GRA 6631 Monetary Theory and Policy
APPLIES TO ACADEMIC YEAR 2013/2014
GRA 6631 Monetary Theory and Policy
Responsible for the course
Department of Economics
According to study plan
Language of instruction
This course offers an introduction to modern monetary theory and policy. Monetary economics studies the relationship between real variables, such as real GDP, real interest rates, employment or unemployment, and real exchange rate, and nominal variables, such as rate of inflation, nominal interest rates, and nominal exchange rates. The course focuses on theory, but also discusses some key empirical findings
The course gives the participants an overview of the literature on monetary business cycle analysis. To this end it develops the canonical New Keynesian sticky-price model, which has emerged as the workhorse for monetary policy analysis. Important topics are the so-called New Keynesian Phillips curve and the forward-looking nature of inflation and their implication for the design of monetary policy.Moreover, the course discusses monetary policy in open versus cloced economies.
The course sets high requirements for student involvement for successful completion of the course. During the end of the course, the students are expected to make a group presentation on a given topic related to a monetary policy issue
GRA 6634 Introduction to Advanced Macroeconomics (or a similar graduate introduction to macroeconomics).
Romer, David H. 2012. Advanced macroeconomics. 4th ed. McGraw-Hill/Irwin. Chapters 6,7, 11
Walsh, Carl E. 2010. Monetary theory and policy. 3rd ed. MIT Press. Chapter 1
Clarida, Gali and Gertler. 1999. “The Science of Monetary Policy: A new Keynesian perspective”. Journal of Economic Literature. 37 (4). s. 1661-1707
Clarida, Richard, Jordí Gali and Mark Gertler. 2001. “Optimal Monetary Policy in Open versus Closed Economies: An Integrated Approach”. American Economic Review. 91 (2). s. 248-252
Monacelli, Tommaso. 2005. “Monetary Policy in a Low Pass-through Environment”. Journal of Money, Credit and Banking 37(6), 1047-1066.
During the course there may be hand-outs and other material on additional topics relevant for the course and the examination
Walsh, Carl E. 2010. Monetary theory and policy. 3rd ed. MIT Press. Chapters 7, 8, and 11.
1.Introduction: Operating procedures in monetary policymaking. The monetary transmission mechanism
2. The dynamic inconsistency of low inflation
3. The canonical new Keynesian model
4. Monetary policy in the new Keynesian model
5. Monetary policy in open versus closed economies
It's learning/ homepage
Learning process and workload
A course of 6 ECTS credits corresponds to a workload of 160-180 hours. Both lectures and exercise seminares are provided.
Please note that while attendance is not compulsory in all courses, it is the student’s own responsibility to obtain any information provided in class that is not included on the course homepage/It's learning or text book.
A group project/presentation (graded pass/fail) with 4-6 students in each group and a written final exam (3 hours ).
Both parts of the evaluation need to be passed in order to get a grade in the course.
Specific information regarding student evaluation beyond the information given in the course description will be provided in class. This information may be relevant for requirements for termpapers or other hand-ins, and/or where class participation can be one of several elements of the overall evaluation.
GRA 66311 accounts for 100 % of the final grade in the course GRA 6631
Examination support materials
Exam aids at written examiniations are explained under exam information in the student portal @bi. Please note use of calculator and dictionary in the section on examaids
It is only possible to retake an examination when the course is next taught.
The assessment in some courses is based on more than one exam code.
Where this is the case, you may retake only the assessed components of one of these exam codes.
Where this is not the case, all of the assessed components of the course must be retaken.
All retaken examinations will incur an additional fee.
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Any violation of the honor code will be dealt with in accordance with BI’s procedures for cheating. These issues are a serious matter to everyone associated with the programs at BI and are at the heart of the honor code and academic integrity. If you have any questions about your responsibilities under the honor code, please ask.