The banking system and money command a special role in any economy. This course provides students with an overview of the nature of financial institutions and markets in the United States, with special emphasis on the banking system and its role in the economy. The course also provides the basics of monetary theory and monetary policy. Students learn about the nature of money and its relationship to interest rates. They then learn how the central bank manages the money supply and interest rates to achieve its economic objectives for inflation and growth. Finally we look at the global financial crisis and learn about new, nonconventional monetary management.
Field WorkCountry: Japan
Date: January 25, 2018
The Field Class Project for this course will be on Japan, where we will study the current economic policy of the government, which has been characterized as Abenomics. Traditionally, industrial countries have been fighting inflation since 1970, but current economic policies in Japan could be characterized as anti-deflationary policies.
In much of the industrial world, the global financial crisis (GFC) created a monetary deflation that has been combatted with the policy of quantitative easing (QE). Japan provides a fascinating example of the role of deflationary forces and the policies being used to combat them.
Students will visit the Bank of Japan to learn about Japanese monetary policy. They will talk with a US consulate attaché to understand Japanese economic policy relative to that of the USA. Lastly, the class will visit the Osaka Securities Exchange to gain some perspective on Japanese financial markets.
Student are expected to write a paper of 1500-2500 words describing the deflation experienced by the Japanese economy and its recent expansionary monetary policies. Papers should include graphs and data to support the policy explanation. They should also evaluate whether this is a particularly Japanese situation or if it might apply to other countries.
1. The unusual characteristics of the Japanese deflation the past 2 decades
2. Understand the elements of Abenomics and Japan’s monetary policy
3. Understand the characteristics of the Japanese economy leading to this situation