Monetary Theory (10645-01, Master, 6 KP)
Following the onset of the financial crisis, liquidity shortages caused great concern. Meanwhile, excess liquidity has become a challenge. In this lecture, we will be asking what function liquidity fulfills in a modern economy. We will be looking at the kind of frictions that make money essential and consider the role of credit and financial intermediation in the economy. On this basis, we will discuss various micro- and macroeconomic aspects of monetary theory and monetary policy.
- The Seminar will take place on May 24th, 14:30 - 18:00 in room S15.
- Please note, the deadline for the paper presentations is April 26th.
- For the Q&A Session on April 26th, please send your questions by Mail to Romina Ruprecht until April 23rd.
- For the Q&A Session on April 19th, please send your questions by Mail to Oliver Sigrist until Thursday evening, April 13th.
- The dates for the seminar are now online and can be found in the schedule.
- The list of papers and the presentation guidelines are now online. Please send a mail indicating the paper you would like to present and whether you would like to present a paper alone or in a group of two to Romina Ruprecht. Papers will be allocated on a first come, first serve basis. Please note, the deadline for contacting us about the paper presentations is April 26th. Anyone not contacting us until that date will not be considered for the presentations.
14:15-18:00: Introduction, The Basic Environment & Pure Credit Economies (Part I)
14:15-18:00: Pure Credit Economies (Part II)
14:15-18:00: Money in Equilibrium (Part I)
14:15-16:00: Money in Equilibrium (Part II)
16:15-18:00: Exercises Set 1 (Credit Economies) / Solutions
14:15-18:00: Money in Equilibrium Part (III) & Monetary Policy, the Friedman rule, and the cost of inflation (Part I)
14:15-16:00: Monetary Policy, the Friedman rule, and the cost of inflation (Part II)
14:15-16:00: Questions and Discussion regarding the lecture
16:15-18:00: Exercise Set 3 (Search Externalities) / Solutions
14:15-16:00: Exercise Set 4 (Hot Potato Effect) / Solutions16:15-18:00: Questions and Discussion regarding the tutorials
14:45 - 15:45 Written Exam (60 Minutes)
14:30-18:00 Presentations of individual papers (participation is mandatory)
The course consists of two parts: a lecture and the study of individual papers. The lecture is based on the book "Money, Payments, and Liquidity" by Ed Nosal from the Federal Reserve Bank of Chicago and Guillaume Rocheteau from the University of California-Irvine, MIT-Press.
Stephen Williamson and Randall Wright discuss the foundations of New Monetarist Economics in two articles worth reading:
The Lagos-Wright Model:
- Lagos, R., and R. Wright. "A Unified Framework for Monetary Theory and Policy Analysis." Journal of Political Economy, 113 (Jun., 2005), 463-484.
The BCW Model:
- Berentsen, A., G. Camera, and C. Waller. "Money, Credit and Banking." Journal of Economic Theory, Vol. 135, No. 1, Pages 171-195.
- The Role of Money (Chapter 3) - Nosal, E., Rocheteau, G. "Money, Payments and Liquidity"
Individual papers: to be announced