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Teaching
New Keynesian Monetary Policy Analysis for Central Bank Economists
A large part of the recent literature on monetary policy is within the framework often termed New Keynesian economics. It's New because its models are stochastic dynamic general equilibrium (DSGE) models, and Keynesian because they have nominal rigidities and imperfect competition.
This one-day course provides an introduction to monetary policy analysis in a New Keynesian set-up. It has three objectives. The first is to give participants a sufficient knowledge of the basic New Keynesian model to read quickly and understand additions to the literature. The second is to give participants an idea if not an overview of the issues dealt with. The third, more specific objective, is to give participants a background knowledge of the modelling approach behind the new DSGE models under development in many central banks.
The course follows Galí (2008) closely and consists of four lectures (each 80 minutes long). Lecture 1 presents a basic New Keynesian DSGE model in detail. Lecture 2 discusses some of the models implications for monetary policy, inflation and the business cycle. Lecture 3 turns to the design of monetary policy. Lecture 4 extends to the small open economy.
Reading: Galí, Jordi (2008); Monetary Policy, Inflation, and the Business Cycle – An Introduction to the New Keynesian Framework; Princeton University Press.
The course has been held at Danmarks Nationalbank (December 2005 and April 2006) and at the Central Bank of Iceland (May 2009).
Slides (pdf) »
Macroeconomics (Spring 2008 - 10 ECTS), University of Aarhus, Department of Mathematical Sciences
Extract from course catalogue (undergraduate): 'This course gives the students a firm introduction to macroeconomic theory. Starting from analyses of short-run business cycle fluctuations for closed and open economies, the focus is turned to medium to long run issues where prices become flexible... Throughout, the theoretical analyses are exemplified with studies of current economic-political problems...After completing this course, the students should be able to
- analyze causes and consequences of business cycle fluctuations using explicitly mathematically formulated macroeconomic models
- explain and analyze macroeconomic models for open economies engaged in international trade in goods and capital, taking various exchange rate regimes into account
- explain and analyze the adjustment processes taking place from the short run to the long run
- explain and analyze the main macroeconomic policy areas, especially the effects of fiscal and monetary policy in closed and open economies
- evaluate the importance of the assumptions made for the structure of the models and the results emanating from the models, in order to assess the strengths and weaknesses of the analyses.'
Main reading: Blanchard, Olivier (2006); Macroeconomics, Fourth Edition; Prentice-Hall.
Course website (in Danish) »
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