Economics of Money and Banking from Coursera

The last three or four decades have seen a remarkable evolution in the institutions that comprise the modern monetary system. The financial crisis of 2007-2009 is a wakeup call that we need a similar evolution in the analytical apparatus and theories that we use to understand that system. Produced and sponsored by the Institute for New Economic Thinking, this course is an attempt to begin the process of new economic thinking by reviving and updating some forgotten traditions in monetary thought that have become newly relevant.

Three features of the new system are central.

Most important, the intertwining of previously separate capital markets and money markets has produced a system with new dynamics as well as new vulnerabilities. The financial crisis revealed those vulnerabilities for all to see. The result was two years of desperate innovation by central banking authorities as they tried first this, and then that, in an effort to stem the collapse.

Second, the global character of the crisis has revealed the global character of the system, which is something new in postwar history but not at all new from a longer time perspective. Central bank cooperation was key to stemming the collapse, and the details of that cooperation hint at the outlines of an emerging new international monetary order.

Third, absolutely central to the crisis was the operation of key derivative contracts, most importantly credit default swaps and foreign exchange swaps. Modern money cannot be understood separately from modern finance, nor can modern monetary theory be constructed separately from modern financial theory. That's the reason this course places dealers, in both capital markets and money markets, at the very center of the picture, as profit-seeking suppliers of market liquidity to the new system of market-based credit.

What's inside

Syllabus

Introduction

The first two lectures paint a picture of the monetary system as the essential infrastructure of a decentralized market economy. The second lecture, "The Natural Hierarchy of Money", is a kind of high-level overview of the entire course, so don't expect to fully understand it until you look back after completing the rest of the course. Nevertheless it provides essential orientation for what comes after. Lectures notes for these and subsequent lectures may be found in the very first segment of this module.

Traffic lights

Read about what's good

what should give you pause

and possible dealbreakers

Explores modern monetary systems, providing a fresh perspective on monetary economics to those looking for it

Develops key analytical tools, like the balance sheet approach, that are essential for understanding monetary economics

Suitable for those looking to delve into financial theory and the workings of modern finance in relation to money

Covers topics such as dealer market liquidity, the role of central banks, and the international monetary system, which are highly relevant to the current economic landscape

Facilitated by seasoned instructors, Perry G Mehrling, who bring extensive knowledge and expertise in monetary economics

Examines topics through a unique lens, making it suitable for those seeking to expand their understanding of monetary economics

Reviews summary

Non-traditional money and banking view

According to learners, this course offers a unique and valuable perspective on economics, specifically presenting a coherent 'money view' that challenges standard approaches. Many found the lectures to be insightful and the instructor's expertise clear. The course uses a balance sheet approach extensively, which is central to its framework. While highly praised for its depth and alternative framework, some students noted the complexity of the material and felt it required prior economic knowledge. The exams were occasionally mentioned as challenging, but overall, the course is seen as highly rewarding for those seeking a different way to understand modern finance and money.

Extensive use of balance sheets.

"The balance sheet approach is central to the course and is used effectively throughout."

"Understanding the balance sheet mechanics is key to following the arguments made in the lectures."

"I found the balance sheet translations of historical texts particularly helpful for grasping the method."

"The course heavily relies on balance sheet analysis to explain monetary phenomena."

Lectures are well-structured and detailed.

"The lectures are incredibly informative and provide a comprehensive overview of the 'money view'."

"I found the structure of the lectures, moving from basic concepts to more complex ones, very logical."

"Video and audio quality of the lectures were good, making them easy to watch."

"Learners found the lecture content deep and thought-provoking."

Instructor is knowledgeable and engaging.

"The professor is clearly an expert in the field and explains complex topics with clarity."

"His lectures are captivating and reveal a deep understanding of the subject matter."

"The instructor's passion for the 'money view' is evident and makes the material more interesting."

"Learners consistently praised the instructor's command of the subject and presentation style."

Offers a distinct, non-traditional framework.

"It fundamentally altered the way I think about money and banking, offering a powerful alternative perspective."

"The 'money view' presented here is incredibly insightful and provides a much-needed alternative to mainstream economics."

"This course does an excellent job of articulating a coherent framework beyond standard finance theory."

"I appreciated learning this alternative perspective on how money and finance actually work in the real world."

Benefits from existing econ/finance background.

"This course is probably best suited for those with some prior background in economics or finance."

"Learners without previous knowledge might find it overwhelming or difficult to keep pace."

"While not strictly required, having an understanding of basic financial concepts helps immensely."

"The level is definitely more advanced than a beginner's introduction."

Topics can be difficult and complex.

"The course material is quite dense and requires careful attention and review."

"Some lectures were challenging to follow, especially when new concepts were introduced rapidly."

"I found some of the analytical tools, particularly the balance sheet mechanics, took time to grasp fully."

"Requires a solid foundation in economics to fully appreciate the nuances presented."

Activities

Be better prepared before your course. Deepen your understanding during and after it. Supplement your coursework and achieve mastery of the topics covered in Economics of Money and Banking with these activities:

Review Key Concepts and Theories in Monetary Economics

Show steps

Refresh foundational knowledge to enhance comprehension during the course.

Show steps

Review textbooks, lecture notes, and articles on key concepts.
Attend refresher sessions or workshops.

Read 'The Evolution of the Modern Monetary System'

Show steps

Review the historical evolution of the monetary system and provide context for the course material.

Show steps

Read chapters 1 and 2 of the book.
Summarize the key points of each chapter.
Identify the main arguments and theories presented in the book.

