Dr Pontus Rendahl, room 32L.2.33; Dr Roman Sustek, Room 32L.2.19

This course is available on the MPA in European Public and Economic Policy, MPA in International Development, MPA in Public Policy and Management, MPA in Public and Economic Policy, MPA in Public and Social Policy, MSc in Econometrics and Mathematical Economics, MSc in Economics and MSc in Economics (2 Year Programme). This course is available with permission as an outside option to students on other programmes where regulations permit.

Students must have completed Introductory Course in Mathematics and Statistics (EC400).

The course aims to develop the student's ability to undertake research in monetary economics by studying a number of current issues both theoretical and applied. We discuss alternative frameworks to examine the interaction between money, liquidity, public policy and the aggregate economic activity. Those approaches include reduced form approaches of money-in-utility, cash-in-advance, and dynamic sticky price models. We also discuss price level determinacy and alternative approaches such as fiscal theory of the price level. The substantive issues to be addressed include determination of inflation, optimal inflation rate, interaction between fiscal and monetary policy, transmission of monetary policy, liquidity traps, forward guidance, and quantitative easing. The course then proceeds to introduce students to the so-called dynamic stochastic general equilibrium models used for monetary policy analysis and the study of business cycles. The course concludes with a coverage of the basics of asset pricing theory in general equilibrium and the models of the yield curve. 

20 hours of lectures and 8 hours of seminars in the MT. 20 hours of lectures and 10 hours of seminars in the LT. 2 hours of seminars in the ST.

A reading list will be handed out by the lecturers at the beginning of their sessions.

Exam (50%, duration: 3 hours) in the main exam period.
Essay (50%, 6000 words) in the ST.