Lecture on Monetary Policy, Spring 2011, Lars E.O. Svensson

Lecture on Monetary Policy, Spring 2011, Lars E.O. Svensson

Spring 2011

Monetary Economics (2nd year Ph.D. course, Uppsala University and the Riksbank) (joint with Nils Gottfries and Johan Söderberg at Uppsala University, and Ulf Söderström and Andreas Westermark at the Riksbank)

Lecture on Practical Monetary Policy by Lars Svensson on Wednesday, May 18, 14:15-17, Room 10:027.

The main reading for this lecture is Svensson (2011a). There will also be some discussion of issues raised in Svensson (2011a) and Ingves (2011). I will not get into any detail about the relation between monetary policy and stability, but anyone interested in that may want to check out Svensson (2010b) and the references there.

Students not familiar with the Riksbank minutes and other material from the monetary policy meetings may want to check out Sveriges Riksbank (2011b).

Some graphs of monetary policy alternatives at the latest meetings are available here.

Lecture notes (preliminary)

Handout 1
Handout 2

Readings: (* denotes required reading)

Adolfson, Malin, Stefan Laséen, Jesper Lindé, and Lars E.O. Svensson (2011), "Optimal Monetary Policy in an Operational Medium-Sized DSGE Model,"Journal of Money, Credit and Banking, forthcoming. PDF.

*Ingves, Stefan (2011), "Flexible Inflation Targeting in Theory and Practice," speech in Stockholm, May 13, 2011. English Swedish

Laséen, Stefan, och Lars E.O. Svensson (2011), "Anticipated Alternative Instrument-Rate Paths in Policy Simulations," forthcoming in International Journal of Central Banking. PDF.

Svensson, Lars E.O. (2003), "Optimal Policy with Low-Probability Extreme Events," in Macroeconomics, Monetary Policy, and Financial Stability - A Festschrift for Charles Freedman, Proceedings of a conference held by the Bank of Canada, Ottawa, June 2003, 79-104. PDF.

Svensson, Lars E.O. (2010a), "Some Problems with Swedish Monetary Policy and Possible Solutions," speech in Stockholm, November 24, 2010. English Swedish

Svensson, Lars E.O. (2010b), "Inflation Targeting and Financial Stability," Policy lecture at the CEPR/ESI 14th Annual Conference on “How Has Our View of Central Banking Changed with the Recent Financial Crisis?”, hosted by the Central Bank of Turkey, Izmir, October 28, 2010. English.

Svensson, Lars E.O. (2010c), "Why a Lower Repo Rate Path?", speech at Umeå University, February 24, 2010. English. Swedish.

*Svensson, Lars E.O. (2011a), "For a Better Monetary Policy: Focus on Inflation and Unemployment," speech at Luleå University of Technology, March 8, 2011. English. Swedish.

*Svensson, Lars E.O. (2011b), "Inflation Targeting," chapter 22 in Friedman, Benjamin M., and Michael Woodford, eds., Handbook of Monetary Economics, Volume 3b, Elsevier. English.

*Sveriges Riksbank (2010), Monetary Policy in Sweden, English Swedish

*Sveriges Riksbank (2011a), "Minutes of April 2011 Meeting", English Swedish

Sveriges Riksbank (2011b) Monetary policy decisions: Meetings, Report/Update, Press Release, and Attributed Minutes. English, Swedish.

Woodford, Michael (2007), "The Case for Forecast Targeting as a Monetary Policy Strategy," Journal of Economic Perspectives 21(4), 3-24.

Updated maj 18, 2011