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ECON-332: Money, Banking, and Finance in the Global Economy Prof. Martha Starr Department of Economics American University Fall 2008 Telephone: (202) 885-3747 Office: Roper Hall 201 Office hours: Tuesdays 11:15-2:15 pm, Fridays 11:15-2:15 pm Email: mstarr@ Please put “econ-332 money” in the subject line Class website: AU blackboard “[S]o much barbarism … still remains in the transactions of most civilized nations, that almost all independent countries choose to assert their nationality by having, to their own inconvenience and that of their neighbors, a peculiar currency of their own.” -- J.S. Mill, Principles of Political Economy, Book III, Chap. 10 (1848) Course description This class covers the economics of money, banking and capital markets in a globalizing world. Instead of the U.S.-oriented, “closed economy” approach taken in traditional money and banking classes, this class takes a globally-oriented, “open economy” approach better suited to present-day realities of money, banking, and capital markets. Part 1 of the class provides a basic overview of the economics of money, financial institutions, and financial markets and discusses the forces underlying financial globalization. Part 2 covers issues of national money and monetary policy: definitions of money, basics of central banking, and stabilization policy. Part 3 looks at international aspects of monetary policy, including exchange-rate regimes, innovative monetary arrangements (monetary unions, currency boards, dollarization), and competition among international currencies. Part 4 ex