Online-Live Course across 8 Universities
1. Introduction slides zoom video
2. A Simple Macro-Finance Model in Continuous Time slides zoom video
Problem Set #0 Sannikov Handout: Stochastic Calculus Basics
Problem Set #1 Merkel Review Session slides zoom video
3. Macro-Finance Model with Hetereogenous Agents slides zoom video, Parts: (1), (2), (3)
Problem Set #2 Merkel Handout: Differential Equations
4. A Symmetric International Model with Runs/Sudden Stops slides zoom video
5. A Simple Money Model and Optimal Inflation slides zoom video
6. Money Models with Aggregate and Idiosyncratic Risks slides zoom video
7. The I Theory of Money slides zoom video
The Great Recession led to a transformational rethinking of Monetary Economics. While prior to the Great Recession the key frictions were price stickiness and wage rigidities, the great recession highlighted the importance of financial frictions. Similarly, financial regulation shifted course. Whereas prior to the crisis the focus was on micro-prudential regulation, measuring the soundness and risks of individual banks in isolation, current thinking stresses the importance of macro-prudential regulation with its focus on spillover risks. Several new systemic risk measures were proposed. The course would also cover interaction between monetary policy and macro-prudential policy as well as spillover analysis and the implications for the international financial architecture. This course would (i) expose students to these new research trends and also (ii) contrasts it with the established New Keynesian framework.
In terms of economic methodology, the course would teach students new advanced tools, including formal modeling, economic dynamical systems in continuous time, strategic interactions, asymmetric information, and modern welfare analysis. The empirical component would range from model estimation, calibration to reduced form analysis. There is strong interest from many Ph.D. students, and expect that advanced undergraduate and possibly for Master students will also take this course.