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Money and Banking
1. To define the concepts of demand and supply of money.
2. To comprehend the causes and measures of controlling inflation and deflation.
3. To acquaint the students with the working of commercial banks and central bank.
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Course |
Learning outcome (at course level) |
Learning and teaching strategies |
Assessment Strategies |
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Course Code |
Course Title |
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24DECO 501C |
Money and Banking (Theory) |
Students will: CO37: comprehend various aspects related to money, inflation and deflation. CO38: analyze different approaches to demand for and supply of money and different quantity theories of money. CO39: analyze working of commercial banks and cooperative banks. CO40: analyze the working of central bank and monetary policy CO41: explore the working of Development Banking Financial Institutions of India. CO42: contribute effectively in course-specific interaction. |
Approach in teaching: Interactive Lectures, Discussion, Case studies
Learning activities for the students: Presentations, Assignments and Group discussions |
Class activity, Assignments and Semester end examinations |
- Barter economy, evolution of money, monetary standards
- Definition, classification and functions of money;
- Change in Value of money Inflation - definition, types; causes, effects and measures to control;
- Trade-off between inflation and unemployment;
- Deflation; meaning and effects
- Inflation versus Deflation.
- Demand for Money – Classical & Keynesian Approaches
- Measurement of money supply (narrowly defined, broadly defined & RBI’s measures); H theory of money supply
- Quantity Theory of Money-
- Cash Transactions approach – Fisher’s Equation of Exchange, criticisms
- Cash Balance approach – Marshall, Pigou, Robertson, Keynes’ equations
- Superiority of Cash balance approach over Cash transactions approach.
- Keynesian approach
- Commercial Banks - functions
- The process of credit creation; Purpose & Limitations
- Liabilities and assets of banks;
- Role of commercial banks in economic development
- Cooperative Banks – features, types & structure and problems
- Central Bank -functions;Instruments of credit control – quantitative & qualitative
- Role of Central Bank in economic development
- Relationship between Central Bank and commercial banks
- RBI-organization and promotional role.
- Monetary policy: objectives
- Organizational structure of financial institutions; IFCI, SFCs, IDBI, SIDBI – role & functions.
- Mutual Funds – concept and types; UTI & money market mutual funds; Insurance Companies – LIC & GIC – role & functions; Miscellaneous nonbanking financial intermediaries – loan companies, investment companies, hire purchase finance, lease finance, housing finance
- Gupta, S.B., Monetary Economics-Institutions,Theory&Policy.S.Chand& Co. 2013
- Seth, M.L., Monetary Economics, LaxmiNarainAgrawal, 2020
Suggested Readings:
- Sundaram, K.P.M., Money, Banking, & International Trade. Sultan Chand & Company, 2010.
- Rangarajan, C. Indian Economics: Essays on Money and Finance, UBS Publishers, 1999.
- Mithani, D.M., Money, Banking, International Trade & Public Finance. Himalayan Publishers, 2012.
E-Resources:
- https://youtu.be/Ye5hH6ku1L8
- https://www.rbi.org.in/Scripts/OccasionalPublications.aspx?head=RBI%27s%20Functions%20and%20Working
- https://epgp.inflibnet.ac.in/Home/ViewSubject?catid=NEp/xikgBgNtfA+sgFQAcA
Journals:
- Journal of Money, Banking and Finance
https://www.esijournals.com/jmbf
- Journal of Financial Economics
https://inomics.com/institution/journal-of-financial-economics-1389700
