Old "breaking news"

 

May 23: Solutions to May 19 exercise (I will send persoal comments to those who have submitted early next week).

May 19: Excercise to be handed in electronically on May 19. Send the solution to my regular e-mail with "Solution to MonEc exercise" in the subject field. Again, to avoid any misunderstandings, this is completely volutarily.

UPDATE ON EXERCISE: I found a minor typo in the excercise: In the definition of the stochastic process of the natural rate of interest (rn hat), the hat is missing. If anyone want to resubmit their answer in light of this you are most welcome. Also if someone gave up due to that typo, I extend the deadline to May 22. Sorry about this.
 

 

 

May 16: Next (and last) classes:

Monday, May 19, Monetary policymaking and the recent crisis (slides are ready)
    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. Talk about the exam

 

 

May 12: Schedule is updated.

 

May 12: Next classes:
  
Wednesday, May 14, New-Keynesian models of monetary policy (II) - continued (slides are ready)
    2. Commitment versus discretion
    3. Extensions
Literature: Walsh (2010, Chapter 8, 352-378; including Appendix 8.6.2)

 


 

April 29: On May 12 you will get an assignment to be handed in electronically on May 19 (shortly thereafter the answers will posted). NOTE: This is a voluntary assignment, which has no bearing on exam participation or grading.
 
 

May 6: Next classes:
  

Monday, May 12, New-Keynesian models of monetary policy (II) (slides are ready)
    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)

 

Wednesday, May 14, 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.)

 

Monday, May 19, 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. (Can be downloaded from Chrisitiano's web page.)

 


 

May 2: Next classes:
  

Monday, May 5, Lectures: New-Keynesian models of monetary policy (I) (slides are ready as in an accompanying note)
    1. Model basics
    2. Uniqueness?
Literature: Walsh (2010, Chapter 8, 329-352; including Appendix 8.6.1)

 

April 29: Working schedule is updated.

 


April 29: Next classes:
  
Wednesday, April 30, Lectures: International Dimensions (slides are ready - labelled April 28)
    1. An example of international monetary policy coordination
Literature: Walsh (2010, Chap. 6, pp. 413-422). Read also Section 9.4 on the small open economy.
 

 


April 28: LECTURES ARE CANCELLED TODAY. STAY TUNED AND SEE YOU WEDNESDAY.

 

April 7: Advertisement(s):

  • I can fully reccommend students to sign up for the summer course on "Theoretical and Empirical Foundations of DSGE Modeling" There you will learn more on empirical (S)VAR modelling and get to use Dynare yourself for a number of applications of DSGE models. It is a great complement to this course.
  • Also, I offer an economic seminar in  Advanced Monetary Macro in the Fall, which should also be suitable to students wanting to work more independently with the material we have covered in this course (whether it materializes will depend on # of applications).
     

April 7: Internal course evalutation:

April 16: New FAQ entry.

 

April 25: Next classes:
  
Monday, April 28, Lectures: International Dimensions (slides are ready)
    1. An example of international monetary policy coordination
Literature: Walsh (2010, Chap. 6, pp. 413-422). Read also Section 9.4 on the small open economy.


Wednesday, April 30, Lectures: 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 14: Next classes:
  
Wednesday, April 16, 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 (2014), "Optimal Interest-Rate Setting in a Dynamic IS/AS Model" - available here)


April 11: Next classes:
  
Monday, April 14, Lectures: 
(I first end the April 7 slides on intermediate targets.)
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)


Wednesday, April 16, Lectures:
Interest rate policies (II)
    1. Optimal interest rate rule in simple model for policy analysis
    2. Application: Inflation targeting
Literature: Jensen (2014), "Optimal Interest-Rate Setting in a Dynamic IS/AS Model" - available here)


 

Friday, April 4: Next classes:
 
Monday, April 7, Lectures (slides are ready as well as two accompanying technical notes)
    1. Operating procedures and choice of monetary policy instrument
    2. Intermediate targets in policymaking
Literature: Walsh (Chapter 11, pp. 512-530)
 


April 2: Next classes


Wednesday, April 2, Excercises in class
    See excercise here.
    See solutions and a note on related literature (the note is curriculum)


March 28:

A FAQ on the exercise from last week has been posted. Many good questions. Thanks!

 

March 28: Next classes

Monday, March 31
(I start by concluding the slides from March 24 on the persistent effects of money shocks). Then (slides are ready),
 Money in the short run: Incomplete nominal adjustment (III)
    1. Sticky Prices and Wages: Calvo and alternatives
Literature: Walsh (Chapter 6, pp. 241-261 - plus relevant appendix)
 

Wednesday, April 2, Excercises in class
    See excercise here.

 
Monday, April 7, Lectures
    1. Operating procedures and choice of monetary policy instrument
    2. Intermediate targets in policymaking
Literature: Walsh (Chapter 11, pp. 512-530)

 


March 20:

I hope you managed to solve the "QUESTION 2" from June 15 exam, 2006 yesterday. As mentioned,you should check your attempts against the suggested answer also given on the web (link here).

