30159 - MONETARY THEORY AND POLICY
CLEAM - BESS-CLES - BIEMF
Course taught in English
Go to class group/s: 31
This course goes into more depth in the analysis of monetary theory and policy introduced in the basic course of macroeconomics. The main objective of the course is to allow students to understand the behavior of central banks and the effects of monetary policy on the economy. After introducing and defining money, we discuss the conduct of monetary policy, describe the money supply process and compare the structure of monetary policy institutions and the tools of monetary policy at different central banks, such as the European Central Bank and the U.S. Federal Reserve. We then study theory and empirical evidence related to the effects of monetary policy on the economy and its transmission mechanisms. Finally, we discuss the design of monetary policy and present a number of related issues, such as the time-inconsistency of monetary policy. We also develop a model of inflation targeting. Finally, after briefly discussing the causes of the recent financial crisis and its real effects, we analyze the unconventional response of monetary policy in turbulent times and describe the monetary policy tools created during the crisis.
What is money?
The conduct of monetary policy at the Fed and the ECB and the creation of money
The transmission mechanism of monetary policy: theory and empirical evidence
The design of monetary policy
Financial crisis and monetary policy
Examination is through a written exam.
- The main reference textbook is F. MISHKIN, The Economics of Money, Banking and Financial Markets, Addison Wesley, 9th edition, (selected chapters).
- Additional readings as specified in the program.
- Handouts and slides will be made available.