Syllabus

The course offers a comprehensive introduction to various topics in monetary macroeconomics, from both a theoretical and empirical perspective. This course is part of the specialization in Money, Credit and Finance, which can be taken together with PI Research and Policy Seminar in Money, Credit and Finance. This course will be lecture based, introducing the relevant models and providing the tools needed to later on conduct small research projects. For students who intend to later on write their MA thesis in this area, it is strongly advised to enroll in both this (lecture-based) course, as well as in the research and policy seminar, i.e. to do the full specialization. 

The lectures on the theory part (taught by Katrin Rabitsch) will focus on the baseline New Keynesian model and simple extensions, and on simple models of introducing financial frictions into macroeconomic modelling frameworks. The teaching approach is very hands-on, i.e. students will become familiar with solving and analyzing (and estimating) DSGE models on the computer. The lectures on the empirical part (taught by Fabio Rumler) focuses on macroeconometric methods needed to analyze the conduct of monetary policy.

In the Research and Policy seminar (https://learn.wu.ac.at/dotlrn/classes/pool/5977.19s/syllabus/; not part of this course) students gain hands-on-experience through an independent research project that comprises writing a seminar thesis and giving a presentation of the research outcome.

The aim of the course is to introduce students to the following important topics:

1. Conventional and unconventional monetary policy
2. The monetary transmission mechanism
3. The New Keynesian model for policy analysis
4. Financial frictions in macroeconomic models
5. Inflation forecasting

Introduce students to key topics in monetary economics, international macroeconomics and monetary policy analysis from a theoretical and practical perspective. Students are encouraged to pursue their own research agenda which should provide valuable help in writing a MSc. thesis. Moreover, students gain hands-on experience using modern tools in solving dynamic stochastic general equilibrium (DSGE) models as well as in modern econometric tools that are commonly used in central banks and other policy institutions.

Attendance is compulsory.

The course is based on lectures on theoretical monetary macroeconomic models and on the econometric models. 

Grading is based on:

• active classroom participation (10%)
• small homework assignments (30%)
• a final exam on the theory part (30%)
• a final exam on the empirical part (30%)

• For the theory part of the course:
  • if you are a student of the new english MA in Economics program, applied track: firm knowledge of the contents of 'Macroeconomic Models and Methods'
  • if you are a student of the new english MA in Economics program, science track: participation in the Advanced Macro II course (which takes place contemporaneously in the summer term 2019)
  • if you are a student of the old german MA in Economics program (applied or science track): you are very much welcome to enroll in this course! Nevertheless, in this case, I advise interested students to participate in the first 5-6 classes of the "Advanced Macroeconomics II" course, since our course assumes some prior knowledge of these contents; some refreshment of the math course, especially optimization (Lagrangians, First Order Conditions) is advantageous
• Knowledge in time series econometrics at the undergraduate level:
  • Especially univariate time series models (AR(p), MA(q), random walks)
  • Knowledge of maximum likelihood estimation is a plus, but not needed

katrin.rabitsch@wu.ac.at