Learn about the Balance Sheet Approach to Monetary Economics

Show steps

Gain a deeper understanding of one of the key analytical tools used in the course.

Show steps

Watch the lecture on the Balance Sheet Approach.
Read the lecture notes on the topic.
Complete the practice exercises provided.

Four other activities

Expand to see all activities and additional details

Show all seven activities

Attend a Workshop on Financial Market Analysis

Show steps

Enhance understanding of how financial markets interact with the monetary system.

Show steps

Identify and register for a relevant workshop.
Attend the workshop and actively participate in discussions.
Apply the knowledge gained to the course material.

Practice Using Balance Sheet Analysis to Analyze Monetary Phenomena

Show steps

Build skills in applying the Balance Sheet Approach to real-world scenarios.

Browse courses on Balance Sheet Analysis

Show steps

Identify the key balance sheet items for a bank.
Analyze how changes in these items impact the bank's financial position.
Use this analysis to explain real-world monetary events.

Model a Monetary Policy Decision Using Agent-Based Simulation

Show steps

Gain hands-on experience in using simulation to analyze monetary policy decisions.

Show steps

Learn the basics of agent-based modeling.
Develop a simple model of a monetary economy.
Test the model using different monetary policy scenarios.

Participate in a Case Competition on Monetary Policy

Show steps

Apply course knowledge to solve real-world problems and foster critical thinking.

Browse courses on Monetary Policy

Show steps

Form a team and register for the competition.
Analyze the case study and develop a policy recommendation.
Present your findings to a panel of judges.

Career center

Learners who complete Economics of Money and Banking will develop knowledge and skills that may be useful to these careers:

Financial Analyst

Financial Analysts work in multiple industries, studying financial data and making recommendations on investments, business decisions, and other financial matters. This course provides the foundation needed to understand the financial system and its interdependencies with the larger economy, a necessary skill for financial analysts.

See salaries and explore the career path for Financial Analyst

Risk Manager

Risk Managers identify, assess, and manage risks that could impact a company's financial performance. This course will teach you a new conceptual framework for understanding the types of risk that exist within a financial system and the tools to assess and mitigate them.

See salaries and explore the career path for Risk Manager

Bank Examiner

Bank Examiners are responsible for evaluating the financial health of banks and other financial institutions. They conduct audits to ensure banks are adhering to regulations and protecting the interests of depositors. This course will help you to understand the structure and operation of the financial system, a requirement for this role.

See salaries and explore the career path for Bank Examiner

Credit Risk Analyst

Credit Risk Analysts assess the creditworthiness of banks and other financial institutions. They develop and implement risk management strategies and policies to mitigate losses. This course will help you to understand the latest developments in credit markets and risk management, which is applicable to this role.

See salaries and explore the career path for Credit Risk Analyst

Data Scientist

Data Scientists use data to solve business problems. They work in a variety of industries, including finance, healthcare, and retail. This course will help you to gain both the technical skills and applied economics and finance knowledge, both of which are necessary to succeed as a Data Scientist.

See salaries and explore the career path for Data Scientist

Actuary

Actuaries use mathematical and statistical techniques to assess risk and uncertainty. They work in a variety of industries, including insurance, finance, and healthcare. This course's topics on risk management and modeling will give you a strong foundation for this role.

See salaries and explore the career path for Actuary

Investment Banker

Investment Bankers provide financial advice and services to corporations and governments. They help raise capital, merge with other companies, and make other financial decisions. The course’s focus on the interaction between capital and money markets will provide you with an advantage in this role.

See salaries and explore the career path for Investment Banker

Quantitative Analyst

Quantitative Analysts develop and implement mathematical models to analyze financial data. They use these models to make predictions about the future performance of financial markets. This course will provide you with this fundamental knowledge in economics and finance along with the statistical and mathematical modeling skills needed for this career.

See salaries and explore the career path for Quantitative Analyst

Economist

Economists study the production, distribution, and consumption of goods and services. They develop and implement economic policies to promote economic growth and stability. This course will help you to gain a comprehensive understanding of economic principles.

See salaries and explore the career path for Economist

Monetary Economist

Monetary Economists study the role of money in the economy. They develop and implement monetary policy to achieve economic stability and growth. This course will help you to gain a comprehensive understanding of the principles underlying monetary economics.

See salaries and explore the career path for Monetary Economist

Banker

Bankers provide financial services to customers, such as checking and savings accounts, loans, and investment advice. They must understand the financial system and how to manage risk. This course will help you to acquire these skills.

See salaries and explore the career path for Banker

Financial Advisor

Financial Advisors provide financial advice and services to individuals and families. They help clients plan for retirement, save for college, and manage their investments. This course will help you to develop the skills needed to succeed in this role.

See salaries and explore the career path for Financial Advisor

Financial Manager

Financial Managers oversee the financial operations of businesses and organizations. They develop and implement financial plans, manage cash flow, and make investment decisions. This course will help you to gain the skills needed to succeed in this role.

See salaries and explore the career path for Financial Manager

Market Researcher

Market Researchers conduct research to understand the needs and wants of consumers. They work in a variety of industries, including marketing, advertising, and product development. This course on economics of money and banking may be useful for those who want to work in financial market research.

See salaries and explore the career path for Market Researcher

Software Engineer

Software Engineers design, develop, and maintain software systems. They work in a variety of industries, including finance, healthcare, and manufacturing. This course on economics of money and banking may be useful for those who want to work in FinTech or who develop financial software.

See salaries and explore the career path for Software Engineer