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Durham University

Postgraduate Modules 2019/2020

Module Description

Please ensure you check the module availability box for each module outline, as not all modules will run in each academic year. Each module description relates to the year indicated in the module availability box. Please be aware that modules may change from year to year, and may be amended to take account of, for example: changing staff expertise, disciplinary developments, the requirements of external bodies and partners, and student feedback.

No such Code for pgprog: L1K509

Department: Economics and Finance

ECON42015: Money and Banking

Type Tied Level 4 Credits 15 Availability Available in 2019/20
Tied to L1K509
Tied to L1T109 Economics
Tied to L1T209 Public Economics
Tied to L1T309 Experimental Economics
Tied to L1T409 Environmental & Natural Resource Economics
Tied to N3K609 Finance (International Banking and Finance)


  • None


  • EITHER Advanced Financial Theory (ECON41215) OR Advanced Macroeconomics (ECON44815 or ECON41715)

Excluded Combination of Modules

  • None


  • give students a sound knowledge of the transmission mechanism of monetary policy via traditional channels, the balance sheet channel, and the bank lending channel
  • introduce students to various theories of firm and consumer behaviour under capital market imperfections
  • give students an in-depth understanding of the ways in which economic analysis can be used to formulate models of financial decisions
  • show students how these models can be tested
  • show students how the outcomes of these tests contribute to the understanding of monetary and financial transmission mechanisms


  • Topic 1: Monetary policy transmission
  • 1.1 Traditional channels of transmission of monetary policy
  • 1.2 The credit channel
  • 1.2.1 The balance sheet channel
  • 1.2.2 The bank lending channel
  • Topic 2: The financial system and the corporate sector
  • 2.1 Capital market imperfections and investment decisions
  • 2.1.1 The Q model approach
  • 2.1.2 The Euler equation approach
  • 2.1.3 The error correction specification approach and other approaches
  • 2.2 Capital market imperfections and inventory accumulation decisions
  • 2.2.1 The reduced form approach
  • 2.2.2 The linear quadratic model approach
  • 2.3 Capital market imperfections and other aspects of firm behaviour
  • Topic 3: The financial system and the personal sector: capital market imperfections and consumption

Learning Outcomes

Subject-specific Knowledge:
  • ability to build on core macroeconomic understanding to explore monetary and financial economics
  • detailed understanding of various topical issues in the field of monetary and financial economics
  • comprehensive grasp of underpinnings of monetary policy analysis
Subject-specific Skills:
  • ability to apply core advanced economic theory and quantitative methods to applied topics in financial and monetary economics
  • ability to identify appropriate economic models to analyse monetary and financial problems
  • ability to apply advanced mathematical, statistical and graphical techniques in an appropriate manner
  • ability to justify conclusions using economic arguments with appropriate rigour
Key Skills:
  • ability to show understanding of advanced analytical methods, both theory- and model- based
  • ability to show understanding of relevant mathematical and statistical techniques
  • ability to reason logically and work analytically
  • ability to work with abstract concepts and in a context of generality
  • ability to select and apply appropriate techniques to solve problems
  • ability to understand the contexts in which problems are addressed
  • ability to communicate effectively and clearly in written and oral formats

Modes of Teaching, Learning and Assessment and how these contribute to the learning outcomes of the module

  • A combination of lectures, seminars and guided reading will contribute to achieving the aims and learning outcomes of this module. Summative assessment by written examination will test students' knowledge and understanding of the subject-matter and their ability to apply relevant problem-solving and analytical skills.

Teaching Methods and Contact Hours

Activity Number Frequency Duration Total/Hours
Lectures 9 1 per week 2 hours 18
Seminars 4 1 per fortnight 1 hour 4
Preparation & Reading 126
Revision session 1 2 hours 2
Total 150

Summative Assessment

Component: Examination Component Weighting: 100%
Element Length / duration Element Weighting Resit Opportunity
Unseen Written Examination 2 hours 100% Same

Formative Assessment:

Work prepared by students for seminars, which will include answers to pre-assigned questions; there will also be discussion of pre-assigned readings.

Attendance at all activities marked with this symbol will be monitored. Students who fail to attend these activities, or to complete the summative or formative assessment specified above, will be subject to the procedures defined in the University's General Regulation V, and may be required to leave the University

    If you have a question about Durham's modular degree programmes, please visit our User Guide. If you have a question about modular programmes that is not covered by the User Guide, or a query about the Postgraduate Module Handbook, please contact us using the Comments and Questions form below.