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IKT3014Monetary Theory and Policy3+0+0ECTS:4
Year / SemesterSpring Semester
Level of CourseFirst Cycle
Status Elective
Prerequisites and co-requisitesNone
Mode of Delivery
Contact Hours14 weeks - 3 hours of lectures per week
LecturerDoç. Dr. İbrahim AL
Language of instructionTurkish
Professional practise ( internship ) None
The aim of the course:
The course aims to provide the students with a general knowledge on monetary theory and policy.
Learning OutcomesCTPOTOA
Upon successful completion of the course, the students will be able to :
LO - 1 : gain information fundamental conceptions, process and methods about money market, monetary theory and policy.2,6
LO - 2 : understand that the logic of money markets, the description of money supply and its determinants, money demands theories, the aims and instruments of monetary policy and fiscal policies.2,6
LO - 3 : determine the money supply by the aid of balance sheets of CB and dep.banks, the money multiplication, money demand and interest rates, the using of mon. pol. Instr., monetary transm. mech. and money and fiscal policy appl..2,6
LO - 4 : analyze the interaction mechanisms between financial sector and real sector by using technics which learned in monetary theory and policy courses and macroeconomics especially for Turkish economy and other economies.2,6
LO - 5 : attain the results that they are able to use by institutions that they implement economic stabilisation measures and monetary policy.2,6
CTPO : Contribution to programme outcomes, TOA :Type of assessment (1: written exam, 2: Oral exam, 3: Homework assignment, 4: Laboratory exercise/exam, 5: Seminar / presentation, 6: Term paper), LO : Learning Outcome

Contents of the Course
Monetary theory and policy tools, an overview of the financial mechanism, interest rate determination and the working of the capital market, analysis of the demand and supply of money. monetary transmission mechanism and monetary approach to balance of payments, selected macro models in which money appears as an endogenous variable, special applications to Turkey.
Course Syllabus
 WeekSubjectRelated Notes / Files
 Week 1Meaning, features and occuring and kinds of Money
 Week 2Functions of money and definition of money suply
 Week 3Functions of financial markets, basic structure and instruments of financial markets
 Week 4Functions of financial intermediation, mainly financial institutions and financial institutions in Turkey
 Week 5Cental Bank of Republic of Turkey, commercial banks, İstanbul Stock Exchange Market, bankers and other financial institutions.
 Week 6Definition of money suply and the role of central bank (theoretical definition of money suply and CBRT definition of money suply
 Week 7Process of money suply (deposits, loan, and money multipliers)
 Week 8Theories of the demand for money (Neo-classical Quantity Theory : Fisher approach and Cambridge approach)
 Week 9Mid-term exam
 Week 10Modern quantity theory (Chicago approach of Neo-classical school) and Keynesian money demand theory
 Week 11Basic structure, goals and instruments of monetary policy
 Week 12Strategies of monetary policy (exchange rate targeting, monetary targeting, inflation targeting)
 Week 13The applications of monetary policies in Turkey since 1923
 Week 14Monetary and fiscal policies, real and nominal sectors and IS-LM analysis, inefficiency of moneary and fiscal policies (crowding out)
 Week 15Macroeconomic general balance analysis: according to different economic schools transmitions mechanism (general balance analysis in Keynesian and Classical systems)
 Week 16End-of-term exam
Textbook / Material
1Özyurt, H. 2015; Para Teorisi ve Politikası, Aksakal Kitabevi, Trabzon
Recommended Reading
1Keyder, N. 2012; Para Teori-Politika-Uygulama, Seçkin Yayıncılık ve Dağıtım, Ankara
Method of Assessment
Type of assessmentWeek NoDate

Duration (hours)Weight (%)
Mid-term exam 9 4/2024 50
End-of-term exam 16 6/2024 50
Student Work Load and its Distribution
Type of workDuration (hours pw)

No of weeks / Number of activity

Hours in total per term
Yüz yüze eğitim 3 14 42
Sınıf dışı çalışma 4 14 56
Arasınav için hazırlık 10 1 10
Arasınav 1 1 1
Dönem sonu sınavı için hazırlık 10 1 10
Dönem sonu sınavı 1 1 1
Total work load120