Course overview
- Study period
- Semester 1, 2025 (24/02/2025 - 21/06/2025)
- Study level
- Undergraduate
- Location
- St Lucia
- Attendance mode
- In Person
- Units
- 2
- Administrative campus
- St Lucia
- Coordinating unit
- Economics School
This course introduces and examines a number of advanced topics in monetary economics. Topics include: existence of money and currency regimes, the short-run and long-run effect of money in the economy, optimal monetary policy in a closed and open economy, and the time-inconsistency problem in monetary policy.
This is an economic course on money and monetary policy and its effect on the Macroeconomy. This course is divided into four sections.
The first section examines the role of money in the economy and the development of media of exchange. The analytical framework for this section is a search model of money. This section is complemented with an overview of the development of commodity and fiat money in the history of Australia and also some worldwide examples.
The second section focuses on money in the long run. We first examine the empirical evidence on the long-run relationship between real variables and money. The analytical framework for this section is a model of money in the utility function. This framework is used to investigate this long-run relationship, the optimal inflation rate, the effect of inflation of government revenue (seigniorage) and on the accumulation of other assets (Tobin effect). This section is complemented with some analysis of the long-run effect of money in the Australian economy.
The third section focuses on money in the short run. We first examine the empirical evidence on the short-run relationship between real variables and money. The analytical framework for this section is a new Keynesian model. This framework is used to investigate this short-run relationship and the optimal conduct of monetary policy in a closed and open economy. This section is complemented with some analysis of the short-run effect of money in the Australian economy.
The fourth section studies money in the short run and in long run and the time inconsistency problem that naturally arises in monetary policy. We study institutional changes such as delegation and the practice of inflation targeting as solutions to this problem. The Australian experience is discussed.
Course requirements
Assumed background
The pre-requisite, ECON2020 or ECON2040, is ESSENTIAL for the course as we will invoke a lot of concepts/materials from the pre-requisite. Therefore, if students have not done this pre-requisite, they should do it first BEFORE taking ECON3200 the following year.
FAQ: Do I need to be good in MATHEMATICS to do this course?ﾠ
A: You need to be reasonably comfortable with using algebra and calculus. Some assessments, especially the final exam, will involve mathematical questions. Therefore it is important that you attend the lecture because all mathematical materials will be dealt with in detail in the class.
Prerequisites
You'll need to complete the following courses before enrolling in this one:
ECON2020 or 2021 or 2040
Course contact
School enquiries
School Enquiries, School of Economics
All enquiries regarding student and academic administration (i.e. non-course content information, e.g., class allocation, timetables, extension to assessment due date, etc.) should be directed toﾠenquiries@economics.uq.edu.au.ﾠ
Enquiries relating specifically to course content should be directed to the Course Coordinator/Lecturer.
Course staff
Lecturer
Tutor
Miss Keerti Paidipalli
Timetable
The timetable for this course is available on the UQ Public Timetable.
Additional timetable information
Lectures commence in Week 1
Tutorials commence in Week 1
Please see the Learning Activities section of this Course Profile for the timetabling implications of public holidays.
Important Dates:
· Public Holidays: 18–21 Apr – Easter public holidays, 5 May – Labour Day public holiday
· Mid-Semester Break: 21ﾠApril - 25ﾠApril. Semester 1 classes recommence on Mon 28 ﾠApril.
Students should refer to the timetable prior to the commencement of classes to ensure that they have the most up to date information, as from time to time late room changes may occur.
Aims and outcomes
The aim of this course is to provide a comprehensive understanding of the role of money and the impact of monetary policy on the macroeconomy.
Learning outcomes
After successfully completing this course you should be able to:
LO1.
Explain how money has historically changed the trading process.
LO2.
Evaluate the effect of monetary policy in the economy in the short run and in the long run.
LO3.
Explain how monetary policy should be conducted and its effect on welfare.
LO4.
Apply different formal macroeconomic frameworks to study monetary issues and evaluate their pros and cons.
