Monetary economics

Financial mathematics, First Cycle
3 year

Igor Masten

Hours per week – 2. semester:
Content (Syllabus outline)

Part I: Monetary theory
Basic model of money
International monetary system
Price suprises
Liquiduity and central banking
Central banking and the money supply
Money stock fluctuations
Fully backed central bank money
Bank risk
Deificit an public debt
Savings and investment
The effect of national debt on capital and savings
Part II: International monetary system and European monetary integration
Basic macroeconomic tools
Europe's exchange rate question
Optimum currency areas
European monetary system
European monetary union
Financial markets and the euro


Champ, B., S. Freeman: Modeling Monetary Economies, McGraw-Hill, 2006
Baldwin, R., C. Wyplosz: The Economics of European Integration, 3rd. ed. McGraw-Hill, 2009

Objectives and competences

Students will learn about:
Foundations of of monetary theory in dynamic micro-founded models.
Financial market mechanics.
Foundations of monetary policy
Institucional characteristics of international monetary systems.
Functioning of Europena monetary union.

Intended learning outcomes

Student prepared for graduate study of macroeconomic, monetary economics and international finance.

Learning and teaching methods

Lectures and seminars


2 midterms

Lecturer's references

BREZIGAR MASTEN, Arjana, MASTEN, Igor. CART-based selection of bankruptcy predictors for the logit model. Expert systems with applications, ISSN 0957-4174. [Print ed.], Sep. 2012, vol. 39, iss. 11, str. 10153-10159. [COBISS-SI-ID 20765670]
BREZIGAR MASTEN, Arjana, MASTEN, Igor. Predicting bankruptcy with semi-parametric single-index model. Ekonomska istraživanja, ISSN 1331-677X, 2012, vol. 25, no. 1, str. 121-133, tabele. [COBISS-SI-ID 20828902]
AHČAN, Aleš, MASTEN, Igor, POLANEC, Sašo, PERMAN, Mihael. Quantile approximations in auto-regressive portfolio models. Journal of Computational and Applied Mathematics, ISSN 0377-0427. [Print ed.], Feb 2011, vol. 235, iss. 8, str. 1976-1983 . [COBISS-SI-ID 19878630]
BREZIGAR MASTEN, Arjana, CORICELLI, Fabrizio, MASTEN, Igor. Financial integration and financial development in transition economies : what happens during financial crises?. Economic and business review, ISSN 1580-0466. [Tiskana izd.], 2011, vol. 13, no. 1/2, str. 119-137, ilustr. [COBISS-SI-ID 20551142]
BREZIGAR MASTEN, Arjana, MASTEN, Igor. Control of inflation on the road to the European Monetary Union : the case of Slovenia. Eastern European economics, ISSN 0012-8775, Nov./Dec. 2009, vol. 47, no. 6, str. 5-21. [COBISS-SI-ID 19134950]
DARBY, Julia, MELITZ, Jacques, MASTEN, Igor. Social spending and automatic stabilizers in the OECD. Economic policy, ISSN 0266-4658, Oct. 2008, no. 56, str. 715-756, tabele. [COBISS-SI-ID 20851942]
MASTEN, Igor. Optimal monetary policy with Balassa-Samuelson-type productivity shocks. Journal of comparative economics, ISSN 0147-5967, Mar. 2008, vol. 36, no. 1, str. 120-141. [COBISS-SI-ID 17695718]
BREZIGAR MASTEN, Arjana, CORICELLI, Fabrizio, MASTEN, Igor. Non-linear growth effects of financial development : does financial integration matter?. Journal of International Money and Finance, ISSN 0261-5606. [Print ed.], Mar. 2008, vol. 27, no. 2, str. 295-313. [COBISS-SI-ID 17689830]
CORICELLI, Fabrizio, JAZBEC, Boštjan, MASTEN, Igor. Exchange rate pass-through in EMU acceding countries : empirical analysis and policy implications. Journal of Banking & Finance, ISSN 0378-4266. [Print ed.], May 2006, vol. 30, no. 5, str. 1375-1391. [COBISS-SI-ID 16241894]
BANERJEE, Anindya, MARCELLINO, Massimiliano, MASTEN, Igor. Leading indicators for Euro-area inflation and GDP growth. Oxford bulletin of economics and statistics, ISSN 0305-9049, Oct. 2005, vol. 67, supp. 1, str. 785-813. [COBISS-SI-ID 15966182]
DAMIJAN, Jože, MASTEN, Igor. Time dependent efficiency of free trade agreements : the case of Slovenia and the CEFTA agreement. Economic and social review, ISSN 0012-9984, 2002, vol. 33, no. 1, str. 147-160. [COBISS-SI-ID 944526]
MASTEN, Igor. How important is the shock-absorbing role of the real exchange rate?. Economic and business review, ISSN 1580-0466. [Tiskana izd.], Oct. 2005, vol. 7, no. 3, str. 167-194, tabele, graf. prikazi. [COBISS-SI-ID 15888614]
CORICELLI, Fabrizio, JAZBEC, Boštjan, MASTEN, Igor. L'influence du régime de change sur l'inflation dans les pays adhérents. Economie & prévision, ISSN 0249-4744, 2004, no. 163, str. 51-61. [COBISS-SI-ID 15795174]
BANERJEE, Anindya, MARCELLINO, Massimiliano, MASTEN, Igor. Forecasting macroeconomix variables using diffusion indexes in short samples with structural change. V: RAPACH, David E. (ur.), WOHAR, Mark E. (ur.). Forecasting in the presence of structural breaks and model uncertainty, (Frontiers of economics and globalization, ISSN 1574-8715, 3). Bingley: Emerald, 2009, str. 150-194. [COBISS-SI-ID 18732262]
CORICELLI, Fabrizio, JAZBEC, Boštjan, MASTEN, Igor. Sources and obstacles for growth in transition countries : the role of credit. V: REINHART, Carmen M. (ur.), VÉGH GRAMONT, Carlos A. (ur.), VELASCO, Andrés (ur.). Money, crises, and transition : essays in honor of Guillermo A. Calvo. Cambridge (Mass.), London: MIT Press, 2009, str. 327-347. [COBISS-SI-ID 18732774]
BANERJEE, Anindya, MARCELLINO, Massimiliano, MASTEN, Igor. Forecasting macroeconic variables for the new member states. V: ARTIS, Michael (ur.), BANERJEE, Anindya (ur.), MARCELLINO, Massimiliano (ur.). The Central and Eastern European countries and the European Union. Cambridge: Cambridge University Press, 2006, str. 108-134. [COBISS-SI-ID 16234726]
CORICELLI, Fabrizio, JAZBEC, Boštjan, MASTEN, Igor. Behavior of nominal and real exchange rates in transition economies. V: MORALES ZUMAQUERO, Amalia (ur.). International macroeconomics : recent developments. New York: Nova Science, 2006, str. 285-308. [COBISS-SI-ID 17082086]