This course will assume a good knowledge of the 3-Equation model covered in Macroeconomic Theory 1. This is an elective course in advanced macroeconomics that will cover various issues related to the conduct of monetary policy and fiscal policy. The Global Financial Crisis highlighted how important an understanding of the banking sector is for macroeconomic policy makers. The first part of this course will study a simple question...What is money? After briefly studying the economic justifications for money we will study how the introduction of a banking sector influences monetary policy behaviour. We will then apply this theory to develop a coherent story of the Global Financial Crisis and the attendant monetary policy responses. The second part of the course will take a look at fiscal policy making and government debt dynamics. We will then apply the theories studied to understand sovereign debt crises, e.g. the Eurozone Crisis that followed the Global Financial Crisis.
Prerequisites: ECO - 2201 (Macroeconomic Theory I), ECO - 2202 (Macroeconomic Theory II)