MONEY AND BANKING

FIRST WEEK: MONEY

1. Barter economy and monetary economy. Money in the Blanchard-Fisher-Wicksell model.
2.Money demand for transaction purposes: the Baumol-Tobin model.
3. A review of expected utility.
4. Money demand for “speculative” reasons: the Tobin model.
5. Money demand for precautionary reasons: the Whalen model.

SECOND WEEK: INTRODUCTION TO THE FUNCTIONING OF THE FINANCIAL MARKETS

6. Operators in surplus and in deficit. Direct and indirect finance.
7. The most common types of financial contracts: bonds and stocks.
8. The role of collateral
9. Modigliani Miller Theorem

THIRD WEEK: ASYMMETRIC INFORMATION IN FINANCE

10. Introduction to asymmetric information: moral hazard and adverse selection.
11. Deviations from Modigliani- Miller Theorem.
12. Moral hazard in finance: Relationship between direct and indirect finance: Diamond 1991 model (file DIAMOND_JPE_1991.pdf; schema_razionamento_Diamond.doc)
13. Adverse selection in finance: and example with the Tirole model of firm sale
14. Adverse selection in finance: credit rationing in the Stiglitz-Weiss model

FOURTH WEEK: ASSET PRICING

15. The efficient market hypothesis. That is “what everyone knows is not worth knowing”. (file: efficient_mkt_hp.ppt)
16. The Gordon growth model
17. The wisdom of crowds? The jar experiment
18. How financial markets function if prices do or do not reveal information. An introduction to the Grossman-Stiglitz paradox.
19. Volatility and market efficiency: Shiller model, too much volatility for market efficiency (file: Efficient_mkt_hp_against.pdf)
20. Volatility and market efficiency are consistent in Gordon model. (file: Efficient_mkt_hp_in_favor.pdf)

FIFTH WEEK: THE 2007-200? FINANCIAL CRISIS

21. Facts. Origins. Explanations. Policies
22. Speculative Bubbles (files rational_bubbles.pdf; , another_way_to_establish_rational_bubbles.ppt Bolle speculative_parigi.ppt)
23. Credit expansion and bubbles (file Moral hazard and bubbles.pptx)
24. Value at risk and leverage (file Adrian and Shin.ppt)


SIXTH WEEK: CRISIS AND SECURTIZATION

25. Securitization (file Securitized banking and the run on the repo)
26. Structured finance: an example of CDOs (file Coval, Jurek, Stafford)
27. Liquidity crisis: when everybody runs for the exit (file: Pedersen.ppt)
28. Consequences of financial crises (Crisis_consequences.ppt)
29. Public debt and crisis (file: reinhart_rogoff_revisited.jpg)
30. Diabolic loop (file:Diabolic_loop.pptx)
31. Dr. Li’s formula (file: What went wrong with securitization.pptx)

SEVENTH WEEK: FINANCIAL AGENCY

32. Corporate Governance: control benefits and ownership structure: the model by Jensen-Meckling. (JENSEN_MECKLING. doc)
33. Salaries of CEOs (from Wall Street journal on line) and in the financial sector (Philippon_reshef.ppt)
34. Control through minority ownership structures. The model by Bechuck. (file BEBCHUCK_ET_AL.pdf)
35. Ownership structure around the world; La Porta et al. (file: la_porta_ownership_around.pdf)

Schedule subject to minor changes.