This session covers Lecture 9: The World That Bagehot Knew From the nineteenth-century international gold standard, we can draw insights that apply to the globally financialized world of today. We learn about the origins of monetary policy in the discount mechanism and the manipulation of the discount rate. This lecture connects up with the Walter …

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This session covers Lecture 10: Dealers and Liquid Security Markets This lecture is all about dealers. It emphasizes the concept of "market liquidity" as distinct from "funding liquidity" and introduces the Treynor model of the economics of the dealer function. We're starting by looking at security dealers, but we'll be using this model for the …

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This session covers Reading 5: Three chapters from A Market Theory of Money by John Hicks (1989) In these three chapters, Hicks starts with the idea that the primary function of money is to serve as a "standard of value" for the market. From there, he argues that the institution of banking as market making …

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