ECO 367R • Monetary Economics Most of this course is about
monetary theory, not monetary practice. Students will learn that
much of what they know about money derives from how a rational
agent attempts to maximize utility under budget constraints.
This leads, for example, to a deeper understanding of the
meaning of money as a store of value and as a medium of
exchange. Specifically, the course is a study how an economy
that uses fiat money achieves a higher level of economic welfare
than one that does not. Some questions to be addressed are the
following: How efficient is the raising of government revenues
from printing money (called seigniorage) in comparison to
taxation? What is the optimum quantity of money in a growing
economy? How is the demand for money affected by real capital?
What is the impact of liquidity on financial inter-mediation?
What are some important implications of bank risk? To answer
these questions and others we employ the overlapping generations
(OLG) model of the monetary economy. Thi