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Monetary Policy and Banking track

The Monetary Policy and Banking track focuses on how monetary policy attempts to mitigate the risks of the financial economy. This track is 1 of 6 tracks you can opt for in our Master's in Economics.

Adress urgent problems that effect economies

This track provides you with an understanding of how monetary policy and financial institutions affect economic performance. But also on how economic models can be used in the current policy debate.

After finishing this track you will be able to contribute your knowledge and input in the debates that shape continental central banking institutions and share your own academic views on them.

Track-specific courses

Address urgent problems in the Euro zone, such as international financial supervision, microfinance, bank-runs and systemic risk, and taxation of financial institutions.

  • Monetary theory

    In this course you look at monetary economics through a theoretical lens. You will specifically explore a money-in-the-utility-function model, cash-in-advance models and a shopping-time model. Also you will learn about optimal monetary policy and look at New Keynesian monetary economics.

  • International Finance

    In this course you will study advanced topics in international financial and monetary relations, such as:

    • modern exchange-rate theories including target-zone models and speculative attack models;
    • recent currency crises and ways to prevent them;
    • exchange rate policies;
    • international capital mobility, capital flight, management of and capital controls;
    • the international spill-overs of unconventional monetary policy and the induced portfolio rebalancing.
  • Financial Institutions and Banking

    What are the key issues in bank management and the role of banks in the financial system? This is 1 of 2 core topics you will study in this course. You will learn about:

    • the major risks banks face;
    • spot lending and asymmetric information, credit rationing;
    • financial fragility and bank runs;
    • bank regulation. 

    The other core topic is the recent global financial crisis. How did it change the global financial system and the macroeconomy? We look at:

    • trends and cycles in the financial system;
    • policy responses to the crisis;
    • current challenges for policy makers. 
  • Public Finance and Fiscal Policy

    Get introduced to theory and empirics of fiscal policy and public finance. You will look at these subjects both from a short-run perspective (the business cycle) and the long-run perspective (sustainability and the intergenerational dimension).

    Learn how to apply different fiscal policy models and how to estimate policies. 

    Topics you will cover: 

    • Population ageing and long run sustainability of public finances
    • Tax smoothing
    • Intergenerational aspects of fiscal policy
    • EU debt crisis and EU fiscal framework
    • Theory and empirics of cyclical fiscal policy
    • Recente policy cases depending on what is topical at the moment of the course

Real life case: monetary policy in Europe

Monetary policy and the financial system played a central role in the 2008 credit crisis. The European Central Bank was a key player in stabilising the Eurozone in the following debt crisis.

We have realised that the financial system can work as a transmission channel through which problems in one country or sector can spread out and result in a worldwide recession. How to prevent this contagion? What is the role of expectations? And finally, how should monetary policy makers respond to these economic fluctuations?

Part of 'Whatever it takes' speech of Mario Draghi (President European Central Bank). In 2012 he announces the outright monetary transactions to dampen fluctuations in sovereign bond yields of Eurozone countries.

Up-to-date issues

Examples of current newspaper headlines and relevant issues that could be discussed in your classroom.

  • Does the transmission of monetary policy depend on inequalities within a country?
  • Should central banks care about cryptocurrencies such as Bitcoin?
  • Is the supply of public debt relevant for banks’ decisions to provide credit for firms’ long-term investments?

Career prospects

Graduates of the Master's programme in Economics/Monetary Policy and Banking track have excellent job prospects for positions as researchers and experts in:

  • commercial banks;
  • national central banks;
  • ECB, and other international banking institutions including the EIB, the World Bank, the IMF and the EBRD;
  • national governments;
  • international organisations such as the EU;
  • applied research institutes;
  • nationally or internationally oriented consultancy firms.

Monitary Policy and Banking and 5 other tracks

Monitary Policy and Banking is 1 of 6 tracks you can opt for in our MSc Economics. If you are more interested in another field of economics, read the info on 1 or more of the other tracks.