EC924: Monetary Economics
Marija Vukotic
Module Leader
Alexander Karalis Isaac
Module Lecturer
Introduction
EC924-15 Monetary EconomicsPrincipal Aims
The main objective of this module is to provide an understanding of the key aspects of monetary dynamic stochastic general equilibrium (DSGE) models, with a focus on recent contributions to the literature and their applications.
Principal Learning Outcomes
Cognitive Skills:...have some critical awareness of the limitations and strengths of the models studied, the empirical procedures used alongside these in monetary economics, and the discussion between these two approaches in the literature.
Subject Knowledge and Understanding:...show an understanding of monetary policy trade-offs, the design of monetary policy, and the optimal policy implied by New Keynesian models.
Subject Knowledge and Understanding:...show an understanding of the role of credit frictions in the business cycle and the transmission of monetary policy.
Subject Knowledge and Understanding:...demonstrate a thorough understanding of the role of nominal rigidities in generating a role for monetary policy and matching ‘stylised facts’ of the business cycle.
Subject Knowledge and Understanding:...demonstrate a thorough understanding of the estimation of the effects of monetary policy using suitably identified Vector Autoregressions.
Cognitive Skills:...solve simple dynamic optimisation problems.
Subject Specific and Professional Skills:...demonstrate an awareness of the Real Business Cycle research agenda and simple versions of that model.
Subject Knowledge and Understanding:...demonstrate a thorough understanding of the Basic New Keynesian Model.
Subject Specific and Professional Skills:...use specialist software for the solution and evaluation of New Keynesian and RBC models.
Syllabus
The module will typically cover the following topics and techniques: Empirical Evidence; Classical monetary model; NK model; macrofinance models; Current issues: introduction of financial frictions and unconventional monetary policy measures; Structural VARs; Solving rational expectation models; Introduction to Dynare/Matlab.
Context
- Optional Module
- L1P6 - Year 1, L1P7 - Year 1, L1I1 - Year 1, LN1J - Year 1, G30B - Year 4
- Pre or Co-requisites
- Pre-requisites: Undergraduate macroeconomics and econometrics at intermediate level. Co-requisites: the course will build on material in core macro and econometrics lectures.
Assessment
- Assessment Method
- Coursework (30%) + Centrally-timetabled examination (On-campus) (70%)
- Coursework Details
- Centrally-timetabled examination (On-campus) (70%) , Problem Set 1 (15%) , Problem Set 2 (15%)
- Exam Timing
- May
Subject Specific Skills
- Applied Economics
- Economic Information
- Economic Principles
- Research and Debate
- Abstraction
- Analysis of Incentives
- Analysis of Optimisation
- Analytical Reasoning
- Analytical thinking and communication
- Creative Thinking
- Critical Thinking
- Policy Evaluation
- Problem Solving
- Strategic Thinking
Transferable Skills
- Data-based skills
- IT skills
- Numeracy and Quantitative Skills
- Information Technology
- Mathematical, statistical, data-based research skills
- Oral Communication
- Team Work Skills
- Written Communication
- Coding Skills (Matlab, Stata or R)
Exam Rubric
Time Allowed: 2 Hours
Read all instructions carefully - and read through the entire paper at least once before you start entering your answers.
There is ONE section in this paper. Answer TWO questions (50 marks each).
Use a SEPARATE GREEN booklet for each question.
You must write the number(s) of the question(s) you have answered on the front cover of each booklet. Make sure the numbers are clearly visible and correspond to the questions you completed inside that booklet.
Do not submit answers to more than the required number of questions. If you do, only the first answers (in the order they appear) will be marked, up to the required number for each section.
Approved scientific (non-graphical) pocket calculators are allowed.
Previous exam papers can be found in the University’s past papers archive. Please note that previous exam papers may not have operated under the same exam rubric or assessment weightings as those for the current academic year. The content of past papers may also be different.