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
Having successfully completed this module you will be able to:
- Evaluate the welfare implications of various monetary policies in the context of macroeconomic stabilization.
- Apply dynamic macroeconomic economic theory to the analysis of monetary phenomena;
- Demonstrate knowledge and understanding of the role of monetary policy in macroeconomic context, and of how monetary policy affects real variables
The module builds on dynamic stochastic 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, 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
Learning and Teaching
|Total study time||100|
Resources & Reading list
Other course information available via blackboard.
(2015). Monetary Policy, Inflation and the Business Cycle. Princeton: Princeton University Press.
Marks will be based on coursework (worth 20%, 2 homework assignments) engagement activities (quizzes and/or discussions on lectures and coursework) and a final take home assignment (worth 70%). The grade of the coursework and of the online activities will not count for a resit exam. The homework assignments 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 assignment.
This is how we’ll formally assess what you have learned in this module.
|Attendance and engagement||10%|
This is how we’ll assess you if you don’t meet the criteria to pass this module.
An internal repeat is where you take all of your modules again, including any you passed. An external repeat is where you only re-take the modules you failed.