LO5.
Assess practical analysis of Australian monetary policy and assess its impact on the Macroeconomy.
Assessment
Assessment summary
| Category | Assessment task | Weight | Due date |
|---|---|---|---|
| Tutorial/ Problem Set |
Assignment 1
|
15% |
21/03/2025 1:00 pm |
| Examination | In-Semester Exam | 30% |
8/04/2025 2:00 pm |
| Tutorial/ Problem Set |
Assignment 2
|
15% |
16/05/2025 1:00 pm |
| Examination |
Final exam
|
40% |
End of Semester Exam Period 7/06/2025 - 21/06/2025 |
Assessment details
Assignment 1
- Online
- Mode
- Written
- Category
- Tutorial/ Problem Set
- Weight
- 15%
- Due date
21/03/2025 1:00 pm
- Learning outcomes
- L01, L02, L03, L04, L05
Task description
The assignment consists of various questions that assess the understanding and the ability to apply the concepts and models studied in class. Collection, presentation and understanding of data related to monetary problems may be also required.
Artificial Intelligence (AI) and Machine Translation (MT) are emerging tools that may support students in completing this assessment task. Students may appropriately use AI and/or MT in completing this assessment task. Students must clearly reference any use of AI or MT in each instance.
A failure to reference generative AI or MT use may constitute student misconduct under the Student Code of Conduct.
Submission guidelines
Online submission via the course Blackboard site.
Deferral or extension
You may be able to apply for an extension.
The maximum extension allowed is 7 days. Extensions are given in multiples of 24 hours.
Requests for the granting of extensions must be submitted through my.UQ: Applying for an extension - my.UQ - University of Queensland with supporting documentation before the submission due date/time, and this will be considered on a case-by-case basis. If an extension is approved, the new agreed date for submission will be noted on the application and the student notified through their student email. Extensions cannot exceed 7 days and cannot exceed the number of days you suffered from a medical condition, as stated on the medical certificate.
Late submission
A penalty of 10% of the maximum possible mark will be deducted per 24 hours from time submission is due for up to 7 days. After 7 days, you will receive a mark of 0.
In-Semester Exam
- Mode
- Written
- Category
- Examination
- Weight
- 30%
- Due date
8/04/2025 2:00 pm
- Learning outcomes
- L01, L02, L03, L04
Task description
This will be a 90 minute in-semester exam, plus an additional 10 minutes reading time. Total time: 100 minutes. It will cover material dealt with from lectures and tutorials 1 to 5. The exam will comprise of two questions. The first will have four statements (that must be assessed as true or false by the student and the student must explain in few lines why the statement is true or false). The second will be a long problem-solving question with several subquestions.
The exam will be in-class invigilated.
Exam details
| Planning time | 10 minutes |
|---|---|
| Duration | 90 minutes |
| Calculator options | (In person) Casio FX82 series only or UQ approved and labelled calculator |
| Open/closed book | Closed Book examination - no written materials permitted |
| Exam platform | Paper based |
| Invigilation | Invigilated in person |
Submission guidelines
Exam will be in person - in class.
Deferral or extension
You may be able to defer this exam.
If you are unable to attend a scheduled exam: an In-Class Quiz, In-Semester or Final Exam (e.g. due to illness or other unavoidable circumstances which can be evidenced - e.g. medical certificate), you may be eligible to sit a deferred examination at a later time.
Information on grounds for applying for deferred examinations can be viewed here:
https://my.uq.edu.au/information-and-services/manage-my-program/exams-and-assessment/deferring-exam
How to apply for a deferred exam can be found on the web at:
https://my.uq.edu.au/node/189/3#3
Please read this information very carefully before submitting your request.
Late submission
You will receive a mark of 0 if this assessment is submitted late.
There cannot be late submission. But deferral is possible.
