Welcome to the home page for Makěk3, Fall 2012 (Blok 2)

Business cycles and monetary stabilization policies

Henrik Jensen
Department of Economics
K°benhavns Universitet

It is crucial to access this page on a regular basis (so bookmark it now), as I use this page, and not the Absalon page, as the learning tool during the course. This is for the simple reason that Absalon is closed for the public, and I am a strong believer in openness in teaching (in particular at a publicly funded university). I hope this will not be a source of inconvenience for you; actually, one can navigate through this single page at warp speed (and without logging in).

On this page you can access the following areas:

Breaking News
Schedule and contact information
About the course and main curriculum
Lecture slides, exercises, notes, etc.
Various links

A separate page accumulates "Old news" - a collection of the Breaking News posted during the course.

Breaking News

May 17

        The grades from the re-exam.


March 13

           The exam question with suggested answers
           The grades. 90% passed, which I think is exceptionally good! You did very, very well!!!


January 24

A clarification to the solution set to the 2012 exam:
Page 7, 4th to last line reads "thereby increasing the real interest rate, demand, output gap". This is an incomplete sentence, which should read "thereby increasing the real interest rate, dampening demand, output gap" (as the previous is about how the policy rule dampens the expansionary effect on demand, output gap and inflation of the shock to the natural rate of interest).


January 17

There is a typo in the solution set to the 2012 exam:
Page 6: In the numerator of the identified coefficient A, kappa should be the inverse kappa. This mistake is brought onto the next page where the solution for the output gap is written.


January 16:

Advice about the exam.


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Schedule and contact information

Lectures and exercises are done by Henrik Jensen on the following occasions:

Mondays 9-12, in Aud 10 (these will be for lectures)

Tuesdays 13-16 in Aud 4 (these will be mainly for exercises)

Note that all slots start 15 minutes past the hour. Depending upon the contents and progress of the classes, we may take two breaks during the sessions, or just one (and end earlier).

Also note that when we have exercises, I expect "audience participation" in the sense that YOU should also be active at the blackboard (you learn more that way, than just scribbling down what I write). 

The working schedule for the course.
The updated schedule (January 6, 2013)

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About the course and main curriculum

The official course description is found here (pdf, 60 Kb).

The main material is the book by Jordi GalÝ: "Monetary Policy, Inflation, and the Business Cycle: An Introduction to the New Keynesian Framework" Princeton University Press, 2008. This is a "must have"! It is available at "Polyteknisk Boghandel i Biocentret" as of now (according to my source). We will also use a few articles listed in the working schedule at the end of the course.

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Lecture slides, exercises, notes, etc.

Lecture slides

November 19: Introductory lecture

November 20: A Classical Monetary Model  

November 26 (and December 3): The Basic New Keynesian Model (additional material, including heuristic figures of the dynamics and roots, is posted in the Notes section)

November 3 and 10: Monetary Policy Design in the Basic New Keynesian Model

November 17 (and January 7): Monetary Policy Tradeoffs

January 7 and 14: Sticky Wages

Exercises and exam sets

Exam in MakOk3, January 2011. The Set; The suggested answers (note a typo on p. 6: 9 lines from the bottom, the term less than one should not have αx in the numerator).
Exam in International Monetary Economics, Freie Universitńt Berlin, January 2012. The Set, The suggested answers. (Note that this set is for a two-hour exam, and contains some on open-economy matters that we have not covered.

Exercises done January 8, 15 and 16 have been removed per request (December 28, 2016).



On stable and unstable roots in the simple New-Keynesian Model (December 4)

Getting to page 31 in GalÝ (2008) (December 4)

Proof of Lemma 2 from the appendix to Chapter 4 in GalÝ (2008) (December 4)

Complete financial markets and consumption risk sharing (January 2)

Typos in lecture slides (updated January 15).

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Various links

Jordi GalÝ, author of our textbook.

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Suggestions concerning the page: Henrik Jensen.

Created: November 13, 2012
Last edited: December 28, 2016

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