Monetary Economics
Honours/masters, University of Melbourne, 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