MONEY, BANKING AND PUBLIC FINANCE (NKOZI JAN 2023)

Uganda Martyrs University BAM

Course Outline

Lecturer:Mr Odoki Richard

Contact:0782-333463/0702-433463

E-mail: rodoki@umu.ac.ug

Course name:        Money, Banking and Public Finance

Course code:                   3210

Level of course:     111 Semester 11

Credit units:                     4 CU

Brief course description

The course covers the role of money and the role of financial system, i.e. the meaning, origins, types, properties, demand, supply, monetary tools and the relationship between money and inflation, exchange rate and interest rates, the nature and qualities of money, commercial banking, operation and controls of central banks such as Bank of Uganda, money and credit circulation and creation, financial markets and their structure, services and the various instruments involved and effects of monetary policies.               

It also covers the economic role of governments in market economies in respect of government expenditure and revenue. Public goods and their characteristics, the structure of the principles of Uganda taxes and current reform proposals.

Objectives

1.    To expose students to a body of monetary theory concepts

2.    To analyze and explain the money market, banking and government setting

3.    To discuss the various forces that interact in the money and goods market, government incomes and expenditure

4.    To explain monetary policies, fiscal policies and decisions

Learning outcomes

By the end of this course students should be able to:

1.    Develop the literature by extending their understanding of monetary theory concepts

2.    Come up with well-informed money/fiscal policy and financial intermediaries’ decisions

3.    Apply the knowledge to investigate the relationship between various forces that interact in the money and goods market as well as government incomes and expenditure

4.   Improve on their skills, and apply these skills appropriately and accurately in the money and goods market context.

Detailed course description (contents)

Money                    (9 hours)

·         Definition of money

·         Evolution of money from barter trade

·         Characteristics of money

·         Functions of money

·         Types of money

·         Money Theories

·         Measures of money

Banking  (12 hours)

·         Commercial banking

·         Organization and structure of commercial banks

·         Functions of commercial banks

·         Balance sheet of commercial banks

·         Commercial bank policies and principles

ü  Portfolio management: objectives and theories of portfolio management

ü  Investment policy of a commercial bank

ü  Essentials of a sound bank system

·         Credit creation by commercial banks

·         Credit Instruments

·         The Central Bank and Instruments of credit:

·         Central Bank: An apex Financial Authority

·         Functions of a Central Bank

·         Central Bank and Monetary Management

·         Instruments of credit control

Public finance                            (10 hours)

·         Meaning scope and importance of public finance

·         The principle of maximum social advantage

·         Taxes

·         Incidence and effect of taxes

·         Taxable capacity

·         Canons, effects and growth of public expenditure

·         Public debt

·         Public goods, private goods, and market failure

·         Theories of taxation

Financial Markets (7 hours)

·         Nature and Functions of Financial Markets

·         Money Markets

·         Capital Markets

·         Insurance Markets

·         Distinction between Money Markets and Capital Markets

Monetary Policy               (8 hours)

·         Objectives of monetary policy

·         Instruments of Monetary Policy

·         Expansionary monetary policy

·         Restrictive monetary policy

·         Role of Monetary policy in Developing Economies

·         Limitations of monetary policy

Development Banks                   (5 hours)

·         Concept of Development Banks

·         Types of Development Banks

·         The role of development Banks

Financial Sector     (9 hours)

·         Hicks-Hansen (IS/LM) Function: General Equilibrium of product and money Markets

·         The product Market Equilibrium

·         The Money Market Equilibrium

·         Changes in General Equilibrium

·         Financial Intermediation

·         Role of financial Intermediation

·         Non-Banking Financial Intermediation and role of NBFI

·         Distinction between Banks and NBFI

Mode of delivery

Lectures

Tutorials

Online lectures

Group discussions

Mode of assessment

Individual assignment       15%

Test                                       15%

Group Presentation             20%

Final exam                            50%

Total                                      100%

References

Eshag, E. (1985) Fiscal and monetary policies and problems in developing countries. 2^nd edtion. Cambridge:University press.

Ghatak, S. (1995) Monetary economics in developing countries. 2^nd edition. Great Britain: Macmillan press

Onoh, J. K. (1982) Money and banking in Africa. Great Britain: Longman group Ltd.

Waish, C. (2003) Monetary Theory and Policy.  2^nd edition. London: MIT Press Cambridge, Massachusetts.

Combie, M. (2007) Issues in Finance and Monetary Policy,  London: Palgrave, Macmillan.

Jhingan, M. L. (2011) Money,  Banking, International Trade and Public Finance. 8^th edition . India: Vrinda publication LTD

Howells, P., And Bain, K. (2007) Financial Markets and Institutions. 5^th edition. USA: Pearson Education LTD