The aim of the course is to provide a good knowledge and understanding of the effect of monetary policy on output and inflation relying on dynamic general equilibrium models of the economy. Competence is developed regarding: i) the monetary transmission mechanism; ii) financial frictions in credit markets; iii) the objectives and instruments of monetary policy with an emphasis on targeting regimes and policy rules; iv) operating procedures of monetary policy. Students will develop the basic skills for monetary economic analysis with special attention to the modeling of empirical results, the analysis of policy issues and their resolution.
First Part - New Keynesian Monetary Economics Empirical Evidence I: Money, Inflation and Output, Sticky Prices and the Monetary Transmission Mechanism Monetary Policy Analysis in New Keynesian Models Targeting Regimes and Policy Rules
Second Part - Monetary Policy and Financial Markets Financial Frictions and the Credit Channel Monetary Policy and Operating Procedures The Term Structure of Interest Rates Empirical Evidence II: Money, Inflation and Output
Prerequisiti e modalità di esame
Written exam (approximately 1 hour and 30 minutes). The exam covers all the topics presented during lectures and it consists of a series of open-ended questions which may include calculations and/or explanation and/or technical analysis. The exam aims to verify that the course objectives have been achieved; i.e. that students have learned the theory, and know how to use macroeconomic concepts to interpret economic events and data, and to analyze simple policy issues.
Lectures and seminars. Power point presentations will generally be available on the Ariel website the same day of each lecture.
Materiale didattico e bibliografia
Textbook: Walsh, Carl E., Monetary Theory and Policy (3rd edition), MIT press, 2010. Chapters: 1, 6, 8, 10, 11. Further readings will be indicated on the course webpage.