Monetary and Fiscal Policy over the Business Cycle

Taught at the Paris School of Economics, Campus MSE ( APE Program


NEW: Take-home exam, 2017.    Deadline Monday January 23 at 23.59.59.


 1.Typewrite your answers in Scientific Word/Latex or Word. Send pdf file to by email with subject line: "Exam 2016-2017 APE"

2. Work strictly inside your own group of TWO persons! Cross-group communication (which is very easy to spot from the answers) will result in a drastic downward adjustment of the grades of all members of involved groups. Yes, really.

Course Outline and Readings

There is no single textbook for this course, but two (excellent) useful textbooks containing complementary material are Michael Woodford's encyclopedic "Interest and Prices", (which is the book I refer to most often for these topics) and Jordi Gali's "Monetary Policy, Inflation, and the Business Cycle ...".

Lecture notes: 

Monetary and Fiscal Policy with Monopolistic Competition and Sticky Prices

(Errata for Chapter 5)

Simple financial frictions and heterogeneity: hand-to-mouth, limited asset markets participation. Dynamics, monetary and fiscal policy.

Fiscal Policy

Zero Lower Bound and Liquidity Traps: Saving, Borrowing, Sunspots. Fiscal and Monetary Policy in a Liquidity Trap.

Free Entry

Slides used to summarize my papers with Ghironi and Melitz