{"ModuleCode":"EC4331","ModuleTitle":"Monetary Economics and Policy","Department":"Economics","ModuleDescription":"This course exposes students to tools and concepts used at central banks. The course introduces the New Keynesian Model (NKM) and its recent extensions, familiarizes students with monetary policy analysis using this framework, and discusses empirical evidence and puzzles. Open economy aspects will be highlighted whenever suitable. The theoretical concepts will be applied to historical episodes in monetary policy-making using material issued by central banks, the International Monetary Fund (IMF) or the Bank for International Settlement (BIS).","ModuleCredit":"5","Workload":"0-3-0-6-3.5","Prerequisite":"Cohort 2011 and before: Completed 80 MCs, including 28 MCs in EC, with a minimum CAP of 3.50 or be on the Honours track. EC3102 and EC3332 Cohort 2012 onwards: Completed 80 MCs, including 28 MCs in EC, with a minimum CAP of 3.20 or be on the Honours track. EC3102 and EC3332","Corequisite":"EC4102 or EC4302","CorsBiddingStats":[{"AcadYear":"2015/2016","Semester":"1","Round":"1A","Group":"Seminar-Style Module Class 1","Quota":"40","Bidders":"0","LowestBid":"0","LowestSuccessfulBid":"0","HighestBid":"0","Faculty":"Arts & Social Sciences","StudentAcctType":"Returning Students [P]"},{"AcadYear":"2015/2016","Semester":"1","Round":"1B","Group":"Seminar-Style Module Class 1","Quota":"40","Bidders":"0","LowestBid":"0","LowestSuccessfulBid":"0","HighestBid":"0","Faculty":"Arts & Social Sciences","StudentAcctType":"Returning Students [P]"},{"AcadYear":"2015/2016","Semester":"1","Round":"1C","Group":"Seminar-Style Module Class 1","Quota":"40","Bidders":"0","LowestBid":"0","LowestSuccessfulBid":"0","HighestBid":"0","Faculty":"Arts & Social Sciences","StudentAcctType":"Returning Students [P]"}],"AcadYear":"2015/2016","History":[{"Semester":1,"Timetable":[{"ClassNo":"1","LessonType":"Seminar-Style Module Class","WeekText":"Every Week","DayText":"Monday","StartTime":"0900","EndTime":"1200","Venue":"AS2-0413"}],"IVLE":[{"Announcements":null,"Forums":[],"Workbins":[],"Webcasts":[],"Gradebooks":[],"Polls":[],"Multimedia":[],"LessonPlan":[],"ID":"a55b21a7-8067-4a36-bf4b-e99861c9b047","CourseLevel":"1","CourseCode":"EC4331","CourseName":"MONETARY ECONOMICS AND POLICY","CourseDepartment":"","CourseSemester":"Semester 1","CourseAcadYear":"2015/2016","CourseOpenDate":"/Date(1433347200000+0800)/","CourseOpenDate_js":"2015-06-04T00:00:00","CourseCloseDate":"/Date(1450540740000+0800)/","CourseCloseDate_js":"2015-12-19T23:59:00","CourseMC":"0","isActive":"Y","Permission":"S","Creator":{"UserID":null,"Name":"Bodenstein Martin Rudolf","Email":null,"Title":null,"UserGuid":"6dc0e9b5-b03d-4837-8b30-1438a5756bc3","AccountType":null},"hasGradebookItems":false,"hasTimetableItems":true,"hasGroupsItems":false,"hasClassGroupsForSignUp":false,"hasGuestRosterItems":false,"hasClassRosterItems":false,"hasWeblinkItems":false,"hasLecturerItems":true,"hasDescriptionItems":true,"hasReadingItems":false,"hasAnnouncementItems":false,"hasProjectGroupItems":false,"hasProjectGroupsForSignUp":false,"hasConsultationItems":false,"hasConsultationSlotsForSignUp":false,"hasLessonPlanItems":false,"Badge":0,"BadgeAnnouncement":0,"WebLinks":[],"Lecturers":[{"ID":"4ed92108-2670-40b4-bfb9-23210772ff1e","User":{"UserID":null,"Name":"Bodenstein Martin Rudolf","Email":null,"Title":null,"UserGuid":"6dc0e9b5-b03d-4837-8b30-1438a5756bc3","AccountType":null},"Role":"Lecturer ","Order":1,"ConsultHrs":null}],"Descriptions":[{"ID":"1e5f053b-8835-4692-be49-41f07234cfff","Title":"Learning Outcomes","Description":"Students learn to derive, analyse, and interpret the New Keynesian framework, the predominant model used in central banking. With respect to methodology, students will learn how to solve linearized rational expectations models.","Order":1},{"ID":"2e5f053b-8835-4692-be49-41f07234cfff","Title":"Prerequisites","Description":"Cohort 2011 and before: Completed 80 MCs, including 28 MCs in EC, with a minimum CAP of 3.50 or be on the Honours track. EC3102 and EC3332\r\n\r\nCohort 2012 onwards: Completed 80 MCs, including 28 MCs in EC, with a minimum CAP of 3.20 or be on the Honours track. EC3102 and EC3332","Order":2},{"ID":"3e5f053b-8835-4692-be49-41f07234cfff","Title":"Teaching Modes","Description":"The course will be taught in a lecture-tutorial format.","Order":3},{"ID":"4e5f053b-8835-4692-be49-41f07234cfff","Title":"Schedule","Description":"Week 1 Introduction and motivation; central banking; reviewing monetary policy in the IS-LM framework. (Lecture Slides, Gali Chapter 1)
\nWeek 2 (Ir-)relevance of money: laying out the classical model with flexible prices and money in the utility function; steady state analysis and monetary neutrality; deriving the (linearized) classical model with flexible prices and money in the utility function; dynamic implications of the model. (Lecture Slides, Gali Chapter 2)
\nWeek 3 (Ir-)relevance of money continued.
