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0023100710-4 Monetary Economics Kong Danfeng (孔丹凤) 金融数学 2011 级 39 人 授课对象 留学生 2 人（荷兰、意大利） 本单元或章节的教学目的与要求 Chapter 5 The Behavior of Interest Rates

月 日（ ） 授课+讨论 Professor 18 周 周 3 中心理综楼 208

This chapter introduces one of these basic economic principles: the theory of asset demand. This theory indicates that there are four primary factors that influence people’s decisions to hold assets: wealth, expected returns, risk, and liquidity. It is used continually throughout the study of money and banking and makes it much easier for the student to understand how interest rates are determined, how banks manage their assets and liabilities, why financial innovation takes place, how prices are determined in the stock market and the foreign exchange market, and how various theories explain the demand for money. One teaching device that I have found helps students develop their intuition is the use of summary tables such as Table 1 in class. I use the blackboard to write a list of changes in variables that affect the demand for an asset and then ask students to fill in the table by reasoning how demand responds to each change. Chapter 5 goes on to lay out two partial equilibrium approaches to the determination of interest rates: supply and demand in the bond market and the liquidity preference framework (supply and demand in the money market). As is made clear in this chapter, these approaches are not inconsistent with each other but are two different and useful ways of looking at the same thing. An important feature of the analysis in this chapter is that supply and demand is always done in terms of stocks of assets, not in terms of flows. Another important feature of this chapter is that it lays out supply and demand analysis of the bond and money markets at a similar level to that found in principles of economics textbooks. This chapter is also designed to show the student how useful economic analysis can be. The Following the Financial News box illustrates that the supply and demand analysis in this chapter is used in the real world to solve a practical problem—forecasting interest rates. The “Reading the Wall Street Journal” applications on the Credit Markets column shows students how they can use the concepts they have learned to understand material that they can read about every day.

授课主要内容及学时分配 Chapter 5 The Behavior of Interest Rates 

Determinants of Asset Demand Wealth Expected Returns Risk Liquidity Theory of Asset Demand

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Supply and Demand in the Bond Market Demand Curve Supply Curve Market Equilibrium Supply and Demand Analysis 1

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Changes in the Equilibrium Interest Rate Shifts in the Demand for Bonds Shifts in the Supply of Bonds

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Supply and Demand in the Market for Money: The Liquidity Preference Framework:

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Changes in Equilibrium Interest Rates in the Liquidity Preference Framework Shifts in the Demand for Money Shifts in the Supply of Money

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Summary

重点、难点及对学生的要求（掌握、熟悉、了解、自学）  Why Study Money and Monetary Policy? Money and Business Cycles Money and Inflation Money and Interest Rates Conduct of Monetary Policy Fiscal Policy and Monetary Policy

主要外语词汇 Chapter 5 The Behavior of Interest Rates Asset market approach Supply curve Excess supply

Fisher effect excess demand market equilibrium

risk demand curve liquidity preference framework wealth expected return

liquidity theory of asset demand opportunity cost

辅助教学情况（多媒体课件、板书、绘图、标本、示教等） 多媒体课件、板书 课程网站资源 http://www.course.sdu.edu.cn/G2S/Template/View.aspx?action=view&courseType=0&courseId=325 复习思考题 Chapter 5 The Behavior of Interest Rates 1. Explain why you would be more or less willing to buy a share of Microsoft stock in the following situations: a. Your wealth falls. b. You expect the stock to appreciate m value. c. The bond market becomes more liquid. d. You expect gold to appreciate in value. e. Prices in the bond market become more volatile. 2. Explain why you would be more or less willing to buy a house under the following circumstances a. You just inherited $100,000. b. Real estate commissions fall from 6 % of the sales price to 5% of the sales price. c. You expect Microsoft stock to double in value next year. d. Prices in the stock market become more volatile. e. You expect housing prices to fall. 3. Explain why you would be more or less willing to buy gold under the following circumstances: 2

a. Gold again becomes acceptable as a medium of exchange. b. Prices m the gold market become more volatile. c. You expect inflation to rise, and gold prices tend to move with the aggregate price level. d. You expect interest rates to rise. 4. Explain why you would be more or less willing to buy long- term AT&T bonds under the following circumstances: a. Trading in these bonds increases, making them easier to sell b. You expect a bear market in stocks (stock prices are expected to decline) . c. Brokerage commissions on stocks fall. d. You expect interest rates to rise. e Brokerage commissions on bonds fall 5. What would happen to the demand for Rembrandt paintings if the stock market undergoes a boom? Why? Answer each question by drawing the appropriate supply and demand diagrams. 6. An important way in which the Federal Reserve decreases the money supply is by selling bonds to the public. Using a supply and demand analysis for bonds, show what effect this action has on interest rates. Is your answer consistent with what you would expect to find with the liquidity preference framework? 7. Using both the liquidity preference framework and the supply and demand for bonds framework, show why interest rates are procyc1ica1 (rising when the economy is expanding and failing during recessions) 8. Why should a rise in the price level (but not in expected inflation) cause interest rates to rise when the nomina1 money supply is fixed? 9. Find the "Credit Markets" column in the Wall Street journal. Underline the statements in the column that explain bond price movements, and draw the appropriate supply and demand diagrams that support these statements. 10. What effect will a sudden increase m the volatility of gold prices have on interest rates? 11. How might a sudden increase in people's expectations of future real estate prices affect interest rates? 12. Explain what effect a large federal deficit might have on interest rates. 13. Using both the supply and demand for bonds and liquidity preference frameworks, show what the effect is on interest rates when the riskiness of bonds rises. Are the results the same in the two frameworks? 14. If the price level falls next year, remaining fixed thereafter, and the money supply is fixed, what is likely to happen to interest rates over the next two years? (Hint: Take account of both the price-level effect and the expected-inflation effect) 15. Will there be an effect on interest rates if brokerage commissions on stocks fall? Explain your answer Using Economic Analysis to Predict the Future 16. The president of the United States announces in a press conference that he will fight the higher inflation rate with a new anti-inflation program. Predict what will happen to interest rates if the public believes him 17. The chairman of the Fed announces that interest rates will rise sharply next year, and the market believes him. What will happen to today's interest rate on AT&T bonds, such as the 818s of 2022? 18. Predict what will happen to interest rates if the public suddenly expects a large increase in stock prices. 19. Predict what will happen to interest rates if prices in the bond market become more volatile. 20. If the next chair of the Federal Reserve Board has a reputation for advocating an even slower rate of money growth than the current chair. what will happen to interest rates? Discuss the possible resulting situations.

参考教材（资料） 1、Frederic S. Mishkin, The Economics of Money, Banking, and Financial Markets, 8th Edition, Pearson Education, 2007. 2、米什金，《货币金融学（中文版）》（第九版）（郑艳文、荆国勇译），中国人民大学出版社，2011 年。 3、姜旭朝、胡金焱、孔丹凤，《货币经济学》（第二版），经济科学出版社，2008 年。 3

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