Advanced monetary theory and policy econ 447 on ideas. Monetary theory and policy eco 403 university of miami. Its purpose is to introduce the basic models macroeconomists use to study fluctuations. Chapter 15 monetary theory and policy slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Online text and notes in monetary economics the economics.
In fact, it was keynes who popularized this great instrument of macroeconomic policy during the 1930s depression. Chapter 23 monetary policy theory probably wont get to this chapter. The theory presented in this course covers a broad range of topics including exchange rate determination, monetary and fiscal policy in an open economy that is, and economy that trades goods and assets with the rest of the world, balance of payments crises, the choice of exchange rate systems, and international debt. Lecture notes and slides are the main material for the class. The goals of macroeconomic policy macroeconomic policy o monetary policy. I teach two courses each semester here at wellesley, from a rotation of five courses. Recall from the earlier discussion of money and banking that open market operations involve fed. Lecture notes 3 the monetary approach to flexible exchange.
A monetary theory is a set of ideas about how monetary policy should be conducted within an economy. The class follows the lecture notes, which are available on the website. Walsh 1999, monetary theory and practice, chapter 1. Monetary economics hand written notes, pdf ebook for bcom. Exam i june 1st, 9 am 3 hours written exam holm monetary policy, lecture 1 2 32. International finance theory and policy is built on steve suranovics belief that to understand the international economy, students need to learn how economic models are applied to real world problems. Introduction in this chapter, we analyze the conduct of monetary policy or the operating procedure i. When the federal reserve buys a government bond from a bank, that bank acquires money which it can lend out.
Government budget deficits also can be an influential factor of monetary policy. Monetary policy is conducted by a nations central bank. To begin the lecture, professor shiller explores the origins of central banking, from the goldsmith bankers in the united kingdom to the founding of the bank of england in 1694, which was a private institution that created stability in the u. The theoretical foundation is the quantity theory of money.
The fed has three main instruments that it uses to conduct monetary policy. Practical problem set 14 lecture notes historical background and the setting up of the economic zones of the world monetary theory and policy lecture notes the interdependence of the national and international politics with the economy monetary theory and policy lecture notes integration theories for turkey eu relations monetary theory and policy monetary. I will provide sufficiently detailed lecture notes and some additional material during the lectures. Define monetary policy and explain the main objectives of monetary in a developing economy. It will be given in english due to demand from incoming international students. All the lectures notes of the module monetary theory and policy university. Arne hallam iowa state, microeconomics nolan miller harvard, lecture notes on microeconomic theory robert nau duke, seminar in choice theory sten nyberg sse, advanced microeconomics ariel rubinstein tel aviv, lecture notes in microeconomic theory. The feds board of governors formulates policy, and twelve federal reserve banks implement policy. Advanced monetary theory and policy econ 447 this is the reading list for this course, linking to works indexed on repec.
Fiscal policy may affect aggregate supply as well as demand see figure 12. The theoretical foundation of monetarism is the quantity theory of money. Further, it also deals with the distribution of credit between uses and users and also with both the lending and borrowing rates of interest of the banks. The lucas critique of econometric policy evaluation. This particular treatment follows carl walsh 2003, monetary theory and policy, chapter 5. Monetary theory suggests that different monetary policies can benefit nations. Note that this does not mean waiting until inflation expectations begin. Chapter 24 the role of expectations in monetary policy probably wont get this far. The committee is made up of 12 members, the seven from the board of governors plus five presidents of the district banks, who serve on a rotating basis, one of which is always from the new york fed. Lecture notes theories of economic integration models. Here we list the most important ideas and policy implications and explain them below. To potential output, or to increase potential output.
A policy oriented approach houghton mifflin company, boston, ma, 2007. List of key topics in monetary economics pdf notes ebook for b. In the next lecture, you are going to hear more about reserve money and the cbmmore about reserve money and the cbm balance sheet. For example, expansionary fiscal policy may affect interest rates, which can cause the dollar to appreciate and exports to decline or rise.
