NORTH CAROLINA STATE UNIVERSITY
GRADUATE COURSE ACTION FORM
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TYPE OF PROPOSAL
DEPARTMENT/PROGRAM
Economics
COURSE PREFIX/NUMBER
ECG 785
PREVIOUS PREFIX/NUMBER
type previous course prefix/number here
DATE OF LAST ACTION
9/12/1991
COURSE TITLE
Monetary Economics
ABBREVIATED TITLE
MONETARY ECONOMICS
SCHEDULING
Fall
Spring
Alt. Year Odd
COURSE OFFERED
CREDIT HOURS
CONTACT HOURS
Studio
New Course
Drop Course
Course Revision
Dual-Level Course
REVISION
Content
Prefix/Number
Title
Abbreviated Title
Credit Hours
Contact Hours
Grading Method
Pre-Corequisites
Restrictive Statement
Description
Scheduling
Summer
Every Year
Alt. Year Even
Other
BY DISTANCE EDUCATION ONLY
ON CAMPUS ONLY
BOTH ON CAMPUS AND BY DISTANCE EDUCATION
3.0
Lecture/Recitation 3.0 Seminar
Independent Study/Research
Laboratory
Problem
Internship/Practicum/Field Work
GRADING
ABCDF
S/U
INSTRUCTOR (NAME/RANK)
Douglas Pearce, Professor
Graduate Faculty Status Associate
Full
ANTICIPATED ENROLLMENT
Per semester
Multiple sections Yes
PREREQUISITE(S)
ECG 705
COREQUISITE(S)
type course numbers here
PRE/COREQUISITE FOR
type course number(s) here
RESTRICTIVE STATEMENT
type BRIEF statement here
CURRICULA/MINORS
Required
Qualified Elective
type program name here
type elective name here
PROPOSED EFFECTIVE DATE
Spring 2006
Max.Section
No
APPROVED EFFECTIVE DATE __________________________
CATALOG DESCRIPTION (limit to 80 words): Topics in monetary theory and policy.
DOCUMENTATION AS REQUIRED
Please number all document pages
Course Justification
Proposed Revision(s) with
Justification
Student Learning Objectives
Enrollment for Last 5 Years
New Resources Statement
RECOMMENDED BY:
_______________________________________________________________________
Department Head/Director of Graduate Programs
Date
ENDORSED BY:
_______________________________________________________________________
Chair, College Graduate Studies Committee
Date
Consultation with other Departments
Syllabus (Old and New)
________________________________________________________________________
College Dean(s)
Date
Explanation of differences in
requirements of dual-level courses
APPROVED:
_______________________________________________________________________
Dean of the Graduate School
Date
Proposed Revisions
ECG 785
REVISION IN TITLE/ABBREVIATED TITLE:
Current Title: Monetary Theory
Current Abbreviated Title: MONETARY THEORY
Proposed Title: Monetary Economics
Proposed Abbreviated Title: MONETARY ECONOMICS
Justification: We propose a title change to better reflect the content of the course.
REVISION IN DESCRIPTION:
Current Description: Advanced study of micro- and macroeconomic theories of the role of money in the
economy. Primary emphasis on money demand and monetary growth models. Specific areas explored
include: traditional and recent developments in both asset and transactions theory and rational
expectations and optimal policy. Discussion of the empirical record included for most topics.
Proposed Description: Topics in monetary theory and policy.
Justification: We propose a description change to better reflect the content of the course and to allow for
flexibility in course content.
REVISION IN SYLLABUS:
The new syllabus is greatly updated as the most recent offering of the course was more than ten years ago.
Five-Year Enrollment History
ECG 785 Monetary Theory
(Proposed Title: Monetary Economics)
Not taught in last ten years.
ECG 785
Topics in Monetary Theory and Policy
Douglas K. Pearce
Sample Syllabus
This course is a field course for students desiring a specialization in monetary economics or
macroeconomics. The course is a survey of current topics in the area and the goal of the course is to
acquaint students with the literature on these topics and, for some students, to generate a topic for their
dissertations.
