GRA 6639 Business Cycles and Monetary Policy

GRA 6639 Business Cycles and Monetary Policy

Course code: 
GRA 6639
Course coordinator: 
Karin Kinnerud
Annika Bacher
Course name in Norwegian: 
Business Cycles and Monetary Policy
Product category: 
MSc in Business - Economics
2025 Spring
Active status: 
Level of study: 
Teaching language: 
Course type: 
One semester

This course is a graduate level course in macroeconomics, allowing theory to meet data. More particularly, this course emphasizes economic fluctuations and policies motivated by business cycle fluctuations. Key questions regard whether swings in economic growth and employment are associated with a sustainable use of economic resources over time. 

The approach adopted in this course emphasizes the dynamic dimension of interesting applied macroeconomic problems. Participants will be introduced to digital tools used in modern quantitative macroeconomics.

Learning outcomes - Knowledge

This course is organized in a sequence of topics, where we address each topic in detail using both theory and applied methods. The empirical relevance of the different theories will be critically assessed. The course focuses on macroeconomic fluctuations, covering topics such as (i) detrending and stylized facts of business cycles, (ii) advanced theories of the business cycles, in particular real business cycle models and new Keynesian models (iii) the role of monetary and fiscal policy with respect to the business cycle.

Learning outcomes - Skills

Course participants will develop skills to analyze macroeconomic fluctuations and the role of economic policy, using quantitative macroeconomics.

Course participants will be introduced to tools used in business cycle analysis, in particular the software Matlab. They will be introduced to how quantitative economic models can be solved using Matlab, and how to use these tools to address macroeconomic questions.

Course participants will develop skills to dissect, understand, and present challenging and relevant macroeconomic problems in the real world.

General Competence

The students will be exposed to current macroeconomic theories and their implications for understanding key macroeconomic policy issues, as well as the practical tools used for macroeconomic analysis.

Course content

1. Stylized facts of business cycles

  • Measuring business cycles - some methods to detrend data
  • Computing business cycle statistics
  • Using facts to discipline and distinguish models

2. Introduction to advanced theories of business cycles

  • Real Business Cycle models
  • Solving models numerically (with a computer)
  • The New Keynsian Model
    • Nominal Rigidities
    • The New Keynsian Phillip's Curve

3. Monetary policy

  • Taylor Rule
  • Different Regimes: Commitment vs. Discretion
  • Monetary Policy in Practice
  • Green Monetary Policy

4.  Fiscal policy

  • Ricardian equivalence
  • Neo-classical fiscal multiplier
  • New Keynesian fiscal multiplier
  • Empirical estimates of the fiscal multiplier
Teaching and learning activities

Teaching will be divided between in-classroom teaching and asynchronous compoments. Slides will be provided but there may be addtional material covered in the classroom that is not on the slides. 

In addition, students will have TA sessions that consist of  programming parts and exercise classes to get a better in-depth understanding of the material covered in class. 

Software tools
Additional information

It is the student’s own responsibility to obtain any information provided in class.

The assessment for this course consists of one midterm presentation and one final exam. The components will be weighted together according to the information in the course description in order to calculate the final letter grade for the course. 

All parts of the assessment must be passed in order to get a grade in the course.

Continuous assessment will no longer exist as an examination form from autumn 2023. For questions regarding previous results, please contact InfoHub.


All courses in the Masters programme will assume that students have fulfilled the admission requirements for the programme. In addition, courses in second, third and/or fourth semester can have specific prerequisites and will assume that students have followed normal study progression. For double degree and exchange students, please note that equivalent courses are accepted.


Deviations in teaching and exams may occur if external conditions or unforeseen events call for this.

Required prerequisite knowledge

GRA 6634 Advanced Macroeconomics or equivalent

Exam category: 
Activity, Oral
Form of assessment: 
Exam/hand-in semester: 
First Semester
Group (3 - 4)
Exam code: 
GRA 66395
Grading scale: 
Examination when next scheduled course
Exam category: 
School Exam
Form of assessment: 
Written School Exam - pen and paper
Exam/hand-in semester: 
First Semester
Support materials: 
  • BI-approved exam calculator
  • Simple calculator
  • Bilingual dictionary
3 Hour(s)
Exam code: 
GRA 66396
Grading scale: 
Examination when next scheduled course
Type of Assessment: 
Ordinary examination
All exams must be passed to get a grade in this course.
Total weight: 
Student workload
Feedback activities and counselling
10 Hour(s)
seminars with problem sets and introduction to matlab
Seminar groups
3 Hour(s)
Group presentations of midterm assignments
Prepare for teaching
24 Hour(s)
Group work / Assignments
10 Hour(s)
Work with midterm assignment (group work) and problem sets
20 Hour(s)
3 Hour(s)
Student's own work with learning resources
54 Hour(s)
36 Hour(s)
Sum workload: 

A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 6 ECTS credits corresponds to a workload of at least 160 hours.