Advanced Macroeconomics 3: Business Cycles (5 cr)

Research Master's students PhD students
University of Helsinki - Economics
Antti Ripatti
Period 3
Contact teaching
Economicum building

In case of conflicting information consider the Sisu/Courses/Moodle pages the primary source of information.

The course starts with an introduction to business cycle facts and methods. Then we present the main theoretical concepts and methods for solving and calibrating linear stochastic dynamic general equilibrium (DSGE) models with aggregate shocks. We use the basic real business cycle model as the workhorse model to demonstrate the methods. Then we study why the monetary policy is neutral in the classical, RBC-type macro models. The classical model is augmented with imperfect competition and price rigidities, leading to the canonical new Keynesian model. Next, various monetary policy rules are studied in this framework. We also study the zero lower bound restriction of nominal interest rates on monetary policy and the resulting extensions to the basic framework. This builds a bridge to study the interaction of fiscal and monetary policies. We also study the open economy dimension of monetary policy. Finally, topic(s) concerning current economic policy issues may be covered.

Please note that the course former name was Advanced Macroeconomics 3: Monetary Policy Models (and still is in Sisu if you use DPE-9319 PhD level code)

  • Completion method: contact teaching
    • Streaming will be only available to the FDPE students, for more infromation please contact Jenni Rytkonen, jenni.rytkonen [at]
  • Schedule: can be found in Course Page and Sisu
  • Study materials: can be found in Moodle
    • For some courses, it is enough to register in Sisu and you can access directly the Moodle area, please note, however, that it may take up to two hours after registration to enter the Moodle area.
    • Log in with your UH username to be able to use all the features of the course workspace
    • More tips for enrolling in Moodle can be found here

Please register for the course in the UH Sisu with your UH username. Further instructions can be found here.

Aalto University Students
  • Code: ECON-L3300
  • Target groups: PhD / rMSc
  • Credit points: 5
  • Credit transfer: apply for substitution in Sisu

Further information on credit transfer can be found here.

Hanken Students
  • Code: 26051
  • Target groups: PhD / rMSc
  • Credit points: 5
  • Credit transfer: apply for substitution in Sisu

Further instructions on credit transfer can be found here.

University of Helsinki Students
  • Code: ECOM-R319 (rMSc) / DPE-9319 (PhD), please note that the course name is Advanced Macroeconomics 3: Monetary Policy Models with the PhD code
  • Target groups: PhD / rMSc
  • Credit points: 5
FDPE Students Students
  • Target groups: PhD

  • Credit points: please check your curriculum

  • Credit transfer: please apply for credit transfer according to your home university's procedures

Further instructions can be found here.

After the course, the student should:

  • Be able to compute stylised facts using macroeconomic data
  • Be able to linearise and solve linear dynamic models
  • Understand and master the real business cycle model (RBC)
  • Be able to augment the RBC model with other economic features and shocks
  • Be able to derive and solve the New Keynesian model and compare the welfare effects of alternative monetary policy rules
  • Understand optimal monetary policy in the basic New-Keynesian framework
  • Be able to describe how the open-economy setting alters the previous results
  • Be able to apply and alter the DSGE models for topical economic policy issues