1. 1
COURSE TITLE: Monetary Theory and Policy ECO 323
SESSION PERIOD: YEAR 3 SEMESTER 2
Lecturer: Mr Mpande,D
Lecturer’s E-mail: mpandedaniel.edu@gmail.com
Prerequisites
• None
Teaching Methods:
Teaching methods will be centred on lecture sessions and case study sessions. Seminars and tutorials will
be used to augment these methods.
COURSE AIMS
The aims of this course is to give you in-depth understanding of monetary policy analysis as regards
• Fundamental concept of monetary policy
• To familiarize students with monetary policy instruments and types
• To stimulate student‘s knowledge on changes in the value of money
• To make the students to understand supply and demand for money.
• To expose the students to rudimentary analysis of other Keynesian approaches of demand for
money.
COURSE OBJECTIVES
At the end of the course period, the students are expected to be able to:
• Define and understand the meaning of monetary policy
• Know the objectives or goals of monetary policy
• Define and understand the Full Employment and Economic Growth
• Understand the relationship between Full Employment, Price Stability and Balance of
Payment.
• Understand Price Stability and Balance of Payment
• Define and understand the term Targets of Monetary Policy
• Understand the meaning of Market yield on Equity
• Know the basic indicators of Monetary Policy
• Define and understand monetary strategies in Zambia
• Understand Effectiveness of monetary policy in Zambia
• Understand the overview and framework for monetary policy in Zambia
2. 2
• Define and understand the meaning of macroeconomics as a field of study
• Know the basic macroeconomics concepts
• History of Monetary Policy
• Understand the role of monetary policy in a developing economy
• Know the limitations of monetary policy in less developing countries.
• Understand Keynes reformulated quantity theory of money
• Know the superiority of the Keynesian theory over the traditional quantity theory of money
• Know the criticisms of Keynes theory of money and prices
• Define and understand the concepts and measures of money supply
• Know the important facts about measures of money supply
• Know the Keynesian approach to demand for money
• Understand the motives of holding money
• Define and understand the Post Keynesian approach of demand for money
• Know the tobin‘s portfolio and baumol‘s inventory approach to demand for money
STUDENT LEARNING OUTCOMES
To complete this course you are required to go through the study units and other related materials. You
will also need to undertake practical exercises for which you need a pen, a notebook and other materials
that will be listed in this guide. The exercises are to aid you in understanding the basic concept and
principles being taught in this course.
COURSE OUTLINE
TOPIC ONE: ANALYSIS OF MONETARY POLICY
Unit One: Meaning of Monetary Policy
Unit Two: Trade-off in Monetary Goals
Unit Three: Targets of Monetary Policy
Unit Four: Strategies and Effectiveness of Monetary Policy Implementation in Zambia
TOPIC TWO: MONETARY POLICY: INSTRUMENTS AND TYPES
Unit One: Instruments of Monetary Policy
Unit Two: Expansionary Monetary Policy Vs Restrictive Monetary Policy
Unit Three: Lag in Monetary Policy
Unit Four: Role of Monetary Policy in a Developing Economy
TOPIC THREE: CHANGES IN THE VALUE OF MONEY: THE QUANTITY THEORY OF
MONEY AND ITS VARIANTS
Unit One: Value Of Money
3. 3
Unit Two: The Cambridge Equations: The Cash Balance Approach
Unit Three: The Keynesian Theory of Money and Price
Unit Four: Friedman‘s Restatement of Quantity Theory of Money and Supply of Money
TOPIC FOUR: SUPPLY AND DEMAND FOR MONEY
UNIT ONE Money Supply
UNIT TWO Determinants of Money Supply
UNIT THREE Supply of Money and High-Powered Money
UNIT FOUR High Powered Money and Money Multiplier
UNIT FIVE Demand for Money
TOPIC FIVE OTHER KEYNESIAN APPROACHES OF DEMAND FOR MONEY
UNIT ONE The Post Keynesian Approach
UNIT TWO Friedman‘s Theory of Demand for Money
Prescribed Books
Adesoji, J.J., (2014). Introduction to Monetary Policy, 4th edition, Dale Publication limited. Adewuyi,
A.A., (2012). Monetary Policy and the Economy, a textbook, 1st edition, Meridian Publication limited.
Adewunmi, L. K., (2014). Analysis of Demand for Money in an inflationary economy, Journal vol 3,
Jillion Publication limited.
Bala, A.Z., (2014). Monetary Theory and Policy, 2nd edition, University Publication limited. Becker, B.
R., (2012). Money and Banking, 3rd edition Forensic Publication limited Jhingan, M.L (2004) Monetary
Economics, 6th edition, Vrinda Publication Limited.
Kelechi, I. U., (2016). Monetary Economics, 1st edition, Jaen Publication Limited.
Leon, K. M., (2014). Monetary Economics, a broader perspective, 1st edition, Nilly Publication limited.
Recommended Books
Dotun, G. G., (2014). Money and Banking, 1st edition, Dale Publication limited Faradiza, S.D., (2016).
Introduction to Monetary Policy, 1st edition, Parkers Publisher George, H.F., (2014). Monetary Policy, an
engine to economy development in Nigeria. Journal vol 3, pg 71-88, Macmilliano Press.
4. 4
Graded Coursework, assignments and examinations
ASSESSMENT COMMENTS % OF FINAL GRADE
Continuous Assessment (CA 1) 10%
CA 2 10%
Test 20%
Teamwork -
Presentations -
FINAL EXAM 60%
TOTAL POINTS 100%