Macro Policy Games

Short Course in Macroeconomic Policy Games

DIW Berlin, May 2018

Martin Bodenstein

Federal Reserve Board

E-mail: Martin.Bodenstein@gmail.com

Web page: https://sites.google.com/site/martinbodenstein/

Course Description

This is a short topics course in Macroeconomics. I will discuss setting up and solving games under cooperation and open-loop Nash strategies in dynamics stochastic general equilibrium (DSGE) models and I introduce a Matlab-based toolbox that facilitates the computation of equilibria in medium to large-scale models using perturbation techniques. In illustrating the toolbox, I focus on the open economy aspects of monetary policy.

Course material

The current version of the lecture notes is posted here. (Last update: May 24, 2018!)

Link to underlying paper and toolbox.

Links to additional references:

• Benigno, G. and P. Benigno (2006). Designing targeting rules for international monetary policy cooperation. Journal of Monetary Economics 53(3), 473–506.

• Benigno, P. and M. Woodford (2012). Linear-quadratic approximation of optimal policy problems. Journal of Economic Theory 147(1), 1–42.

• Corsetti, G., L. Dedola, and S. Leduc (2010). Optimal Monetary Policy in Open Economies. In B. M. Friedman and M. Woodford (Eds.), Handbook of Monetary Economics, Volume 3 of Handbook of Monetary Economics, Chapter 16, pp. 861–933. Elsevier.