Monetary Policy, Spring 2001

A second-year graduate topics course on Monetary Policy in the Stockholm Graduate Program in Economics, spring 2001.

Teachers: Paul Söderlind (part 1) and Lars E.O. Svensson (part 2)

Office Hours: By appointment.

Schedule: Tuesday, 9:00-12:00 (and Wed, Mar 14, 14:00-1700)
First class: Tue, Jan 23, 2001. Last class: Wed, Mar 14. No class on Feb 27, instead class on Wed, Mar 14, 14:00-17:00.

Exam: Tuesday, Mar 20, 9:00-14, Brunnsvikssalen, bldg A, Stockholm University
2nd Exam: Thursday, May 31.

Prerequisites: Students are expected to be familiar with the material in 1st year courses.

Part 1 (see separate homepage) will be taught by Paul Söderlind during the first two lectures.

Part 2 will be taught by Lars Svensson during the next six lectures, starting Feb 6. Lecture notes in the form of overhead slides will be provided before each lecture.

Topics in part 2

Introduction. A framework for the analysis of monetary policy
The transmission mechanism of monetary policy
The evolution of monetary-policy rules
Inflation-forecast targeting
Price-level targeting
Monetary policy under uncertainty
The role of money in the transmission mechanism. The monetary-policy strategy of the Eurosystem
The zero bound on nominal interest rates. Liquidity traps. Monetary policy in Japan.

Lecture notes

Lecture notes 1
Notes on Optimization under Commitment and Discretion
Lecture notes 2
Lecture notes 3
Lecture notes 4
Lecture notes 5
Lecture notes 6
Lecture notes 7
Lecture notes 8

Readings for part 2 (final)

One and two stars denote required readings. Items with two stars should be read very thoroughly; items with one star can be read less thoroughly. No star denotes suggested readings for further studies.

Students are expected to download most of the readings from the web.

NBER Working Papers can be downloaded here.
Lars Svensson's papers can be downloaded from his homepage.
Paul Söderlind's papers can be downloaded from his homepage.
Mike Woodford's papers can be downloaded from his homepage.
Articles a few years old in several journals (including AER, Econometrica, JEP) can be downloaded from JSTOR.
Articles in many North-Holland Journals (including EER, JME) can be downloaded here.
More journals here.
Central-bank working papers and articles can be downloaded from each bank.
IMF working papers and other publications can be downloaded here.
Some papers presented at various conferences can be found here.
Some papers can be downloaded from a page on a previous course here.
Some restricted material will be available here (user id and password announced in class).
Also, check the homepages of authors, also for updates and new work.

The papers and articles that cannot be downloaded will be made available to students separately.

Problem set (to be returned no later than Friday, March 23)

Problem/Questions (some problems/questions to test yourselves)

Note that list of typos in the course material should be returned no later than Friday, March 23)

Errors: Please email Lars Svensson about errors on this page, for instance in the reading list and URLs.

Sime links: Central banks | Bernkopf's list of central banks | Conferences | NBER Working Papers | Personal homepages

Revised Apr 11, 2001.