Assignment 2
- Online
- Mode
- Written
- Category
- Tutorial/ Problem Set
- Weight
- 15%
- Due date
16/05/2025 1:00 pm
- Learning outcomes
- L02, L03, L04, L05
Task description
The assignment consists of various questions that assess the understanding and the ability to apply the concepts and models studied in class. Collection, presentation and understanding of data related to monetary problems may be also required.
Artificial Intelligence (AI) and Machine Translation (MT) are emerging tools that may support students in completing this assessment task. Students may appropriately use AI and/or MT in completing this assessment task. Students must clearly reference any use of AI or MT in each instance.
A failure to reference generative AI or MT use may constitute student misconduct under the Student Code of Conduct.
Submission guidelines
Online submission via the course Blackboard site.
Deferral or extension
You may be able to apply for an extension.
The maximum extension allowed is 7 days. Extensions are given in multiples of 24 hours.
Requests for the granting of extensions must be submitted through my.UQ: Applying for an extension - my.UQ - University of Queensland with supporting documentation before the submission due date/time, and this will be considered on a case-by-case basis. If an extension is approved, the new agreed date for submission will be noted on the application and the student notified through their student email. Extensions cannot exceed 7 days and cannot exceed the number of days you suffered from a medical condition, as stated on the medical certificate.
Late submission
A penalty of 10% of the maximum possible mark will be deducted per 24 hours from time submission is due for up to 7 days. After 7 days, you will receive a mark of 0.
Final exam
- In-person
- Mode
- Written
- Category
- Examination
- Weight
- 40%
- Due date
End of Semester Exam Period
7/06/2025 - 21/06/2025
- Learning outcomes
- L02, L03, L04
Task description
- This exam will cover material dealt with from Lecture 6 and Tutorial 6 (inclusive) onwards.
- The exam will consist of short answer, practical and problem solving questions.
- The exam will be in-person invigilated.
- Further details about the exam will be posted to our course BB site.
Exam details
| Planning time | 10 minutes |
|---|---|
| Duration | 120 minutes |
| Calculator options | (In person) Casio FX82 series only or UQ approved and labelled calculator |
| Open/closed book | Closed Book examination - no written materials permitted |
| Exam platform | Paper based |
| Invigilation | Invigilated in person |
Submission guidelines
Answers for each question need to be written within the space provided.
Deferral or extension
You may be able to defer this exam.
As per UQ rules.
Late submission
You will receive a mark of 0 if this assessment is submitted late.
Late submission is not possible. But deferral is available.
Course grading
Full criteria for each grade is available in the Assessment Procedure.
| Grade | Cut off Percent | Description |
|---|---|---|
| 1 (Low Fail) | 0% - 29% |
Absence of evidence of achievement of course learning outcomes. |
| 2 (Fail) | 30% - 46% |
Minimal evidence of achievement of course learning outcomes. |
| 3 (Marginal Fail) | 47% - 49% |
Demonstrated evidence of developing achievement of course learning outcomes |
| 4 (Pass) | 50% - 64% |
Demonstrated evidence of functional achievement of course learning outcomes. |
| 5 (Credit) | 65% - 74% |
Demonstrated evidence of proficient achievement of course learning outcomes. |
| 6 (Distinction) | 75% - 84% |
Demonstrated evidence of advanced achievement of course learning outcomes. |
| 7 (High Distinction) | 85% - 100% |
Demonstrated evidence of exceptional achievement of course learning outcomes. |
Additional course grading information
A student's final overall end of semester percentage mark will be rounded to determine their final grade. For example, 64.5% rounds to 65%, while 64.4% rounds to 64%.
Supplementary assessment
Supplementary assessment is available for this course.
Additional assessment information
Plagiarism
The School of Economics is committed to reducing the incidence of plagiarism. Further information on plagiarism, and how to avoid an allegation of plagiarism, is available in this course profile under Policies & Procedures. Please refer to theﾠAcademic Integrity Module (AIM). It is strongly recommended that you complete the AIM if you have not already done so.
