[Forside] [Hovedområder] [Perioder] [Udannelser] [Alle kurser på en side]
LEARNING OBJECTIVES:
· Analyze and explain issues in the choice of instruments of monetary policy
· explain the issue and some solutions to the problem of time inconsistency in
monetary policy
· analyze and explain the idea and the working of different versions of the new Keynesian model of optimal monetary policy
· discuss and analyze various reasons for and models of the credit channel and bubbles in financial markets
· analyze and explain in a simple model the effects of various forms of the
interaction between monetary and fiscal policy
· discuss economic experiences of the European Monetary Union related to the monetary policy of the ECB and the fiscal policies of the member countries.
COURSE DESCRIPTION:
The course deals with problems and models of (domestic) monetary policy and some issues of financial markets.
COURSE SUBJECT AREAS:
I Policy and empirical issues overview
history and policy issues (literature I.1)
II Monetary policy: Instruments and information
instruments, intermediate targets and information (literature II.1)
III Monetary policy: Time inconsistency
discretionary policy (literature III.1)
some solutions to the inflation bias (literature III.1)
IV Monetary policy: Inflation targeting
the classical monetary model (literature IV.1)
the new Keynesian model (literature IV.1)
monetary policy (literature IV.1)
other or more elaborate models (literature IV.1, 2 and 3)
learning (literature IV.4)
other issues (literature IV.5)
V The credit channel and bubbles
the credit channel (literature V.1)
bubbles (literature V.2, 3 and 4)
VI Monetary unions: monetary and fiscal policies
interaction of policies
discretionary policies
committed policies
monetary versus fiscal leadership (literature VI.1)
VII The Eurozone
the Optimum Currency Area (OCA) discussion
the Stability and Growth Pact (SGP)
the monetary policy of the ECB (literature VII.1).
REQUIRED COURSES:
7005: Macro 1 and 7500: Macro 2.
LECTURER:
Claus Vastrup.
TEACHING METHOD:
4 weekly lectures during one semester (48 lectures in total).
LITERATURE:
Ad I
1. Mishkin, F.S., 2006. Monetary Policy Strategy: How did we get here? NBER WP 12515 (25 pages).
Ad II
1. Walsh, C.E., 2003. Monetary Theory and Policy, 2nd edition. MIT Press, Mass., Chapter 9.1-9.3 (20 pages).
Ad III
1. Walsh, Chapter 8 (58 pages).
Ad IV
1. Gali, J., 2008. Monetary Policy, Inflation, and the Business Cycle. Princeton,
Chapters 1-6, 8 (155 pages).
2. Ball, L., N.G. Mankiw and R. Reis, 2005. Monetary Policy for inattentive
economies. Journal of Monetary Economics 52, 703-725 (23 pages).
3. Blanchard, O. and J. Gali, 2008. Labor Markets and Monetary Policy : A New
Keynesian Model with Unemployment. NBER WP 13897 (42 pages).
4. Evans, G. and S. Honkapohja, 2008. Expectations, Learning, and Monetary
Policy: An Overview of Recent Research. Central Bank of Chile, WP 501 (24
pages).
5. Walsh, C.E., 2008. Inflation targeting: What have we learned? From Carl E. Walsh's web-site (34 pages).
Ad V
1. Walsh, Chapter 7 (40 pages).
2. Brunnermeier, M.K., 2008. Bubbles. From Brunnermeier's web-site (15 pages).
3. Lorenzoni, G., 2007. Inefficient Credit Booms. NBER WP 13639 (25 pages).
4. Caballero, R.J., E. Farhi and M.L. Hammour, 2006. Speculative Growth: Hints from the U.S. Economy. The American Economic Review, 96 (4), 1159-1192 (33 pages).
Ad VI
1. Lambertini, L., (2006). Monetary-Fiscal Interactions with a conservative central bank. Scottish Journal of Political Economy, 53, 90-127 (39 pages).
Ad VII
1. Wyplosz C., 2006. European Monetary Union: the dark sides of a major success.
Economic Policy (April) 46, 207-261 (55 pages).
A total of 588 pages. Plus max 20 pages supplementary literature.
FORM OF ASSESSMENT:
4 hours written exam.
EXAMINATION AIDS ALLOWED:
None - except for a dictionary from English to the student's mother tongue, which includes English-Danish dictionaries. No electronic dictionaries are allowed.
