20297 - MONETARY POLICY
Course taught in English
Programma in corso di definizione
Go to class group/s: 31
Lezioni della classe erogate in presenza
We will not use much maths; in fact, we will use just simple algebra: virtually no derivatives, very simple difference equations that we will solve by brute force, and no integrals. However, if seeing an equation gives you a headache, you should probably not take this course. I will also assume that you have taken at least one full course specifically on macroeconomics, and hopefully two.
The first goal of this course is to discuss some of the key problems of monetary policy of our times, using a rigorous framework but with an emphasis on facts and problems as opposed to complicated theoretical models. In particular, the financial crisis has taught us, among many other things, that in order to understand the working of monetary policy we need to understand the instruments and working of the money market ---something that is just totally absent from the macro models of monetary policy now in use. The second goal of this course is methodological. Most, if not all, macroeconomic problems do not have an obvious, black-or-white solution: there are pros and cons in any solution we might think of. I will therefore strive to present all the main sides of the debate, instead of presenting a simple model with a simple, one-sided solution. The third goal is to give the instruments to discuss the current problems, including the evolution of monetary policy (and teh debate about monetary policy) during the pandemic. Ideally, at the end of the course, the student will have the tools to evaluate critically the different positions on the main issues being debated. The fourth goal of the course is to give a correct feel for facts and figures, and to teach students where to get and how to interpret monetary statistics and cnetral bank balance sheets.
- Nominal and real interest rates
- The Fed and the Ecb
- The money supply process
- Mpnetary policy instruments of cnetral banks
- Monetary policy in practice before the crisis
- A bit of history
- Unconventional monetary policies
- Monetary policy and the pandemic: actions and new perspectives
- The Target system and the role of central bank capital
- Modern Monetary Theory, inflation, seigniorage, and the budget deficit
- The collateral policies of central banks
- The economics of structured finance
- Credit default swaps
- The emerging importance of dealer banks
- Shadow banking
- The financial crisis and its explanations
- Understand how monetary policy is conducted in the Eurozone and the US
- understand the current debate about monetary policy
- locate and interpret central bank balance sheets and data
- understand the evolution of monetary policy and its debate during the pandemic
- compare mainstream monetary policy with the Modern Monetary Theory and alternative policy proposals
Interpret the actions of monetary policymakers.
- Face-to-face lectures
- Online lectures
face-to-face lectures are standard. Online lectures will replace face-to-face lectures depending on the decision of teh university administration. Online lectures are live, recorded and made available to students. Students can intervene even during online lectures, either in wiriting or by voice. Active participation is encouraged.
The precise format of teh exam will be presented and discussed in class, but it consists essentially of "True, False or Uncertain" questions and of simple open questions.
Handouts available online on the course BlackBoard