Monetary Economics (Macro VI) - Spring 2010
Old Midterms: 2008.2, 2009.1 , 2009.2
Old Finals: 2008.2, 2009.1 , 2009.2
Old Tests: Test 1 2009.1, Test 1 2009.2, Test 1 2010.1 (w/ solutions), Test 3 2009.1
Guide to Midterm, Guide to Final
§ Indicate required reading
1. Money and Prices
§ Slides: Money and Price Level Determination
§ The Cagan Model: Lectures Notes, Problem set #1
The Sidrauski Model: Problem set #2 (optional)
2. Dynamic Inconsistency
§ Handouts: Paul Volcker's Disinflation; Stabilization Policy and Dynamic Inconsistency
§ Lecture Notes: Dynamic Inconsistency, Stabilization Policy and Consumption Fluctuations
§ Examples and Problem sets: Problem set #3, Problem set #4
Barro, R. and D. Gordon, (1983), "Rules, Discretion and Reputation in a model of monetary policy", Journal of Monetary Economics, 12 (July):101-121.
Kydland, F. and Ed Prescott, (1997), "Rules rather than discretion: The inconsistency of optimal plans", Journal of Political Economy, 85 (June):473-492.
Rogoff, K. (1985), "The optimal degree of commitment to an intermediate monetary target", Quarterly Journal of Economics, 100 (November): 1169-1189.
Romer, D. (2006), "Advanced Macroeconomics", chapter 10, McGraw-Hill Irwin, New York.
3. Monetary Policy Rules
Romer, D. (2006), "Advanced Macroeconomics", chapter 10, pp. 525-527, McGraw-Hill Irwin, New York.
Taylor, J. (1993), "Discretion versus policy rules in practice", Carnegie-Rochester Conference Series on Public Policy, 39, pp. 195-214, North-Holland.
4. Liquidity Trap, The Great Depression, The Japanese Slump
§ Slides: The Great Depression and the Japanese Slump
Ben Bernanke - Deflation: Making sure "it" doesn´t happen here
§ Ben Bernanke - Money, Gold, and the Great Depression
5. The 2007-20?? Global Financial Crisis
§ Notes on the Global Financial Crisis
§ Bernanke, Ben - The Global Saving Glut, Remarks by Governor B. Bernanke, at the Sandridge Lecture, Virginia Association of Economics, Richmond, Virginia, April 14, 2005.
§ Bernanke, Ben - Monetary Policy and the Housing Bubble, Presentation at the Annual Meeting of the American Economic Association, Atlanta, Georgia, January 3, 2010.
§ Brunnermeier, Markus, (2008), "Deciphering the Liquidity and Credit Crunch 2007-08", NBER working paper #14612.
§ Rogoff, K., and C. Reinhart, (2008), "The Aftermath of Financial Crisis", NBER working paper #14656.
§ Rogoff, K., and C. Reinhart, (2008), "Is the 2007 U.S. Subprime Crisis so Different? An International Comparison", American Economic Review P&P, Vol. 98(2), pp. 339-344. Also available as a NBER working paper #13761.
Rogoff, K., and C. Reinhart, (2009), "This Time is Different, Eight Centuries of Financial Folly", Princeton University Press, Princeton, New Jersey, NJ.
6. New Keynesian Models
§ Benigno, Pierpaolo, (2009), "New Keynesian Economics: an AS-AD View", NBER working paper #14824.
Carlin, W., and D. Soskice, (2005), "The 3-Equation New Keynesian Model - A Graphical Exposition", The B. E. Journal in Macroeconomics, vol 5, issue 1, article 13 (Contributions).
Clarida, R., Jordi Gali, and Mark Gertler, (1999), "The Science of Monetary Policy: A New Keynesian Perspective", Journal of Economic Literature, December 37(4), pp. 1661-1707.
§ Romer, D., 2000, "Keynesian Macroeconomics without the LM Curve", Journal of Economic Perspectives, vol. 14, Spring, pp. 149-169.
§ Walsh, Carl, (2002), "Teaching Inflation Targeting: An Analysis for Intermediate Macro", Journal of Economic Education 33 (4), pp. 333-347.
7. Inflation Targeting in Brazil (Lectures will be given at the computer lab)
§ We will have four lectures on the computer lab (3 lectures with EViews + test III)
§ Bogdanski, Joel, A. Tombini, and S. Werlang (2000), "Implementing Inflation Targeting in Brazil", Discussion paper #1, Central Bank of Brazil.
Fraga, Armínio, Ilan Goldfajn, and André Minella, (2003), "Inflation Targeting in Emerging Market Economies", Discussion paper #76, Central Bank of Brazil.
Minella, André, Paulo Freitas, Ilan Goldfajn, and
Marcelo Muinhos, (2002), "Inflation Targeting in
Brazil: Lessons and Challenges",
Discussion paper #50, Central Bank of Brazil.
8. Inflation Targeting in Industrial and Emerging Markets
Slides: Two currency crises: Mexico and Argentina; The material in these slides illustrate the problems of adopting the exchange rate as the nominal anchor.§ Ball, L., and N. Sheridan (2003), "Does inflation targeting matter?", in M. Woodford and B. Bernanke, eds., The Inflation Targeting Debate, NBER, 2005.
Bernanke, Ben, T. Laubach, F. Mishkin, A. Posen, (1999), "Inflation Targeting, Lessons from the International Experience", Princeton University Press.
§ IMF, (2005), "Does inflation targeting work in emerging markets?", chapter 4, World Economic Outlook.
9. Fiscal Dominance
§ Blanchard, O. (2004), "Fiscal Dominance and Inflation Targeting: Lessons from Brazil", NBER working paper #10389.
Carneiro, Dionísio, and T. Wu (2005), "Dominância fiscal e desgaste do instrumento único de política monetária no Brasil", Discussion paper #7, Instituto de Política Econômica, Casa das Garças.