Monetary Theory (10645-01, Master, 6 KP, block week)
Topic
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.
Announcements
- For those interested in this class, in order to stay up to date, please send an email to Florian Madison at your earliest convenience.
- I would like to encourage every student to purchase the book "Money, Payments, and Liquidity" (2nd ed) by Guillaume Rocheteau and Ed Nosal prior to the block week.
Information
Lecturer | Dr. Florian Madison [contact] |
Assistant | Romina Ruprecht [contact] |
Dates | Lecture: February 12-16, 2018 (block week - all day) |
Room | WWZ S13 - HG.35 |
Application | Applications for this course need to be sent to florian.madison-at-unibas.ch by February 14, 2018. As soon as you are admitted to the course, you have to enrol in MOnA. |
Slides | ADAM |
Schedule
Date | Topic |
12.02. | 09:00-12:00: Introduction: Liquidity in Macroeconomics 14:00-16:00: Baseline Environment 16:00-18:00: Pure Credit Economies |
13.02. | 09:00-12:00: Pure Credit Economies 14:00-18:00: Shi-Trejos-Wright: A Second Generation Monetary Model |
14.02. | 09:00-12:00: Exercises I 14:00-18:00: Lagos and Wright: A Third Generation Monetary Model |
15.02. | 09:00-10:30: Lagos and Wright: A Third Generation Monetary Model 10:30-12:00: Monetary Policy, the Friedman Rule, and the Cost of Inflation 14:00-18:00: Exercises II |
16.02. | 09:00-12:00: Monetary Policy, the Friedman Rule, and the Cost of Inflation 14:00-16:00: Exercises III 16:00-18:00: Q&A / Presentation Assignment |
15.03 | Written Exam - 10:00-11:30 AM (room tbd) |
13.04/ | Presentations of individual papers (participation is mandatory) |
*preliminary and subject to changes.
Additional material:
- Kiyotaki and Wright: A First Generation Monetary Model
- Introduction to Dynamic Programming (Envelope Theorem).
Literature
The lecture is based on the book "Money, Payments, and Liquidity" (2nd ed) by Guillaume Rocheteau from the University of California-Irvine and Ed Nosal from the Federal Reserve Bank of Chicago, MIT-Press.
Stephen Williamson and Randall Wright discuss the foundations of New Monetarist Economics in two articles worth reading:
An impeccable overview over the whole field was recently published by Ricardo Lagos, Guillaume Rocheteau, and Randall Wright in the Journal of Economic Literature:
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.
Individual papers: to be announced.
Presentations
Links
Randall Wright: http://www.ssc.upenn.edu/~rwright/
NBER homepage: http://www.nber.org/
JSTOR homepage: http://www.jstor.org/cgi-bin/jstor/listjournal
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