DECO 22A07 - Monetary Policies

Central Bankers have become key-decision makers in fine tuning the economy. Central banks watchers is now a full-time job aiming at understanding central banks decision-making process in order to better predict their behavior. In the first part, students will be exposed to central bank’s roles and its margin of manoeuvre given the exchange rate regime. This first step helps to understand central banks reaction when facing a crisis. The course will focus especially on crisis case-studies in the US, Europe, Asia and Latin America underliying the factors contributing to the crisis like financial innovation, govenment debt, housing market. The second part of the course will explain the transformation of the financial system and its growing complexity and will possibliy underline the factors that may contribute to the next crisis. Lastly, having identified weaknesses in the current financial system, students will consider policy responses to avoid the looming crisis. The political aspect of those policy reponses will be carefully analysed as financial stability responses often have implications on growth, inequality and sustainability.

In this section, please specify the objectives of your class.

At the end of the course, the student is expected to :

1°) understand the Central bank’ role and mission over time and the relationship between exchange regime and central bank’s ability to mitigate crisis

2°) understand the crises’ dynamics in the USA, Europe, Asia and Latin America

3°) Understand the profound changes at work in the financial system

4°) Understandpolicy/ regulatory responses to the crises and transgormation of the financial system and formulate her/his own view on those policy responses

To validate the course, the student is expected to pass the following assignments:

1°) 30% press review (teamwork)

2°) 30% oral presentation (teamwork)

3°) 40% final paper (individual)