Authorised by Academic Registrar, April 1996
Objectives Students will gain a conceptual and analytical understanding of the monetary system in Australia in the context of the theoretical structure of an open economy, with particular emphasis given to monetary policy formulation and implementation. A general equilibrium model is developed that allows for competitive international capital markets and floating exchange rates, facilitating original, creative analysis and prediction in response to internal and external shocks.
Synopsis The subject covers the concept of money, the financial system and financial intermediation, the nature and roles of the Reserve Bank, banks, money market dealers and non-bank financial institutions. It deals with the role and interaction of financial markets and the determination of interest rates, foreign exchange markets and the determination of exchange rates, the interaction between foreign exchange and money markets and implications for policy, and Reserve Bank prudential regulation.
Assessment Two assignments (each 2000 words): 30% + Examination (3 hours): 70% + Students must obtain a satisfactory result in all areas of assessment