Money and Monetary Policy (ECOM-434)

August 12, 2019

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Method of completion: contact teaching


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Study material:

  • Can be found in the Moodle learning platform
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  • In UH’s Sisu with your UH username
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    • More information can be found on the webpage How to enroll in the courses?



The goal of the course is to provide an introduction to monetary macroeconomics and the role of money and monetary policy in the economy. After describing what monetary macroeconomics is about, students will learn how the money supply is determined in the economy and how it changes. The course emphasises price stickiness as the key factor underlying the short-run effectiveness of monetary policy. Different models are used to show how an economy can fall into a liquidity trap and what the potential measures are through which policy makers can try to lift an economy from the liquidity trap. The core of the course is optimal monetary policy. Different models also show how the time inconsistency of the optimal pre-commitment policy emerges when policy makers are dynamically optimising their policy choices and how the inflation and stabilisation bias bedevil optimal discretionary monetary policy. The aim of the course is to learn to use simple analytical tools to understand basic features of money and monetary policy from the point of view of the shortrun macroeconomic equilibrium of an economy.