ECON6032 Topics in Macroeconomics
The module will introduce students to the monetary economics literature and in particular to New Keynesian framework which is at the heart of the medium-scale models used by many central banks. The core of the module will focus on the relationship between the inflation dynamics, the business cycle and the design of monetary policy.
Aims and Objectives
To introduce students to the monetary economics literature and in particular to the New Keynesian framework which is at the heart of the medium-scale models used by many central banks. The core of the module will focus on the relationship between the inflation dynamics, the business cycle and the design of monetary policy. We may also introduce some extensions of the basic framework to the open economy case and to models with financial or labor market frictions
Having successfully completed this module you will be able to:
- Demonstrate knowledge and understanding of the role of monetary policy in macroeconomic context, and of how monetary policy affects real variables
- Apply dynamic macroeconomic economic theory to the analysis of monetary phenomena;
- Evaluate the welfare implications of various monetary policies in the context of macroeconomic stabilization.
The module builds on dynamic general equilibrium models with nominal rigidities and emphasises the role of forward looking rational agents. Topics include general equilibrium models such as real business cycle models, models with prices set one period in advance and models with sticky prices. The design of optimal monetary policy and the welfare effects of simple monetary policy rules are also analysed. The topics covered include: The Classical Monetary Model The Basic New Keynesian Model The Design of Monetary Policy Extensions.
Learning and Teaching
|Total study time||100|
Resources & Reading list
Monetary Policy, Inflation and the Business Cycle.
Other course information available via blackboard.
Grade will be based on coursework (2 homeworks, worth 5% each) and a final exam (worth 90%). The grade of the coursework will not count for a resit exam. The homeworks are due on the specified dates, before the lecture starts. Students are allowed to work in groups, but each one must submit her/his own individual homework.
|Exam (2 hours)||80%|