There is growing recognition that central banks play an important role in financial markets and the financial system, not only in terms of setting short term interest rates, but also derived from the role of central bank money (liquidity). The overall objective of this course is to enhance students’ understanding of this emerging topic and to stimulate to research. To that end, we will study papers that shed light on the role of money in the financial system, the functioning of the market for liquidity, how it interacts with the broader financial markets, and the impact of central bank policies, including collateral policy. Class sessions will focus on selected empirical and theoretical papers and also introduce relevant institutional material. The course is suited for students that have completed basic PhD level core courses in finance or economics and have an interest in conducting research in the topics of the course or related areas. Assessment is in the form of a research proposal and class presentations.
The course is topic oriented. The objective is to deepen understanding by studying theoretical, empirical, and institutional texts that relate to the general topic of the course: money, central banks, and financial markets.
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