# Old "breaking news"

**May 13**

Slides for tomorrow will unfortunately not be avaiable before class. I will,
of course, upload them afterwards (including my hopefully feadble scribblings).

**May 13**

Last lecture

Tuesday, May 14, Lectures: Monetary policymaking and the recent crisis

1. The case for quantitative easing

Literature: A. J. Auerbach and M. Obstfeld (2005): "The Case for Open-Market
Purchases in a Liquidity Trap" *American Economic Review 95*, 110-137. (Can
be downloaded through the library.)

2. Brief talk about the exam

Remaining lectures (we unfortunately won't have time for the Christiano/Ikeda
paper - the material on Discretion versus committment in the New Keynesian Model
is important to finish up in a decent tempo).

Tuesday, May 7, Lectures: We finish "New-Keynesian models of monetary policy (II)" (slides
are the ones labelled April 30)

2. Commitment versus discretion

3. Extensions

Literature: Walsh (2010, Chapter 8, 352-378; including Appendix 8.6.2)

Tuesday, May 14, Lectures: Monetary policymaking and the recent crisis

1. The case for quantitative easing

Literature: A. J. Auerbach and M. Obstfeld (2005): "The Case for Open-Market
Purchases in a Liquidity Trap" *American Economic Review 95*, 110-137. (Can
be downloaded through the library.)

2. Brief talk about the exam

**April 28**

Tuesday, April 30, Lectures: New-Keynesian models of monetary policy (II) (slides
are ready)

0. "The uniqueness part from last lectures"

1. Policy trade-offs and optimal policy

2. Commitment versus discretion

3. Extensions

Literature: Walsh (2010, Chapter 8, 352-378; including Appendix 8.6.2)

Thursday, May 2 (extra classes), Exercises in class: QUESTION 2 from
Exam set 2011 in MakOk 3.

**Classes will be at 14.15-16.00 in our usual room, CSS 2.0.63**

Tuesday, May 7, Lectures: Monetary policymaking and the recent crisis (I)

1. The case for quantitative easing

Literature: A. J. Auerbach and M. Obstfeld (2005): "The Case for Open-Market
Purchases in a Liquidity Trap" *American Economic Review 95*, 110-137. (Can
be downloaded through the library.)

Tuesday, May 14, Lectures: Monetary policymaking and the recent crisis (II)

1. The case for capital injections into banks

Literature: L. Christiano and D. Ikeda (2012): "Government
Policy, Credit Markets and Economic Activity" Working Paper, Northwestern
University and NBER.

**March 15:**

If you are interested in getting a firmer "hands-on" grip on some of the
larger models of this course (e.g., the stochastic models of Chapters 2 and 3 as
well as extended versions of the New-Keynesian models we will cover at the end
of the course), then I can highly recommend you to attend this summer school in
July (the weather will in all likelihood suck):

Theoretical and Empirical Foundations of DSGE Modeling

Deadline for signing up is April 20.

**April 22**

Tuesday, April 23, Lectures: (slides are ready)

Interest rate policies (II)

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" - available here)

Thursday, April 25, Lectures: (slides are ready)

New-Keynesian models of monetary policy (I)

1. Model basics

2. Uniqueness?

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

**April 15**

Tuesday, April 16, Lectures: (slides are ready)

Interest rate policies (I)

1. Price level (in)determinacy

2. Liquidity traps

3. The term structure of interest rates

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

**April 10**

Next classes

Thursday, April 11, Lectures (slides are posted as
are two accompanying notes with some additional algebra)

1. Operating procedures and choice of monetary policy
instrument

2. Intermediate targets in policymaking

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

**April 9**

Tuesday, April 9, Exercises:

Exercise posted.

**April 1**

Tuesday, April 2, Lectures (slides are ready as is
a note on the optimal solution in the Barro-Gordon model)

Monetary credibility problems

1. Inflation and discretionary monetary policy

2. Reputational solution to credibility problems

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

**March 25**

Tuesday, March 26, Lectures: (slides are ready)

1. Money in the short run: Incomplete nominal adjustment (III)

Sticky Prices and
Wages: "Calvo" and alternatives

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

Tuesday, April 2, Lectures

Monetary credibility problems

1. Inflation and discretionary monetary policy

2. Reputational solution to credibility problems

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

**March 19**

Cancellation of classes today 14.15-16. SORRY!!!!

**March 10:**

Working schedule updated

**March 10/13:**

Next classes:

Tuesday, March 12, Lectures: (slides are ready)

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

Flexible prices and imperfect
information; the Lucas model

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

Thursday, March 14, Lectures: (slides are ready, as is
an accompanying technical note)

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

Sticky Prices and
Wages: Early models

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

**March 5:**

Next sessions:

Tuesday, March 5, Exercises:

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

**February 28:**

Today's sessions are unfortunately cancelled. We do the exercise on Tuesday.
This page will be updated soon.

**February 24:**

Next sessions:

Tuesday, February 26, Lectures:

1. Cash-in-Advance Models (slides are posted)

Literature: Walsh (2010, Chapter 3, pp. 91-115) (NB: Material on shopping-time
models "only" recommended)

**February 14:**

Next lectures:

Tuesday, February 19

0. Conclusion on Long-run superneutrality of money from
slides of February 14 (pages 14-18)

1. Money in the utility function (continued) (slides are posted)

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 (relive the) the linearization technique)

Tuesday, February 26

1. Cash-in-Advance Models

Literature: Walsh (2010, Chapter 3, pp. 91-115) (NB: Material on shopping-time
models "only" recommended)

Thursday, February 28

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

**February 11:**

Next lectures:

Tuesday, February 12 (slides are ready) (Bring the
book along to the lectures as we will look at some figures)

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?

2. Empirical problems/issues

Literature: Walsh (2010, Chapter 1)

Thursday, February 14 (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)

Tuesday, February 19

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 (relive the) the linearization technique)

**February 5: **Today's Introductory slides have been
posted.

**January 30:** The homepage of the course is up and running.

**January 30:** Next (and first) lecture will be on Tuesday, February 5 at
14.15 in CSS 2.0.63. This will be an introductory lecture to the course (d'uh).