Pre-Requisites. ⢠Macroeconomics II. ⢠A bit of time series (useful). ⢠A bit of optimization theory (required). ⢠A lot of common sense. ⢠And a LOT of work. 7 ...
• Lectures: Ô Tuesday: 8:15-10:00 am (UNIS-A027) Ô Thursday: 8:15-10:00 am (UNIS-A027)
• Website: http://fabcol.free.fr/montheo Ô Slides, Lecture Notes, Class Notes Ô Homeworks.
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Tutorials
• Tutorials: • My Role: Only guide you through solutions. • You will give the solution in tutorials, not me.
• Homeworks: Friedmanian view of homeworks:
FREE TO CHOOSE! • Advice: Prepare homeworks!!! • Typical exam: A problem set.
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Objectives
• Main Question: What is the role of money in an economy? How to model it? • What are the theories and models that underlie monetary policy? • At the end you should be able to: 1. Know the basic models that are used by central banks 2. Put some structure on the actions of central banks 3. Solve the models and know how to confront them to the data
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On the menu • What shall we explain? What is at stake? Is there a role for money? • Money in the Long-Run • Money in the Short-Run
• A little bit of Methodology • Rational expectation hypothesis, • Solving Models • The Lucas critique
• Back to theory • • • •
Introducing Money; Classical Economies; Information Problems; Nominal rigidities;
• Monetary policy. 5
Beyond Monetary Theory
• How to formulate a research question? • How to set up a model? Why do we set them up the way we do? What is a model? • How to confront the model to the facts? • How are models used to conduct policy?
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Pre-Requisites
• Macroeconomics II • A bit of time series (useful) • A bit of optimization theory (required) • A lot of common sense • And a LOT of work
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Help • Main references: • Some lecture notes when needed (see website) • Class notes, posted on the website as we go along • Monetary Policy, Inflation and the Business Cycle, Jordi Galí, Princeton University Press.
• Going Further: • Monetary issues • Monetary Theory and Policy, Carl. E. Walsh, MIT Press.
• Macroeconomics • Macroeconomic Theory, T. Sargent, Academic Press. • Dynamic Macroeconomic Theory, T. Sargent, Harvard University Press. • Recursive Macroeconomic Theory, L. Ljungqvist, and T. Sargent, The MIT Press.
• If you need to refresh your maths: • Mathematics for Economists, C. P. Simon and L. E. Blume, W. W. Norton & Company. 8
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