\nWeek 4 Discussion of Problem Set 1
\nWeek 5 The NKM: extending the classical model with money in the utility function to allow for monopolistic competition, sticky prices; steady state analysis; deriving the (linearized) NKM; dynamic implications of the model. (Lecture Slides, Gali Chapter 3)
\nWeek 6 Discussion of Problem Set 2
\nWeek 7 Midterm examination
\nWeek 8 Monetary policy in the NKM: more on solving and analyzing dynamic models; stability analysis of linear models; introducing consumption, government spending, and cost-push shocks and analyzing their dynamic implications. (Lecture Slides, Gali Chapter 4, 5)
\nWeek 9 Optimal monetary policy in the NKM: the time inconsistency problem and optimal policy under commitment and discretion with and without the zero lower bound on the nominal interest rate; forward guidance, balance sheet policies, and fiscal policy in the NKM. (Lecture Slides, Gali Chapter 5)
\nWeek 10 Discussion of Problem Set 3
\nWeek 11 Instrument rules and targeting regimes: analysis of instrument rules and targeting frameworks, monetary policy design. (Lecture Slides, Gali Chapter 5)
\nWeek 12 Extending the NKM to open economy: a small open economy version of the NKM; exchange rate policy in the NKM: fixed, managed, and flexible exchange rates with special emphasis on the policies adopted by the Monetary Authority of Singapore (MAS). (Lecture Slides + Notes, Gali Chapter 7)
\nWeek 13 Discussion of Problem Set 4.","Order":4},{"ID":"5e5f053b-8835-4692-be49-41f07234cfff","Title":"Synopsis","Description":"This course in monetary economics and policy familiarizes students with tools and concepts used at central banks. The course introduces the New Keynesian Model (NKM) and its recent extensions, familiarizes students with monetary policy analysis using this framework, and discusses empirical evidence and puzzles. Open economy aspects will be highlighted whenever suitable. The theoretical concepts will be applied to historical episodes in monetary policy-making using material issued by central banks, the International Monetary Fund (IMF) or the Bank for International Settlement (BIS).
\nThe course makes intensive use of linear algebra, multivariate calculus, integration theory, static and dynamic optimization theory, and linear difference equations. While students are not expected to be familiar with all these mathematical concepts, they will encounter during the course, they are expected to gain sufficient knowledge how to apply them over the course. Concepts deemed new to students will be introduced in class and homework questions. Students who want to refresh their understanding of key mathematical concepts may find the textbook Fundamental Methods of Mathematical Economics by Alpha C. Chiang or any comparable text helpful.
\nThis course is conceptually and mathematically very demanding and students may encounter difficulties to stay on top of the material. To avoid misunderstandings and irritations on your side, please feel free to contact me if you have doubts about taking this module.","Order":5},{"ID":"6e5f053b-8835-4692-be49-41f07234cfff","Title":"Syllabus","Description":"EC 4331: Monetary Economics and Policy
\nSemester I, 2015-2016
\n
\nInstructor: Martin Bodenstein
\nOffice: Department of Economics, Block AS2-06-18
\nEmail: ecsbmr@nus.edu.sg
\nWebsite: http://sites.google.com/site/martinbodenstein/
\nLecture: TBA
\nOffice hours: TBA
\n
\nCourse Description
\nThis course in monetary economics and policy familiarizes students with tools and concepts used at central banks. The course introduces the New Keynesian Model (NKM) and its recent extensions, familiarizes students with monetary policy analysis using this framework, and discusses empirical evidence and puzzles. Open economy aspects will be highlighted whenever suitable. The theoretical concepts will be applied to historical episodes in monetary policy-making using material issued by central banks, the International Monetary Fund (IMF) or the Bank for International Settlement (BIS).
\nThe course makes intensive use of linear algebra, multivariate calculus, integration theory, static and dynamic optimization theory, and linear difference equations. While students are not expected to be familiar with all these mathematical concepts, they will encounter during the course, they are expected to gain sufficient knowledge how to apply them over the course. Concepts deemed new to students will be introduced in class and homework questions. Students who want to refresh their understanding of key mathematical concepts may find the textbook Fundamental Methods of Mathematical Economics by Alpha C. Chiang or any comparable text helpful.
\nThis course is conceptually and mathematically very demanding and students may encounter difficulties to stay on top of the material. To avoid misunderstandings and irritations on your side, please feel free to contact me if you have doubts about taking this module.
\n
\n
\n
\nPrerequisites
\nCohort 2011 and before: Completed 80 MCs, including 28 MCs in EC, with a minimum CAP of 3.50 or be on the Honours track. EC3102 and EC3332
\nCohort 2012 onwards: Completed 80 MCs, including 28 MCs in EC, with a minimum CAP of 3.20 or be on the Honours track. EC3102 and EC3332
\n
\nCo-requisites
\nEC4102 OR EC4302
\n
\nAssessment
\n