Macro-Finance and Development [EDEVM312]

Acquis d'apprentissage

The objective of this course is to develop the comprehensive framework for analysing the macro-financial and monetary aspects of stabilization policies in emerging and developing market economies. The course enables students to acquire a good understanding of the main concepts of financial and monetary economics, study the role of the monetary stabilization policy and the development of financial intermediation.

The course emphasizes the real-world macro-financial issues currently facing the developing countries and analyzed in the reports of the international organizations (IMF, World Bank). More specifically, the course addresses the following topics: consequences of liberalization of financial markets, challenges and opportunities associated with international financial integration, open economy aspects of macroeconomic stabilization policy, the choice of the exchange rate regime, financial crisis, etc.

 In order to acquire practical skills needed for the analysis of applied issues, students will get familiar with the available data sources and databases used to evaluate the strengths and weaknesses of a country’s financial system.

Contenu

The course has three distinct parts:

1. Basic concepts and mechanisms of financial and monetary economics (a reminder): building blocks and characteristics of financial systems; relevant indicators to assess the financial system; financial instruments:  assessing risk and return, valuation of financial assets; interest rates and their determinants.

2. Monetary policy issues: monetary policy instruments and monetary policy institutions in emerging market countries and in countries with low financial development; the monetary transmission mechanism in developing countries; the choice of monetary policy targets and the exchange rate regime ; inflation stabilization and monetary policy credibility;  monetary policy and fiscal dominance; problems of "dollarized" economies ; monetary policy in crisis situations.

3. Issues related to the domestic banking system: the role of banks in developing countries, their regulation and supervision; the role of micro-finance institutions in financial development;  banking crises: their origins, macroeconomic effects and preventive measures; the interrelationship between  of the financial systems of advanced and emerging market economies; recent trends in restructuring and developing of the financial system.