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| Semester | spring semester 2023 |
| Course frequency | Every spring sem. |
| Lecturers | Philip Turner (philip.turner@unibas.ch, Assessor) |
| Content | This kolloquium analyses a new revolution in monetary policy, drawing also on earlier theories of money. Three huge shocks – the GFC, the near-collapse of the euro and COVID-19 – led central banks on a path of unprecedented balance sheet expansion. What challenges do central banks face now? In this course, understanding these policies and challenges is helped both by finance theory and by knowledge of earlier monetary policy frameworks. |
| Bibliography | There is no course textbook. As a preparation for Monday, 6 March, read Chapter 1 (pp 3-17) of Philip Turner (2021) “The new monetary policy revolution: advice and dissent.” NIESR Occasional Paper no 60. The first part of the seminar will be a discussion of the issues raised in this chapter. Two volunteers to introduce speaking for about 5 minutes or so. One to summarise how the analysis of monetary policy could benefit from taking greater account of finance theory and practice. The other to discuss why the expanded tool-kit of monetary policy can help to counter future financial and macroeconomic shocks. Then a tour de table of all students: please pick one or two points from the chapter of interest to you. The second part of the seminar will consider Quantitative Tightening (QT). In the case of most countries. QT means the central bank selling bonds. The notes are (1) Allen, Chadha and Turner “Quantitative Tightening: protecting monetary policy from fiscal encroachment” VOXeu NIESR Policy Paper 27, 28 July 2021 and Turner “Quantitative Tightening: missed opportunities.” Two volunteers, one for each paper. In the case of Switzerland, QT means the SNB selling its foreign assets. On this read, Gerlach, Lengwiler and Wyplosz “Monetary policy options” SNB Observatory no 6 (December 2022). One volunteer to summarise the paper, and a second volunteer to say whether the SNB is too worried about a strong Franc. Then a tour de table. As a preparation for Tuesday, 7 March, read “Monetary policy in a world of radical uncertainty” a speech by Mervyn King. Institute of International Monetary Research Conference Paper. November 2021. Two volunteers to lead off, speaking for 5 minutes each (and working out between yourselves how to divide your discussion). Then a tour de table. The second half of the seminar will discuss the Great Monetary Tightening of 2022. There has been a lively debate about how central banks should respond to the recent surge in inflation. On how to interpret signals from bond markets, see “Is a bond market crisis imminent?” by Marina Misev and Philip Turner. See the course powerpoint “The great monetary tightening of 2022.” Two volunteers to lead off on the inflation risk (one arguing that central banks are behind the curve and the other that they are not). There are also questions about equilibrium real interest rates in the future. A third volunteer to talk about r*. Short readings are: - Philipp Hildebrand “The old inflation playbook no longer applies.” FT 28 Jan 2022 - Rick Mishkin “Flaws are evident in the Fed’s approach to inflation.” FT 17 Jan 2022 - Chris Giles et al “Central banks haunted by fears of stagflation.” FT 5 Oct 2021 - Jorma Schäublin and Philip Turner “A latent rise in r* to upend monetary policy?” Central Banking Publications 31 March 2021. Please consult the syllabus before the first lecture. |
| Comments | Please consult the syllabus before the first lecture: |
| Weblink | Syllabus |
| Admission requirements | Prerequisites: Bachelor in Business and Economics. |
| Course application | Registration: Please enrol in MOnA. EUCOR-Students and students of other Swiss Universities have to enrol at the students administration office (studseksupport1@unibas.ch) within the official enrolment period. Enrolment = Registration for the exam! |
| Language of instruction | English |
| Use of digital media | No specific media used |
| Interval | Weekday | Time | Room |
|---|---|---|---|
| wöchentlich | Monday | 12.30-14.00 | Juristische Fakultät, Seminarraum S4 HG.56 |
| wöchentlich | Tuesday | 08.30-10.00 | Juristische Fakultät, Seminarraum S4 HG.56 |
| Modules |
Core Module: Core Areas in Monetary Economics (Master's Studies: International and Monetary Economics) Modul: Europäisierung und Globalisierung (Master's Studies: European Global Studies) Module: Field Electives in Finance and Money (Master's Studies: Finance and Money) Module: Specific Electives in Monetary Economics and Financial Markets (Master's Studies: Business and Economics) Specialization Module: Monetary Economics and Financial Markets (Master's Studies: Business and Economics (Start of studies before 01.08.2021)) |
| Assessment format | record of achievement |
| Assessment details | The course will require that students take an active part in discussing what are live and controversial questions. Students will be invited to prepare a very short presentation (10 minutes) on one article or a section of a book relevant to a theme. They should explain the point of the article and should say on what they agree or disagree. They can suggest a few key questions for the class to discuss. Making presentations is an active way of learning both individually and from others, and is an important skill to acquire for any job. This will not be graded and students should feel relaxed about it. Each student will be asked to write an essay on a topic/question drawn from a list covering the six themes (60% of the grade), and give a 20-minute talk on that essay (20% of the grade). Not more than 4000 words plus a few well-chosen graphs and tables. Each student should feel free to discuss this essay with the lecturer at any stage. 20% of the grade will be for class participation. |
| Assessment registration/deregistration | Reg.: course registration, dereg: cancel course registration |
| Repeat examination | no repeat examination |
| Scale | 1-6 0,1 |
| Repeated registration | as often as necessary |
| Responsible faculty | Faculty of Business and Economics , studiendekanat-wwz@unibas.ch |
| Offered by | Faculty of Business and Economics |