SUBMISSION OF PROBLEM SET
Unless otherwise specified, all assignments must be lodged by the due date and time stated in the course profile and are to be submitted online via Blackboard.
Learning resources
You'll need the following resources to successfully complete the course. We've indicated below if you need a personal copy of the reading materials or your own item.
Library resources
Find the required and recommended resources for this course on the UQ Library website.
Other course materials
Recommended
| Item | Description | Further Requirement |
|---|---|---|
| Carl E. Walsh, 2010. "Monetary Theory and Policy, Third Edition," MIT Press Books, The MIT Press, edition 3, volume 1, number 0262013770, December. | ||
| Jordi Galí, 2015. "Monetary Policy, Inflation, and the Business Cycle: An Introduction to the New Keynesian Framework and Its Applications Second edition," Economics Books, Princeton University Press, edition 2, number 10495. |
Additional learning resources information
Lecture slides and additional notes will be provided through the course Blackboard site.
Learning activities
The learning activities for this course are outlined below. Learn more about the learning outcomes that apply to this course.
Filter activity type by
Please select
| Learning period | Activity type | Topic |
|---|---|---|
Week 1 (24 Feb - 02 Mar) |
Lecture |
Lecture 1: Introduction to Monetary Economics. Learning outcomes: L01, L03, L04, L05 |
Week 2 (03 Mar - 09 Mar) |
Lecture |
Lecture 2: Existence of Money & Currency Regimes. Learning outcomes: L01, L03, L04 |
Week 3 (10 Mar - 16 Mar) |
Lecture |
Lecture 3: Currency Regimes. Learning outcomes: L01, L03, L04 |
Week 4 (17 Mar - 23 Mar) |
Lecture |
Lecture 4: Neutrality, Superneutrality & Growth. Learning outcomes: L02, L03, L04 |
Week 5 (24 Mar - 30 Mar) |
Lecture |
Lecture 5: Optimal Inflation, Tobin & Seigniorage Learning outcomes: L02, L03, L04 |
Week 6 (31 Mar - 06 Apr) |
Lecture |
Lecture 6: Money in the Short Run. Learning outcomes: L02, L03, L04, L05 |
Week 7 (07 Apr - 13 Apr) |
Lecture |
In-Sem Exam The in-sem exam will take place during the Lecture time. Learning outcomes: L01, L02, L03, L04, L05 |
Week 8 (14 Apr - 20 Apr) |
Lecture |
Lecture 7: A New Keynesian Model. Note that Friday is Good Friday. Learning outcomes: L02, L04 |
Mid-sem break (21 Apr - 27 Apr) |
No student involvement (Breaks, information) |
Mid-Semester Break & Public Holiday(Easter Monday) No lecture or tutorials will run this week |
Week 9 (28 Apr - 04 May) |
Lecture |
Lecture 8: Monetary Policy in the Short Run. Learning outcomes: L02, L03, L04 |
Week 10 (05 May - 11 May) |
Lecture |
Lecture 9: Monetary Policy in the Open Economy. Note Monday 5 May is Labour Day. Learning outcomes: L02, L03, L04, L05 |
Week 11 (12 May - 18 May) |
Lecture |
Lecture 10: Time Inconsistency in Monetary Policy. Learning outcomes: L02, L03, L04 |
Week 12 (19 May - 25 May) |
Lecture |
Lecture 11: Solutions to the Time-Inconsistency Pr Learning outcomes: L02, L03, L04, L05 |
Week 13 (26 May - 01 Jun) |
Lecture |
Review Lecture Learning outcomes: L02, L03, L04, L05 |
Policies and procedures
University policies and procedures apply to all aspects of student life. As a UQ student, you must comply with University-wide and program-specific requirements, including the:
- Student Code of Conduct Policy
- Student Integrity and Misconduct Policy and Procedure
- Assessment Procedure
- Examinations Procedure
- Reasonable Adjustments - Students Policy and Procedure
Learn more about UQ policies on my.UQ and the Policy and Procedure Library.