This course analyzes how savers and borrowers meet in financial markets to allocate resources to their most productive uses. Major topics include the theory of pricing of financial assets, equilibrium determination of asset prices, risk and term structures of interest rates, how moral hazard and adverse selection inhibit credit allocation, fundamentals of commercial banking, and central bank policies.

This course analyzes how savers and borrowers meet in financial markets to allocate resources to their most productive uses. Major topics include the theory of pricing of financial assets, equilibrium determination of asset prices, risk and term structures of interest rates, how moral hazard and adverse selection inhibit credit allocation, fundamentals of commercial banking, and central bank policies.