–
- Code:
- ECOM-R319/DPE-9319
- Field:
- Macroeconomics
- Targets:
- Research Master's students PhD students
- Organiser:
- University of Helsinki - Economics
- Instructor:
- Antti Ripatti
- Period:
- Period 3
- Format:
- Lecture
- Method:
- Contact teaching
- Venue:
- Economicum
- Enrollment:
In case of conflicting information consider the Sisu/Course/Moodle pages the primary source of information.
Aalto and Hanken economics students can enroll in their home university’s SISU! Further instructions can be found on the How to enroll page, also for other students.
Before taking and completing the course make sure that the credits can be counted towards your degree at your home university by checking which courses are included in your curriculum or by contacting your home university’s student/learning services.
Please note that there is a different code for UH PhD students: DPE-9319
Content
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.
Learning outcomes
After the course, the student should
- Be able to compute stylized business cycle facts using macroeconomic data
- Be able to linearise equilibrium conditions and to solve linear dynamic models and compare them to data
- Understand and master the real business cycle model (RBC)
- 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 the interaction between monetary and fiscal policy
- 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