This is an advanced course in monetary economics, given at the master's level (also for students of our Models & Methods in Quantitative Economics QEM programme). It is addressed to students with interest in central bank policies, economic modeling and research.
We discuss emprical and structural models used in academia and policy institutions to analayze monetary policy. Topics covered include the monetary transmission mechanism, optimal monetary policy, the role of nominal and information frictions for central banks, monetary policy under zero lower bound constraints and the natural rate of interest. The class is complemented with computer exercises.
Introduction and course outline
Transmission of monetary policy
The Money in Utility Framework and the Friedman rule
The New Keynesian Model and optimal monetary policy
Sources of non-neutrality - the role of nominal and information frictions
Monetary policy at the effective lower bound
Computer codes will be handed to students in class.