À propos de ce cours
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The last three or four decades have seen a remarkable evolution in the institutions that comprise the modern monetary system. The financial crisis of 2007-2009 is a wakeup call that we need a similar evolution in the analytical apparatus and theories that we use to understand that system. Produced and sponsored by the Institute for New Economic Thinking, this course is an attempt to begin the process of new economic thinking by reviving and updating some forgotten traditions in monetary thought that have become newly relevant. Three features of the new system are central. Most important, the intertwining of previously separate capital markets and money markets has produced a system with new dynamics as well as new vulnerabilities. The financial crisis revealed those vulnerabilities for all to see. The result was two years of desperate innovation by central banking authorities as they tried first this, and then that, in an effort to stem the collapse. Second, the global character of the crisis has revealed the global character of the system, which is something new in postwar history but not at all new from a longer time perspective. Central bank cooperation was key to stemming the collapse, and the details of that cooperation hint at the outlines of an emerging new international monetary order. Third, absolutely central to the crisis was the operation of key derivative contracts, most importantly credit default swaps and foreign exchange swaps. Modern money cannot be understood separately from modern finance, nor can modern monetary theory be constructed separately from modern financial theory. That's the reason this course places dealers, in both capital markets and money markets, at the very center of the picture, as profit-seeking suppliers of market liquidity to the new system of market-based credit....
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English

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Globe

Cours en ligne à 100 %

Commencez dès maintenant et apprenez aux horaires qui vous conviennent.
Calendar

Dates limites flexibles

Réinitialisez les dates limites selon votre disponibilité.
Clock

Approx. 44 hours to complete

Recommandé : 13 weeks of study, 5 hours/week...
Comment Dots

English

Sous-titres : English...

Programme du cours : ce que vous apprendrez dans ce cours

Week
1
Clock
2 heures pour terminer

Introduction

The first two lectures paint a picture of the monetary system as the essential infrastructure of a decentralized market economy. The second lecture, "The Natural Hierarchy of Money", is a kind of high-level overview of the entire course, so don't expect to fully understand it until you look back after completing the rest of the course. Nevertheless it provides essential orientation for what comes after. Lectures notes for these and subsequent lectures may be found in the very first segment of this module. ...
Reading
12 vidéos (Total 124 min), 2 lectures
Video12 vidéos
Prerequisites?7 min
What is a Bank, a Shadow Bank, a Central Bank?12 min
Central Themes13 min
Reading: Allyn Young3 min
FT: The Eurocrisis, Liquidity vs. Solvency10 min
Hierarchy of Financial Instruments9 min
Hierarchy of Financial Institutions6 min
Dynamics of the Hierarchy6 min
Discipline and Elasticity, Currency Principle and Banking Principle8 min
Hierarchy of Market Makers9 min
Managing the Hierarchy18 min
Reading2 lectures
Lecture Notes (for download)10 min
Allyn Young10 min
Week
2
Clock
3 heures pour terminer

Introduction, continued

The next two lectures are meant to introduce a key analytical tool, the balance sheet approach to monetary economics, that we will be using repeatedly throughout the course. As inspiration, first I provide a concrete example of how the approach works by "translating" the Allyn Young reading into the balance sheet language. I follow that with a more systematic introduction to this essential tool....
Reading
20 vidéos (Total 130 min), 1 lecture, 1 quiz
Video20 vidéos
Allyn Young: Money and Economic Orthodoxy9 min
National Banking System Before the Fed3 min
Civil War Finance, Bonds, and Loans8 min
Civil War Finance, Legal Tenders7 min
National Banking System, Origins6 min
National Banking System, Instability5 min
Federal Reserve System, Plan6 min
Federal Reserve System, Actual6 min
FT: Dealer of Last Resort5 min
Reading: Hyman Minsky3 min
Sources and Uses Accounts6 min
Payments: Money and Credit5 min
Payments: Discipline and Elasticity4 min
The Survival Constraint3 min
Payment Example: Money and Credit10 min
Flow of Funds Accounts10 min
The Survival Constraint, Redux2 min
Liquidity, Long and Short9 min
Financial Fragility, Flows and Stocks6 min
Reading1 lecture
Hyman Minsky10 min
Quiz1 exercice pour s'entraîner
Introduction12 min
Week
3
Clock
2 heures pour terminer

Banking as a Clearing System

In the next four lectures, we build intuition by viewing banking as a payments system, in which every participant faces a daily settlement constraint (a survival constraint). From this point of view, the wholesale money market plays a key role by allowing banks to relax the discipline of a binding settlement constraint, delaying final payment by putting settlement off until a later date. The relative importance of the various money markets has changed since the 2008 crisis--Fed Funds is now less important--but the conceptual framework remains valid, indeed not only for dollar money markets but also for non-dollar money markets....
Reading
20 vidéos (Total 125 min), 1 lecture, 1 quiz
Video20 vidéos
One Big Bank8 min
Multiple Banks, A Challenge3 min
Reading: Charles F. Dunbar2 min
Correspondent Banking, Bilateral Balances10 min
Correspondent Banking, System Network3 min
Clearinghouse, Normal Operations8 min
Clearinghouse, Private Lender of Last Resort10 min
Central Bank Clearing4 min
Central Bank Cooperation5 min
FT: European Bank Deleveraging5 min
What are Fed Funds?5 min
Payment Settlement versus Required Reserves1 min
Payment Elasticity/Discipline, Public and Private9 min
The Function of the Fed Funds Market9 min
Payment versus Funding: An Example11 min
Brokers versus Dealers2 min
Payments Imbalances and the Fed Funds Rate7 min
Secured versus Unsecured Interbank Credit5 min
Required Reserves, Redux7 min
Reading1 lecture
Dunbar10 min
Quiz1 exercice pour s'entraîner
Banking as a Clearing System12 min
Week
4
Clock
3 heures pour terminer

Banking as a Clearing System, continued

The next two lectures extend the payments system frame to non-banks by bringing in repo markets, and to the international monetary system by bringing in Eurodollar markets. Here, as in the previous two lectures, the emphasis is on settlement, and so implicitly on so-called "funding liquidity". The last three segments of the Eurodollar lecture, on the failure of two seemingly obvious arbitrage conditions, are meant to motivate the shift to market-making and "market liquidity" in the next module. ...
Reading
20 vidéos (Total 131 min), 1 lecture, 1 quiz
Video20 vidéos
Money Market Interest Rate Patterns3 min
What is Repo?3 min
Repo in Balance Sheets7 min
Comparison with Fed Funds5 min
Legal Construction of Repo9 min
Security Dealers Balance Sheet11 min
Repo, Modern Finance, and the Fed8 min
Interest Rate Spreads: Before the Crisis5 min
Interest Rate Spreads: After the Crisis8 min
FT: Ring-fencing and the Volcker Rule9 min
The Eurodollar Market in Crisis4 min
What are Eurodollars?7 min
Why is There a Eurodollar Market?4 min
Eurodollar as Global Funding Market11 min
Liquidity Challenge of Eurodollar Banks10 min
FRA as Implicit Swap of IOUs4 min
Forward Parity, Interest Rates, EH3 min
Forward Parity, Exchange Rates, UIP5 min
Forward Rates are NOT Expected Spot Rates2 min
Reading1 lecture
Bagehot10 min
Quiz1 exercice pour s'entraîner
Banking as a Clearing System, continued12 min

Enseignant

Perry G Mehrling

Professor
Economics, Barnard College

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