Money as a medium of exchange. Money as a store of value. The optimal quantity of money. Monetary policy in a classical DSGE model. Monetary policy in a new Keynesian DSGE model. Causes for price stickiness and wage stickiness. Coordination failures. Issues in communication policy.
- "Monetary Theory and Policy", Carl e. Walsh, The MIT Press, Cambridge, Massachusetts, 2010 [ch. 8]
- papers studied in the course
Learning Objectives
The course aims at introducing students to the main issues about money and monetary policy, in a classical framework and in a new Keynesian framework. Other topics concerning the reasons for public interventions are considered as well.
Prerequisites
It is recommended to have taken the exams of Mathematics for Economics and Macroeconomics I before this course.
Teaching Methods
Lectures and discussions.
Further information
Attendance is highly recommended.
Type of Assessment
Students are required to write an essay, to prepare a presentation of a published paper, and to take a brief oral exam.
Course program
The first module is taught by Prof. Guidi and covers:
- introduction to money
- money as a medium of exchange
- money as a store of value
- the optimal quantity of money
The second module is taught by Prof. Boncinelli and covers:
- introduction to the new Keynesian DSGE model
- reasons for price/wage stickiness: implicit/explicit labor contracts, efficiency wages, menu costs, rational inattention
- equilibrium unemployment theory
- coordination failures
- communication policy: social value of public information, time inconsistency