This reading list is managed by christian zimmermann. Thirteenpage document, covering what is monetary policy. Chapter 15 monetary theoryandpolicy linkedin slideshare. This year, from june 12 14 2006, david laidler gave three public lectures on topics related to monetary theory and monetary policy. Monetary theory and policy lectures soe091 napier studocu. The new keynesian model of monetary policy is becoming increasingly standard in the analysis of monetary policy. Topics covered include the determination of the money supply, the conduct of monetary policy, and monetary theory. Introduction to macroeconomic theory ii spring, 2019. Follow the monetary policy news learning the material becomes both easier and more fun.
The net export effect reduces effectiveness of fiscal policy. In order to promote the exchange of ideas and to support its own research capacity, the oesterreichische nationalbank regularly invites. Missing part iii chapters will distributed in class and available online in the near future. Lecture notes macroeconomic theory ii economics mit. It presents theory and applies it towards gaining an understanding of recent events and current policy issues. Governmental activities before the great depression of the 1930s were minimal and, hence, the role of fiscal policy was extremely limited.
However, some parts follow the following textbook, which is optional. Introduction lectures with me or guests i thursdays 1215 1400 in auditorium 3 seminars even comfort hvinden i tuesdays 0815 in grupperom 1 i thursdays 0815 in seminarrom 101 material i monetary policy, in ation, and the business cycle by jordi gali i some articles, see syllabus on webpage. Then a doubling of the exchange rate will leave the real exchange rate unchanged. The monetary approach rate is proportional to the relative price level. Lecture monetary policy theory ucsb department of. If you continue browsing the site, you agree to the use of cookies on this website. Monetary policy 1 monetary policy is concerned with the measures taken to regulate the supply of money, the cost and availability of credit in the economy. It is true what they say, that economists do it with models. The lecture notes combine the approaches of and adapt materials in both books. Long gaps between policy decision and ultimate objective.
International finance and macroeconomic policy, economics 303. The fundamental objective of monetary policy is to aid the economy in achieving full. Ec 230 lecture notes pennsylvania state university. Introduction to monetary policy international monetary fund. References in the notes refer to articles given on the reading list.
Lecture slides in monetary economics the economics network. Federal open market committee is responsible for directing monetary policy. In order to promote the exchange of ideas and to support its own research capacity, the oesterreichische nationalbank regularly invites internationally renowned economists for short guest professorships. Money supply, money demand, and monetary equilibrium c. We cannot design policy without a theory of how money or monetary policy in general affects the economy. Macroeconomic theory ii economics mit opencourseware. Public finance, open and distance learning module, monetary theory and practice, open and distance learning module an analysis of the efficiency of the foreign exchange market in kenya.
Macroeconomic stabilization policies, 10 january lecture 2. Characteristics of monetarism monetarism is a mixture of theoretical ideas, philosophical beliefs, and policy prescriptions. Open market operations is the buying and selling of government bonds by the federal reserve. Lecture 1 the new keynesian model of monetary policy. Lecture notes slides are available in english o nly, problem sets will be also available in german. This is the second course in the fourquarter graduate sequence in macroeconomics. These notes and ebook on monetary economics have been prepared by experienced commerce faculty and toppers and will provide you with easy to study material. Monetary policy should try to minimize the difference between inflation and the inflation target in the case of both demand shocks and permanent supply shocks, policy makers can simultaneously pursue price stability and stability in economic activity following a temporary supply shock, however, policy makers can. Variations in the inflation rate can have implications for the fiscal authoritys. In his nobel lecture lucas 1996 summarizes the longrun effects of changes in the money. The theory presented in this course covers a broad range of topics including exchange rate determination, monetary and fiscal policy in an open economy that is, and economy that trades goods. Monetary theory and practice, open and distance learning.
A key goal of monetary theory is to understand the transmission mechanisms of monetary policy. The suffolk system and the national banking era in the u. Lecture note on classical macroeconomic theory econ 5 prof. Econ 252 2011 lecture 18 monetary policy open yale. Serpil kahraman money money plays an important role in interest rate and inflation. Introduction to monetary policy reemphasize chapter s points. The transmission of monetary policy, 24 january lecture 4. While you have taken intermediate macro, most of mishkins book is meant to be accessible to less prepared students.