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© UNIVERSITY OF LEEDS
(Semester 1, 2021/2022) Assessed Coursework
LUBS3430 Modern Theories of Money and Monetary Policy
- There are 2 sections to this assignment: Section A and Section B
- Section A is worth 50% marks.
- Section B is worth 50% marks.
- Answer ONE question from Section A, and ONE question from Section B.
- All questions are worth equal marks.
- Money can be seen as developing from a competitive market process or through an authority imposing taxes. Explain and critically assess these two views on the nature and origin of money.
- Discuss the two main tenets of the endogenous money theory, namely
that ‘loans create deposits’ and that ‘deposits generate reserves’ and their policy implications. Illustrate your answer using relevant diagrams and/or a balance sheet approach.
- Describe the monetary policy transmission mechanism in the New Consensus Macroeconomics (NCM) model. What are the crucial assumptions behind the different stages of this transmission mechanism?
- “Stability – or tranquillity is destabilising”. Discuss this statement and its policy implications, using Minsky’s financial instability hypothesis. Illustrate your answer using relevant diagrams.
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The deadline date for this assignment is 12:00:00 noon on Thursday 6th January 2022.
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P. Arestis and M.C. Sawyer (eds.), A handbook of alternative monetary economics , 2006 (Econ F-0 ARE;
G. Fontana and M. Setterfield (eds.), Macroeconomic theory and macroeconomic pedagogy , Palgrave MacMillan, Forthcoming December 2008.
K. Bain and P. Howells, Monetary economics : policy and its theoretical basis , 2003 (Econ F-3 BAI)
W. Carlin and D. Soskice, Macroeconomics : imperfections, institutions, and policies , 2006 (Econ D-50 CAR)
J. Handa, Monetary economics , 2000 (Econ F-3 HAN)
M. Setterfield (ed.), Complexity, endogenous money and macroeconomic theory : essays in honour of Basil J. Moore , 2006 (Econ D-10 MOO)
M. Woodford, Interest and prices : foundations of a theory of monetary policy (Econ F-0 WOO)
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