloselytiedSincethen,therelationshipislessclearbutstillanimportantdeterminantofinterestrates1-431-44MoneyandMonetaryPolicyWhatisMonetaryPolicy?ItisthemanagementofmoneyandinterestratesCentralBankisthemainresponsibleauthoritytomanagemonetarypolicyMoneyaffectalmostalltheeconomicvariablesItisamatterofconcernforpoliticianandpolicymakersthroughouttheworld1-45MonetaryPolicyMonetarypolicyisthemanagementofthemoneysupplyandinterestratesCentralbankisresponsibleforanation’smonetarypolicy

ConductedintheUSbytheFederalReserveBankConductedinChinabythePeople’sBankofChina1-46HowWeWillStudyMoney,Banking,andFinancialMarketsAsimplifiedapproachtothedemand

forassetsTheconceptofequilibriumBasicsupplyanddemandtoexplainbehaviorinfinancialmarketsThesearchfor