Monetary Economics

Course Director: Daria Finocchiaro

Content

This course is designed to provide students with a comprehensive understanding of monetary economics and the empirical tools used to study monetary policy. We begin by examining the theoretical foundations of money, including why households hold money and how monetary policy can have real effects in both classical and New Keynesian models. We then study monetary policy in environments with price rigidities, focusing on the canonical New Keynesian framework used widely in central banks.

On the empirical side, the course introduces key econometric approaches for estimating the effects of monetary policy, including vector autoregressions (VARs), local projections, and modern identification strategies such as recursive, narrative, and high-frequency methods. We also discuss recent research on the distributional effects of monetary policy.

Format and Structure

There will be 12 lectures and 5 TA sessions. Students will be also required to do some group work and presentations.

Course Administrator: jessica.kihlman@hhs.se

This course will introduce students to the literature on monetary economics and equip them with tools to apply insights from academic research to real-world events. We will explore two interconnected approaches: empirical and theoretical analyses.

Students are expected to be familiar with macroeconomic theory at the intermediate level and with the optimization tools taught in the advance math course offered in the first semester. Some basic knowledge of STATA and Matlab is recommended (but not mandatory).

The course main reference is the text book "Monetary Policy, inflation,and the Business Cycle: An introduction to the new Keynesian Framework", Jordi Gali, Princeton University Press. We will make use also of journal articles and lecture notes.

Final exam and student presentations.

Find the course schedule in TimeEdit

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