Module overview
The module will introduce students to the monetary economics literature and in particular to New Keynesian framework which is at the heart of the medium-scale models used by many central banks. The core of the module will focus on the relationship between the inflation dynamics, the business cycle and the design of monetary policy.
Linked modules
Prerequisite: ECON6023
Aims and Objectives
Learning Outcomes
Knowledge and Understanding
Having successfully completed this module, you will be able to demonstrate knowledge and understanding of:
- adequate analytical methods to examine monetary policy and its consequences
- the role of monetary policy in macroeconomic context, and of how monetary policy affects real variables
Subject Specific Intellectual and Research Skills
Having successfully completed this module you will be able to:
- apply adequate dynamic macroeconomic methods to analyse monetary policy and other monetary events;
- apply macroeconomic theory and reasoning to evaluate the implications of monetary policy for macroeconomic stabilisation and welfare.
Transferable and Generic Skills
Having successfully completed this module you will be able to:
- Communicate complex theoretical and quantitative reasoning in written form
Syllabus
The module builds on dynamic stochastic general equilibrium models with nominal rigidities and emphasises the role of forward-looking rational agents. Topics include general equilibrium models such as real business cycle models, and models with sticky prices. The design of optimal monetary policy and the welfare effects of simple monetary policy rules are also analysed.
The topics covered include:
The Classical Monetary Model
The Basic New Keynesian Model
The Design of Monetary Policy
Extensions.
Learning and Teaching
Teaching and learning methods
Lectures and masterclasses
| Type | Hours |
|---|---|
| Teaching | 24 |
| Independent Study | 126 |
| Total study time | 150 |
Resources & Reading list
General Resources
Other course information available via blackboard.
Textbooks
(2015). Monetary Policy, Inflation and the Business Cycle. Princeton: Princeton University Press.
Assessment
Assessment strategy
Assessment in this module is through two pieces of coursework (each worth 10%) and an end of module assessment (80%). The coursework assignments are due on the specified dates, before the lecture starts. This is supported by continuous formative assessment. This is the same for internal repeat. Assessment for external repeat and referral is through 100% end of module assessment.
Summative
This is how we’ll formally assess what you have learned in this module.
| Method | Percentage contribution |
|---|---|
| Problem sets | 10% |
| Final Assessment | 80% |
| Problem sets | 10% |
Referral
This is how we’ll assess you if you don’t meet the criteria to pass this module.
| Method | Percentage contribution |
|---|---|
| Final Assessment | 100% |
Repeat
An internal repeat is where you take all of your modules again, including any you passed. An external repeat is where you only re-take the modules you failed.
| Method | Percentage contribution |
|---|---|
| Final Assessment | 100% |