I cannot emphasize enough that if you still have questions about the exercise, send them by e-mail within a week (don't be shy, I need to know whatever may not be clear to you), and I will condense them and provide the answers on the FAQ section.

 

March 20: Next classes

Monday, March 24 (slides are ready, as is an accompanying note with derivations too extensive to be included in the slides)
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 18: A new entry to the FAQ page has been posted!


 

March 18: Exercises in class ("QUESTION 2"from June 15 exam, 2006), Wednesday, March 19 are cancelled.
 

This should, however, not halt the aquirement of knowledge. So, you should use the time between 13.15 and 15 to go through the planned exam question ("QUESTION 2" from June 15 exam, 2006). You can do it by yourself or in groups. When done, you should check your attempts against the suggested answer also given on the web (link here).

If you still have questions about the exercise, send them by e-mail within a week (don't be shy, I need to know whatever may not be clear to you), and I will condense them and provide the answers on our FAQ section on the course home page.

 

March 18: Next classes

Monday, March 24
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 13: Next classes:

Monday, March 17
Incomplete nominal adjustment (I) (slides are ready)
    1. Flexible prices and imperfect information; the Lucas model
Literature: Walsh (Chapter 5, pp. 195-203 plus relevant appendix)
 

Wednesday, March 19
Exercises in class
    "QUESTION 2"from June 15 exam, 2006 (CIA constraint on investment purchases)
 

Monday, March 24
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 9: It's evaluation time the coming week (you should all receive e-mails on this from the proper authorities)! This is YOUR chance to state your opinions about the course and come with suggestions for improvements. Please provide feedback. It is better for me to get it now. At the final evaluation everything is too late. So please take a few minutes and fill out the forms; comments are particularly welcome. You don't have to write a novel, but a few words tell more than just pure tics in a questionnaire.
 
As we know, economics is all about incentives, so I provide refreshments for class if the number of respondents is equal to or greater than 20. Note that this is an unconditional commitment, and does not require positive evaluations.


March 9: The first entry to the FAQ page has been posted!

 


 

 

March 6: Next classes:
 

Monday, March 10:
I conclude the material on equilibrium seigniorage (from p. 14 and onwards in slides of March 5). Then:
Seigniorage, inflation and optimal taxation (slides are ready)
    1. Optimal taxation and seigniorage
    2. Robustness of the Friedman rule?
Literature: Walsh (Chapter 4, pp. 170-184; pp. 188-91)
 

Monday, March 17
Incomplete nominal adjustment (I)
    1. Flexible prices and imperfect information; the Lucas model
Literature: Walsh (Chapter 5, pp. 195-203 plus relevant appendix)
 

Wednesday, March 19
Exercises in class
    "QUESTION 2"from June 15 exam, 2006 (CIA constraint on investment purchases)

 

March 6: The codes for the simulation of the stochastic CIA model have been uploaded.
 

 


 

March 4:

Next classes:
 

Wednesday, March 5:
I wrap up the stochastic CIA model (show the dynamic simulation), and then:
Public budget accounting and seigniorage (slides are ready)
    1. Public budget accounting, inflation and debt
    2. Equilibrium seigniorage
Literature: Walsh (Chapter 4, pp. 135-162)

 


February 26: Updated schedule is posted.


February 26:

Next classes:
 
Monday, March 3:
1. Cash-in-Advance Models (slides are ready)
Literature: Walsh (2010, Chapter 3, pp. 91-115) (NB: Material on shopping-time models "only" recommended)


Wednesday, March 5:
Public budget accounting and seigniorage
    1. Public budget accounting, inflation and debt
    2. Equilibrium seigniorage
Literature: Walsh (Chapter 4, pp. 135-162)
 

Monday, March 10:
Seigniorage, inflation and optimal taxation
    1. Optimal taxation and seigniorage
    2. Robustness of the Friedman rule?
Literature: Walsh (Chapter 4, pp. 170-184; pp. 188-91)

 

February 24: Codes behind the impulse-response figures shown at lectures on MIU model are available here.

 


February 24: Updated schedule will be posted a.s.a.p

 

February 24:

Next classes:

Monday, February 24
1. Money in the utility function (continued) (slides are ready)
    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 (or relive the) the linearization technique)


February 19:

Lectures today in 2.1.12 are unfortunately cancelled. See you all Monday 24

 


February 13:

Next classes:

Monday, February 17
We continue:
1. Money in the utility function (start) (slides)
    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)
 

Wednesday, 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 (or relive the) the linearization technique)
 

 


 

February 5:

Next classes

February 10
We conclude the Feb. 3 slides on (S)VAR modelling, and proceed to
1. Money in the utility function (start) (slides are ready)
    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)
 

Monday, February 17
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 (or relive the) the linearization technique)
 

 


February 3:
Today's slides have been posted.


February 3:
Next classes, February 5 (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?
2. Empirical problems/issues
Literature: Walsh (2010, Chapter 1)

 


January 24:
You are seing this page for the first time.


January 24:
We meet for the first time to an introductory lecture on Monday, February 3, 13.15 in CSS 7-0-22