COURSE OUTLINE
Course Code / Title : HE3111 Monetary Economics
Pre-requisites : HE1003 or HE1004 Mathematics for Economists,
HE2001 Microeconomics II and HE2002 Macroeconomics II
No. of AUs. : 3
Contact Hours : 39
Course Aims
The course will start with a simple model of money, the overlapping generations model where
money is a store of value. The fundamentals of the demand for fiat money, inflation, the
demand deposit, bank runs and the role of central banking are examined. Then, we will study
money interaction with other financial assets and the real effects of money on output and
national account.
Intended Learning Outcomes (ILO)
By the end of this course, you (as a student) would be able to:
1. interpret and explain the standard modern model of a closed monetary
2. explain the positive and negative effects of inflation
3. explain the real effects of money on output and national account
4. evaluate how financial innovations affect the welfare of the economy
5. apply the bank-run model to explain main sources of financial fragility
Course Content
1. Fiat money, commodity money and inflation
2. Demand deposit and the role of central bank
3. Money’s interaction with other financial assets
4. Effects of money on saving, investment, and output
Course Assessment
Mid-term Quiz : 25%
Presentation : 15%
Final Examination : 60%
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Total 100%
CA1: Mid-term Quiz (25%)
The quiz will comprise multiple-choice, fill in the blank and matching questions, which will take
place during week 7 or 8. Tested material will include content from readings, lecture, and
tutorial activities. The quiz will be conducted in the lecture theatre, and you must complete
within one hour.
CA2: Presentation (15%)
Team Presentation: presenting the findings from the group assignment. Students will be
assessed as a team; however, individual score may vary based on peer’s feedback (if any) about
the individual contributions to the Presentation.
CA3: Final Examination (60%)
A comprehensive examination that will evaluate the students’ knowledge and understanding of
the course. It will include everything covered throughout the semester. There will be multiple
choice, fill in the blank, matching questions, and essay questions.
Formative feedback
In groups, you will choose to present a research article relating to monetary economics and
conduct a presentation to the entire class. You will receive both written and verbal feedback
from the lecturer about your reports and presentations.
Reading and References
Champ, Freeman, Haslag, “Modeling Monetary Economies”, 5th edition, 2022.
Course Policies and Student Responsibilities
(1) General
You are expected to complete all assigned pre-class readings and activities, attend all seminar
classes punctually and take all scheduled assignments and tests by due dates. You are expected
to take responsibility to follow up with course notes, assignments and course related
announcements for seminar sessions you have missed. You are expected to participate in all
seminar discussions and activities.
(2) Absenteeism
This course requires you to be in class to contribute to team work. In-class activities make up a
significant portion of your course grade. Absence from class without a valid reason will affect
your overall course grade. Valid reasons include falling sick supported by a medical certificate
and participation in NTU’s approved activities supported by an excuse letter from the relevant
bodies. There will be no make-up opportunities for in-class activities.
Academic Integrity
Good academic work depends on honesty and ethical behaviour. The quality of your work as a
student relies on adhering to the principles of academic integrity and to the NTU Honour Code,
a set of values shared by the whole university community. Truth, Trust and Justice are at the
core of NTU’s shared values.
As a student, it is important that you recognize your responsibilities in understanding and
applying the principles of academic integrity in all the work you do at NTU. Not knowing what
is involved in maintaining academic integrity does not excuse academic dishonesty. You need
to actively equip yourself with strategies to avoid all forms of academic dishonesty, including
plagiarism, academic fraud, collusion and cheating. If you are uncertain of the definitions of
any of these terms, you should go to the academic integrity website for more information.
Consult your instructor(s) if you need any clarification about the requirements of academic
integrity in the course.
