Monetary economics

Monetary economics [EPOS]

Evidence

• Long-run and short-run correlations

• Early studies and Lucas' critique

• VARs and other approaches

  • Homework 1

• Ref: Walsh, C. E. (2010), "Monetary theory and policy," MIT Press, Cambridge, 3rd ed: Chapter 1.

Money demand and supply

• Liquidity preferences (Keynes)

• Modern portfolio theory (Tobin)

• Money supply

• Keynesian model

• Interest rates

• Modigliani&Miller and credit rationing

  • Homework 2

The transmission mechanisms

• Money view

• Credit view

  • Homework 3

DSGE approach

• DSGE view

• Linearization, difference equations, and RE

• RBC and the Classical Monetary Model

• New Keynesian Model

  • Homework 4

References

• Gali, J., Monetary Policy, Inflation and the Business Cycle: An Introduction to the New Keynesian Framework, Princeton University Press.

• Mishkin, F. S. (2013), The economics of money, banking & financial markets, Pearson, 12th ed: Chapter 3-5, 14, 19.

• Acocella, N., G. Di Bartolomeo, A. Hughes Hallett (2016), Macroeconomic paradigms and economic policy, Cambridge University Press, Chapter 4.