Economics 435: The Financial System

This site provides resources for students in Economics 435 at the University of Wisconsin, Madison for Fall 2019 Semester

Ten year minus three month Treasury spread, lagged one year (blue, left scale), implied probability of recession using probit model estimated 1986-2019 (red, right scale). NBER defined recession dates shaded gray; light green denotes forecast. Source: Federal Reserve Board, NBER, author's calculations.

Syllabus | Academic Misconduct | Important Dates | Downloadable Course Materials and Information Sources | Department of Economics Robert M. LaFollette School of Public Affairs |

LECTURE: MW 4:00PM - 5:15PM, SOC SCI 5231

Professor Menzie Chinn
Office Hours: MW (2:30-3:30) (provisional subject to change)
Office: 7418 Social Sciences Bldg.
Phone: (608) 262-7397
email: mchinn [at]
Home Page

Course Syllabus

Econ 435 Syllabus in PDF file.

This course will review the basics of monetary policy, including how the money supply is controlled and the role of the banking system. The course will then cover the principles of asset pricing, the role of collateral constraints and other informational problems in banking, and how those factors induce feedback loops in the macroeconomy. A portion of the course will address the analysis and implications of financial regulation or non-regulation, especially in regard to the financial crisis of 2008. Prerequisites: Econ 301/311 and 302/312, Econ 310. If you have completed Econ 410 with a prior statistics course other than 310, you can enroll with my assistance/authorization.

Notes Regarding Academic Misconduct

Academic Integrity is critical to maintaining fair and knowledge based learning at UW Madison. Academic dishonesty is a serious violation: it undermines the bonds of trust and honesty between members of our academic community, degrades the value of your degree and defrauds those who may eventually depend upon your knowledge and integrity. Examples of academic misconduct include, but are not limited to: cheating on an examination (copying from another student's paper, referring to materials on the exam other than those explicitly permitted, continuing to work on an exam after the time has expired, turning in an exam for regrading after making changes to the exam), copying the homework of someone else, submitting for credit work done by someone else, stealing examinations or course materials, tampering with the grade records or with another student's work, or knowingly and intentionally assisting another student in any of the above. The Dept. of Economics will deal with these offenses harshly following UWS14 procedures:

1. The penalty for misconduct in most cases will be removal from the course and a failing grade,

2. The department will inform the Dean of Students as required and additional sanctions may be applied.

3. The department will keep an internal record of misconduct incidents. This information will be made available to teaching faculty writing recommendation letters and to admission offices of the School of Business and Engineering.

If you think you see incidents of misconduct, you should tell your instructor about them, in which case they will take appropriate action and protect your identity. You could also choose to contact our administrator and your identity will be kept confidential.

Details here:

Important Dates

Course Materials and Sources of Economic Information

Downloadable Course Materials

Required On-line Readings

Additional Optional Readings

News Reports/Additional Readings

News Sources

Tracking the Crisis and Recession

Weblogs and Perspectives

Economics and Economic Policy Links

International Organizations

U.S. Government Agencies

Current and Historical Data

Economics 435 The Financial System / UW Madison / / 7 December 2019