Financial Markets and Monetary Policy

7.5 Credits
First Cycle
School of Culture and Society
Subject field
Economics (NAA)
Group of Subjects
Disciplinary Domain
Social Science, 100%
This course can be included in the following main field(s) of study
Progression indicator within (each) main field of study
Approved, 11 March 2021.
This syllabus is valid from 08 June 2021.

Learning Outcomes

On completion of this course students will be able to:
  • Explain the short- and long-term effects of monetary policy. (1)
  • Explain the functions of a central bank, i.e. its actions and reactions and how it implements its policies. (2)
  • Explain the formation of short- and long-term interest rates. (3)
  • Explain interest rate parity. (4)
  • Explain the pricing of the most common instruments used in the market to deal with risks. (5)
  • Explain why regulations of the financial system is important for the stability of the financial market. (6)
  • Explain and discuss problems concerning financial markets and monetary policy in both written and oral form. (7)

Course Content

The course covers the role of the financial market in the economy of society; international dependency and its effects on the financial markets for a small open economy; the formation of short- and long term interest rates; and an analysis of the transmission mechanism, the action and  reaction functions of central banks, and the effects of their monetary policies in both fixed and flexible exchange rate systems. 


Written examination, 4 credits (examines learning outcomes 1–6)
Written report, peer review (opposition) and active participation in seminars, 3.5 credits (examines learning outcome 7)

Forms of Study

Lectures and seminars


The Swedish grades U–VG.

Written report assignement U – G
The written examination determines the final grade.


  • General entry requirements and Mathematics 3b or 3c or Mathematics C, Social Sciences 1b or 1a1+1a2, English 6

Other Information

Replaces NA1034.