**Monetary Economics**(honours/masters), 2014

Lecture 1 Introduction and course overview.

Lecture 2 Classical building blocks, part one. Solving the classical model. Real variables independent of nominal variables (classical dichotomy).

Lecture 3 Classical building blocks, part two. Money demand and price level determination.

Lecture 4 Basic new Keynesian model, part one. Imperfect competition and static price setting.

Lecture 5 Basic new Keynesian model, part two. Price setting with sticky prices.

Lecture 6 Basic new Keynesian model, part three. Deriving the New Keynesian Phillips curve.

Lecture 7 Basic new Keynesian model, part four. Equilibrium dynamics and responses to shocks.

Lecture 8 Monetary policy in the new Keynesian model, part one. Efficient allocations and sources of distortions.

Lecture 9 Monetary policy in the new Keynesian model, part two. Equilibrium stability and uniqueness, implementation of optimal policy.

Lecture 10 Monetary policy in the new Keynesian model, part three. Approximate welfare function, evaluating policy rules.

Lecture 11 Monetary/fiscal interactions in the new Keynesian model, part one. Fiscal policy and multipliers in the basic new Keynesian model.

Lecture 12 Monetary/fiscal interactions in the new Keynesian model, part two. The zero lower bound. Implications for multipliers.

Lecture 13 Monetary/fiscal interactions in the new Keynesian model, part three. New Keynesian model in continuous time. Optimal policy in a liquidity trap without commitment.

Lecture 14 Monetary/fiscal interactions in the new Keynesian model, part four. Optimal policy in a liquidity trap with commitment.

Lecture 15 Unemployment in the new Keynesian model, part one. Real and nominal wage rigidities, the wage inflation Phillips curve.

Lecture 16 Unemployment in the new Keynesian model, part two. Solving the model with nominal wage and price rigidities, implications for unemployment volatility.

Lecture 17 Background and overview of the financial crisis, policy responses.

Lecture 18 Bank runs, securitised banking and the run on repo.

Lecture 19 Macroeconomics with financial frictions, part one. Agency costs, costly state verification, amplification and propagation of shocks.

Lecture 20 Macroeconomics with financial frictions, part two. Endogenous risk, volatility paradox.

Lecture 21 Macroeconomics with financial frictions, part three. Credit rationing, lemons problems, volatility and collateral.

Lecture 22 Macroeconomics with financial frictions, part four. Heterogeneous beliefs, leveraging optimism.

Lecture 23 Macroeconomics with financial frictions, part five. Moral hazard, inside and outside liquidity.

Lecture 24 Final exam review.

Problem set 1, solutions

Problem set 2, solutions

Problem set 3, solutions

Problem set 4, solutions

Problem set 5, solutions

Problem set 6, solutions