Business Cycles and Monetary Policy

Introduction

This course is a graduate level course in macroeconomics, allowing theory to meet data. More particularly, this course emphasizes economic fluctuations and policies motivated by business cycle fluctuations. Key questions regard whether swings in economic growth and employment are associated with a sustainable use of economic resources over time. 

The approach adopted in this course emphasizes the dynamic dimension of interesting applied macroeconomic problems. Participants will be introduced to digital tools used in modern quantitative macroeconomics.

Course content

1. Stylized facts of business cycles

• Measuring business cycles - some methods to detrend data
• Computing business cycle statistics
• Using facts to discipline and distinguish models

2. Introduction to advanced theories of business cycles

• Real Business Cycle models
• Solving models numerically (with a computer)
• The New Keynsian Model
  • Nominal Rigidities
  • The New Keynsian Phillip's Curve

3. Monetary policy

• Taylor Rule
• Different Regimes: Commitment vs. Discretion
• Monetary Policy in Practice
• Green Monetary Policy

4.  Fiscal policy

• Ricardian equivalence
• Neo-classical fiscal multiplier
• New Keynesian fiscal multiplier
• Empirical estimates of the fiscal multiplier