Students will be expected to discuss papers in class and to present at least one paper from the reading
list. Evaluation will be based on the in-class participation and on a term paper (15-20 pages). I expect
students to attend the macroeconomic workshops during the semester.
Books:
Carl Walsh, Monetary Theory and Policy, 2nd edition, MIT Press, 2003.
Michael Woodford, Interest and Prices, Princeton University Press, 2003.
Readings on the web:
JSTOR (www.JSTOR.org) has articles from many major journals, but with a lag of up to 5 years. Articles
available on JSTOR are denoted JSTOR.
North-Holland (www.elsevier.nl/homepage/sae/econbase/) publishes several journals and you can
download the articles. These are denoted NH. Some articles will be on electronic reserve. These are denoted
ER.
Books on reserve in D.H. Hill library:
O.J. Blanchard and S. Fischer, Lectures on Macroeconomics, MIT Press, 1989.
B.M. Friedman and F.H. Hahn, Handbook of Monetary Economics, volumes 1 and 2, North1990. (denoted HMoney)
J.B. Taylor and M. Woodford, Handbook of Macroeconomics, volumes 1A, 1B and 1C, North1999. (denoted HMacro)
N.G. Mankiw, Monetary Policy, University of Chicago Press, 1994. (denoted Mankiw)
N.G. Mankiw and D. Romer, New Keynesian Economics, vol 1 and 2, MIT Press, 1991.
(denoted Mankiw and Romer)
Holland,
Holland,
Topics
I. Reasons for Holding Money – MIU, CIA , OG and Search Models
Walsh, chapters 2 and 3
Blanchard and Fischer, section 4.1, 4.2, 4.5
A. Orphanides and R. Solow, “Money, Inflation and Growth,” in HMoney.
N. Kiyotaki and R. Wright, “ A Search Theoretic Approach to Monetary Economics”, AER, 1993, 63-77.
II. Short-run Models of Money and Output
Walsh, chapter 5
Woodford, chapters 3-5.
B. McCallum and E. Nelson, "An Optimizing IS-LM Specification for Monetary Policy and Business
Analysis." Journal of Money, Credit and Banking, August 1999, 296-316. (ER)
O. Blanchard, "Why Does Money Affect Output?" HMoney, vol. 2.
N.G. Mankiw and R. Reis, “Sticky Information versus Sticky Prices: A Proposal to Replace the New
Keynesian Phillips Curve,” Quarterly Journal of Economics, November 2002. (ER)
Cycle
III. Alternative Channels of Monetary Influences
C.D. Romer and D.H. Romer, "New Evidence on the Monetary Transmission Mechanism,"
BPEA,
1:1990
B. Bernanke and A. Blinder, "The Federal Funds Rate and the Channels of Monetary Transmission," AER,
September 1992 in JSTOR.
A.K. Kashyap, J.C. Stein, and D.W. Wilcox, "Monetary Policy and Credit Conditions: Evidence from
the
Composition of External Finance," AER, March 1993, in
JSTOR.
B.S. Bernanke and M. Gertler, "Inside the Black Box: The Credit Channel of Monetary Policy
Transmission," Journal of Economic Perspectives, Fall 1995, in JSTOR.
A.K. Kashyap abd J.C. Stein, “The Impact of Monetary Policy on Bank Balance Sheets,” CarnegieRochester Series on Public Policy, 1995, 151-195
IV. Empirical Evidence
Walsh, chapter 1
L. Christiano, M. Eichenbaum, and C. Evans, “Monetary Policy Shocks: What Have We Learned and To
What End, in HMacro.
J.P. Cover, "Asymmetric Effects of Positive and Negative Money Supply Shocks," QJE, 1992, in JSTOR.
E. Leeper, C. Sims and T. Zha , "What Does Monetary Policy Do?", BPEA, 1996, in JSTOR.
B. Bernanke and I. Mihov, “Measuring Monetary Policy,” QJE, 1998, in JSTOR. .
V. Monetary Policy
A. Overview
Woodford, chapter 1
Walsh, chapter 9
R. Clarida, J. Gali, and M. Gertler, “The Science of Monetary Policy: A New Keynesian Perspective,”
December 1999. (ER)
JEL,
B. Credibility
Woodford, Chapter 7
Walsh, Chapter 8
D.K. Pearce and M. Sobue, "Uncertainty and the Inflation Bias of Monetary Policy, " Economic Letters, 1997,
in NH.
