This course teaches new developments in the field of monetary economics. We start by a refresher on the dynamic New Keynesian model that is at center stage in the course "Monetary Economics". We then continue with analyses of indeterminacy and welfare. In each case we will put particular emphasis on the role played by features that make New Keynesian theory attractive from an empirical point of view. We will also develop the techniques that are necessary to work with those concepts. In the second part of the course we will discuss some recent extensions of the New Keynesian model. Examples include models with labor market frictions, open economy models as well as models with financial frictions. Those features are empirically motivated and their presence also has important normative implications, as we are going to see.
Galí, Jordi (2008): Monetary Policy, Inflation and the Business Cycle, Princeton University Press.
Further literature: see Moodle
StO/PO MA 2016: 6 LP, Modul: "Advanced Monetary Economics"
StO/PO MEMS 2016: 6 LP, Modul: "Advanced Monetary Economics", Major: Macroeconomics
Written exam (90 min)