# Old "breaking news"

**May 16:** The teaching note "Optimal Interest-Rate Setting in a Dynamic
IS/AS Model" has been updated (a typo has been corrected;
see the notes page for more info)

**Next classes**

Thursday, May 24, Last lectures: New-Keynesian models of monetary policy
(III) (slides are ready)

0. The commitment solution not covered on May 15 (last part
of the slides of that date).

1. Targeting regimes and instrument rules

2. Extensions

Literature: Walsh (2010, Chapter 8; pp. 364-378)

+ brief talk about the exam

Tuesday, May 15, Lectures: New-Keynesian models of monetary policy (II) (slides
are ready)

1. Policy trade-offs and optimal policy

2. Commitment versus discretion

Literature: Walsh (2010, Chapter 8, 352-364; including Appendix 8.6.2)

**May 8:** A list of typos in slides (not very long, and hopefully not
growing), is posted on the slides page.

**May 7:** There is **one last change in the plan** for the rest of the semester
(only in terms of reshuffling), so be sure that you have the
latest working schedule.

**Next classes**

Tuesday, May 8, Lectures: New-Keynesian models of monetary policy (I) (slides
are ready)

1. Model basics

2. Uniqueness?

Literature: Walsh (2010, Chapter 8, 329-352; including Appendix 8.6.1)

Thursday, May 10, Visit to
Danmarks Nationalbank (be
in lobby no later than 10.10)

Thursday, May 3, Lectures: Interest rate policies (II) (slides
are ready)

1. Optimal interest rate rule in simple model for policy
analysis

2. Application: Inflation targeting

Literature: Jensen (2011, "Optimal Interest-Rate Setting in a Dynamic IS/AS
Model" - see notes section)

Thursday, April 26, Lectures: Interest rate policies (I) (slides
are ready)

1. Price level (in)determinacy

2. Liquidity traps

3. The term structure of interest rates

Literature: Walsh (Chapter 10, pp. 453-475)

**April 11:**
The Internal Evaluation. Again, THANKS for partcipating. Your input is very
valuable!

**April 12:** The promised solutions to the cancelled exercises April 10
are ready. It is a note that is part of the curriculum,
so you should read it.

**Next classes**

Thursday, April 19, Lectures (slides are ready, as
are two accompanying notes with additional computations)

1.Operating procedures and choice of monetary policy
instrument

2.Intermediate targets in policymaking

Literature: Walsh (Chapter 11, pp. 512-530)

Tuesday, April 17, Exercises/interactive teaching:

Further solutions to credibility problems

1. Delegation and independent central banks

I will derive the solutions for the "Rogoff conservative
central bank," and "Walsh's incentive contract"

on the whiteboard - try computing them when reading the
curriculum before

Literature: Walsh (Chapter 7, pp. 297-323)

Thursday, April 12, Lectures (slides are ready)

Monetary credibility problems

1. Inflation and discretionary monetary policy

2. Reputational solution to credibility problems

Literature: Walsh (Chapter 7, pp. 269-290)

**CLASSES, EXERCISES, CANCELLED TODAY APRIL 10**

I WILL POST DETAILED ANALYTICAL AN GRAPHICAL SOLUTIONS ON THE WEB TOMORROW (AT
LATEST)

SORRY FOR LATE NOTICE. SORRY!!!!

**SEE YOU THURSDAY!!!! **

Tuesday, April 10, Excercises:

See exercise posted here.

Tuesday, April 3, Lectures:

Money in the short run: Incomplete nominal adjustment (III) (slides
are ready)

1. Sticky Prices and Wages: "Calvo" and alternatives

Literature: Walsh (Chapter 6, pp. 241-261 - plus relevant appendix)

Thursday, March 29, Lectures: (slides are ready, as is
an accompanying note that contains come derivations)

Money in the short run: Incomplete nominal adjustment (II)

1. Sticky Prices and Wages: Early models

Literature: Walsh (Chapter 6, pp. 225-241 - plus relevant appendix)

Tuesday, March 27, Lectures: (slides are ready)

Money in the short run: Incomplete nominal adjustment (I)

1. Flexible prices and imperfect information; the Lucas model

Literature: Walsh (Chapter 5, pp. 195-203 plus relevant appendix)

**March 17:** A note on the steady-state properties of the simple CIA
model can be found under notes.

**Next classes:**

Thursday, March 22:

Exercises:

"QUESTION 2" from June 15 exam, 2006 (CIA constraint on investment purchases)

Links to old exam questions are here at the bottom.

**Next classes:**

Tuesday, March 20: (slides are ready)

1. Cash-in-Advance models (stochastic case covered)

Literature: Walsh (2010, Chapter 3, pp. 108-115).

**March 14:** Updated working schedule is
uploaded that includes the announced extra sessions (especially for class
exercises), as well as the final date for our visit to Danmarks Nationalbank.

**March 5:** Note that
there are course evaluations in this week. If more than 17 respond, I'll
give refreshments to all at a later date (I know you have little to evaluate on
so far, but please join in and at least tell me a little about your expectations).

**March 8:** Next lectures and classes:

Thursday, March 15: (slides, named "March 8", are ready)

1. Shopping-time models (brief)

2. Cash-in-Advance Models (certainty)

Literature: Walsh (2010, Chapter 3, pp. 91-108)

**March 1:** Working schedule is updated.

**March 1**: Next lectures:

Tuesday, March 6: (slides are ready)

1. Money in the utility function (continued)

a. Welfare costs of inflation

b. Potential non-superneutrality of money

c. Dynamics and calibration

Literature: Walsh (2010, Chapter 2, pp. 52-86, so check the Appendix as well;
i.e., get a grip on the linearization technique)

February 9 - slides are ready

1. What are the "stylized facts" about money and economic aggregates?

Does money matter for output and prices?

Are the responses to money shocks different in the short and
long run?

Empirical problems/issues

Literature: Walsh (2010, Chapter 1)

March 1:** ** (spend some time in weeks 7/8 to get a grip on the
dynamic programming used in this lecture; e.g., check out the links to Peter
Ireland's notes linked to here) -
slides are ready

1.Money in the utility function (start)

a. The basic money-in-the-utility function model

b. Optimal behavior and steady-state equilibrium properties:

Long-run superneutrality of money

Literature: Walsh (2010, Chapter 2, pp. 33-52)