Course Instructors
Instructor Office Location Phone Email
Dr Chua Yeow Hwee TBC TBC yeowhwee.chua@ntu.edu.sg
Planned Weekly Schedule
Week Topic Course LO Readings/ Activities
1 Introduction of model of money 1 Chapter 1, 2
2 Demand for fiat money 1, 2 Chapter 3
3 Barter and Commodity money 1, 2 Chapter 4
4 Inflation 2 Chapter 5
5 Price Surprises 2 Chapter 7
6 Money and Capital 2, 4 Chapter 8
7 Liquidity and Financial intermediation 4 Chapter 9
Recess Week
8 Central banking 3 Chapter 10
9 Money Stock fluctuations 2, 3 Chapter 11
10 Fully backed Central Bank Money 3, 4 Chapter 12
11 Payment System 3, 4 Chapter 13
12 Bank Risk 5 Chapter 14
13 Liquidity Risk and Bank Panics 5 Chapter 15
Appendix 1: Assessment Criteria - Presentation
Exceptional Effective Developing Unsatisfactory
Grade: As Grade: Bs Grade: C to D Grade: F
Explanation of Issue/ problem to Issue/ problem Issue/ problem to Issue/ problem to
issues be considered to be considered be considered be considered
critically is stated critically is stated, critically is stated critically is stated
clearly and described, and but description without
described clarified so that leaves some clarification or
comprehensively, understanding is terms undefined, description.
delivering all not seriously ambiguities
relevant impeded by unexplored,
information omissions. boundaries
necessary for full undetermined,
understanding. and/ or
backgrounds
unknown.
Student's position Specific position Specific position Specific position Specific position
(perspective, (perspective, (perspective, (perspective, (perspective,
thesis/hypothesis) thesis/ hypothesis) thesis/ thesis/ thesis/ hypothesis)
is imaginative, hypothesis) takes hypothesis) is stated, but is
taking into account into account the acknowledges simplistic and
the complexities of complexities of different sides of obvious.
an issue. an issue. an issue.
Limits of position
(perspective,
thesis/ hypothesis)
are acknowledged.
Influence of context Thoroughly Identifies own Questions some Shows an
and assumptions (systematically and and others' assumptions. emerging
methodically) assumptions and Identifies several awareness of
analyzes own and several relevant relevant contexts present
others' contexts when when presenting assumptions
assumptions and presenting a a position. May (sometimes labels
carefully evaluates position. be more aware of assertions as
the relevance of others' assumptions).
contexts when Incorporates assumptions than Begins to identify
presenting a alternate, one's own (or vice some contexts
position. divergent, or versa). when presenting a
contradictory position.
Integrates perspectives or Includes
alternate, ideas in an (recognizes the Acknowledges
divergent, or exploratory way value of) (mentions in
contradictory alternate,
perspectives or divergent, or passing) alternate,
ideas fully. contradictory divergent, or
perspectives or contradictory
ideas in a small perspectives or
way. ideas.
Conclusions and Conclusions and Conclusion is Conclusion is Conclusion is
related outcomes related outcomes logically tied to a logically tied to inconsistently tied
(implications and (consequences and range of information to some of the
consequences) implications) are information, (because information
logical and reflect including information is discussed; related
student’s informed opposing chosen to fit the outcomes
evaluation and viewpoints; desired (consequences
ability to place related conclusion); some and implications)
evidence and outcomes related outcomes are oversimplified.
perspectives (consequences (consequences
discussed in and implications) and implications)
priority order. are identified are identified
clearly. clearly.
Civic Tailors Effectively Communicates in Communicates in
Communication communication communicates in civic context, civic context,
strategies to civic context, showing ability showing ability to
effectively showing ability to do more than do one of the
express, listen, and to do all of the one of the following:
adapt to others to following: following: express, listen,
establish express, listen, express, listen, and adapt ideas
relationships to and adapt ideas and adapt ideas and messages
further civic action and messages and messages based on others'
based on others' based on others' perspectives.
perspectives. perspectives.
Presentation Delivery Delivery Delivery Delivery
Delivery techniques techniques techniques techniques
(posture, gesture, (posture, (posture, gesture, (posture, gesture,
eye contact, and gesture, eye eye contact, and eye contact, and
vocal contact, and vocal vocal
expressiveness) vocal expressiveness) expressiveness)
make the expressiveness) make the detract from the
presentation make the presentation understandability
compelling, and presentation understandable, of the
speaker appears interesting, and and speaker presentation, and
polished and speaker appears appears tentative. speaker appears
confident. comfortable. uncomfortable.
Please Note (compulsory note): To do well on the team assessment, it is necessary for you to demonstrate
positive interdependence and teamwork. In principle, you will receive the same marks as your team.
However, your individual score may vary based on feedback about your contributions to the Presentation.