J. Taylor, "Discretion versus Policy Rules in Practice," Carnegie-Rochester Conference Series,
December
1993. (ER)
J. Faust and L. Svensson, “Transparency and Credibility: Monetary Policy with Unobservable Goals,”
International Economic Review, 2001, ER.
C. Optimal Policy
Woodford, Chapters 6 and 8
Walsh, Section 10.4, Chapter 11
D. Empirical Evidence on Central Bank Behavior
B. Bernanake and M. Woodford, “Inflation Forecasts and Monetary Policy,” JMCB, 1997, JSTOR
J.S. Lapp, D.K. Pearce, and S. Laksanasut, “The predictability of FOMC Decisions: Evidence from the
Volcker and Greenspan Chairmanships,” Southern Economic Review, 2003, (ER).
H.W. Chappell, Jr., R. R. McGregor, and T. Vermilyea. 2005. CommitteeDecisions on Monetary Policy: Evidence from
Historical Records of the Federal OpenMarket Committee. MIT Press, 2005, on reserve..
VI. Asset Prices
A. Term structure of Interest Rates
Walsh, section 10.3
J.Y. Campbell, "Some Lessons from the Yield Curve," Journal of Economic Perspectives,
JSTOR.
R.J. Shiller, "The Term Structure of Interest Rates," HMoney, vol. 1.
B. Equities
J. Campbell, “Asset Pricing at the Millennium,” Journal of Finance, August 2000. (ER)
R.E. Hall. “Struggling to Understand the Stock market,” AER, May 2001. (ER)
R Mehra and E. Prescott, “The Equity Premium in Retrospect,” NBER Working Paper 1925, 2003
Summer 1995, in
Class Policies
Attendance
1. Excuses for anticipated absences must be cleared with the instructor before the absence. Examples of anticipated situations
where a student would qualify for an excused absence are:
a. The student is away from campus representing an official university function, e.g., participating in a professional
meeting, as part of a judging team, or athletic team. These students would typically be accompanied by a University
faculty or staff member.
b. Required court attendance as certified by the Clerk of Court.
c. Religious observances as verified by Parents & Constituent Services (515-2441). For more information about a variety of
religious observances, visit the Diversity Calendar.
d. Required military duty as certified by the student's commanding officer.
2. Excuses for emergency absences must be reported to the instructor as soon as possible, but not more than one week
after the return to class. Examples of emergency absences are:
a. Illness or injury when certified by an attending physician. Physicians on the Student Health Service staff do not provide
written excuses. Because of student confidentiality, information can only be released directly by the Counseling Center or Student
Health Services in case of crisis or with the student's written authorization.
b. Death or serious illnesses in the family when documented appropriately. An attempt to verify deaths or serious illness will be
made by Parents & Constituent Services (515-2441) at the request of the instructor.
For a full statement of the University Attendance Policy, see
http://www.ncsu.edu/policies/academic_affairs/pols_regs/REG205.00.4.php
Disabled Students: In accordance with Section 504 of the Rehabilitation Act of 1973 (“Rehab Act”), the Americans
with Disabilities Act of 1990 (“ADA”), and state law, North Carolina State University (hereinafter NC State) is
required to accommodate an otherwise qualified individual with a disability by making a reasonable modification in its
services, programs, or activities. This regulation addresses the eligibility of students for academic accommodations in
educational programs, services, and activities at NC State, as well as the provision of such accommodations to students
with various types of disabilities. For a full review of NCSU’s policy toward students with disabilities, please see:
http://www.ncsu.edu/policies/academic_affairs/courses_undergrad/REG02.20.1.php
Academic Integrity/Student Conduct: This course will be held in accordance with the University’s academic
integrity standards as outlined in the Code of Student Conduct. Please review the Code in its entirety at:
http://www.ncsu.edu/policies/student_services/student_discipline/POL11.35.1.php .