This course provides a framework for studying the role of money in the economy and the institutional characteristics of the banking system and financial markets. Topics include: the theory and evidence on demand for money, control of money supply and goals and tools of monetary policy, interest rate determination and term structure of interest rates, bank management and operation of the banking system, financial innovation, bank regulation and deregulation, and the linkage between money and economic activity. To maintain a balance between theory and policy, the course will combine theoretical formalism with empirical investigations of the regularities of the monetary economy.