Macroeconomic Theory and Policy

ECON60122 Macroeconomic Theory and Policy 15 Semester 2 Postgraduate Taught Level 6 George Bratsiotis Unit coordinator School of Social Sciences 1 FHEQ level (Framework for Higher Education Qualifications) ' Masters/Integrated Masters P4 ' European Credit Transfer & Accumulation System Rating : 7.5 The aim of this module is to familiarise students with key concepts and the main models used in modern macroeconomic policy. Particular emphasis is give on the construction and interpretation of some of the main modelling frameworks used by monetary policy advisers, central banks and macroeconomists in general. One of the topics covers in depth is the method of Dynamic Stochastic General Equilibrium (DSGE), which has become the backbone of recent macroeconomic policy analysis. This module, which in many universities around the world is part of their core macro programme, is essential for those who, (i) intend to work in the fields of mainstream macroeconomics, monetary policy and fiscal budgets and deficits; (ii) work in central banks or fiscal institutions, or (iii) are interested in research and policy modeling at a macroeconomic level At the end of this course students should be able to,(i)  Understand the strengths and weakness of the main macroeconomic tools and models used in modern macroeconomics.(ii) Develop the skills to design models of their own from which to derive original results.(iii) Learn to evaluate and critically compare results in alternative macroeconomic models.(iv) Understand the importance and limitations of modeling assumptions for macroeconomic policy. [1]. Empirical Facts on the Effects of Monetary and Fiscal Policy [2]. Discretionary Policy and Time Inconsistency in Neo-Classical Models. Inflation Bias[3]. Solutions to the Inflation Bias[4]. Dynamic Stochastic General Equilibrium Models (DSGE) : The New Keynesian Framework for Policy Analysis(5]. Solving Linear Stochastic Difference Equation Models with Forward Rational Expectations                  [6]. Macroeconomic Policy Analysis in New Keynesian Models: Optimal Commitment, Rules and  Discretion[7]. Inflation Targeting  [8]. Monetary and Fiscal Policy and Public Finance   [9].  The Fiscal Theory of the Price Level      Lectures 1 Written exam 75% 2 Written assignment (inc essay) 25% Y Basic texts:       Walsh, C.E., (2003). Monetary Theory and Policy. MIT Press (second edition).                        Woodford, M,.(2003),  Interest & Prices. Princeton Press.           Gali, J.(2008),  Monetary Policy, Inflation and the Business Cycle, Princeton Press.                         Blanchard, O.J. & S. Fischer, (1989). Lectures on Macroeconomics, MIT Press. JRULM (inc.                         SLC) 330.1/B379; Lewis 330.1/N382.  Lectures 20 0 130 Timetable Lectures: Monday 11-1pm,