| Detailed information |
| Pre-requisites |
(*)keine (die Zulassung zum Studium vorausgesetzt)
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| Original study plan |
Master's programme Economics 2019W |
| Objectives |
The goal of this course is to familiarize students with the Dynamic General Equilibrium (DGE) model – the workhorse model in modern theoretical macroeconomics – and to show how it can be employed for monetary policy analysis. The DGE model represents an attempt to account for the optimizing behavior of economic agents at the household or firm level and its implications for the economy as a whole. As a consequence, it provides so-called microeconomic foundations for macroeconomic concepts such as aggregate consumption or real GDP.
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| Subject |
- Introduction: DGE vs. Traditional Macroeconomics
- The Centralized Economy
- The Decentralized Economy
- The Monetary Economy
- Imperfectly Flexible Prices
- The Basic New Keynesian Model
- Monetary Policy in the New Keynesian Model
- Monetary Policy Tradeoffs: Discretion vs. Commitment
- Unconventional Monetary Policy, Asset Pricing, or Financial Frictions in Macroeconomics (according to students’ interests)
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| Criteria for evaluation |
Homework Assignments, Written Exam
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| Methods |
Dynamic General Equilibrium Modelling
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| Language |
English |
| Study material |
Michael Wickens (2012): Macroeconomic Theory – A Dynamic Stochastic General Equilibrium Approach; 2nd Edition
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| Changing subject? |
No |
| Further information |
This course requires a fundamental knowledge of analytical tools, such as difference and differential calculus and optimization under constraints. Students’ knowledge of these tools and how to use them are refreshed through applications in class and occasional homework assignments.
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