Money/Banking:Emerging Mkts

3 Credits · Level: Graduate, Juris Doctor, Undergraduate

This seminar discusses the building blocks and the implementation of modern monetary policy, the nature and dynamics of financial crises, and the fundamentals of financial stability in emerging market economies. Specifically, the seminar examines the institutional underpinnings as well as the formulation and execution of monetary policy in these economies. It analyzes how monetary policy works under different policy regimes, with an emphasis on inflation targeting, the role of central bank independence, and how cross-border capital flows influence the effectiveness of monetary policy. The seminar also focuses on financial stability, in particular of banks, since they help monetary policy work, but can also become a source of macroeconomic turbulence. The course examines the vulnerabilities to which banks are exposed and studies a variety of financial crises and how they unfolded in emerging market economies. The last part of the seminar focuses on discussing the principles and operational aspects of macroprudential policy, considered the new standard for preventing systemic financial crises. The seminar is designed for upper-level undergraduates and graduate students. At the end of the seminar, students are expected to understand how central banks make monetary policy decisions in emerging market economies and how they affect the real sector of the economy. They will also understand the roots, dynamics, and consequences of financial crises, and the efforts deployed today by countries to avoid a new major crisis. The seminar will be based on lectures, but will also demand participation from students who will be required to present case studies. Students attending the seminar are expected to be familiar with basic macro-financial concepts. Classes will be based primarily on papers and book chapters, so no specific textbook is required. However, some books could help in providing background for some of the topics discussed in the seminar. See for example: - Frederic S. Mishkin: “The Economics of Money, Banking, and Financial Markets,” Eleventh edition, Pearson (2016).