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2016/2017  KAN-COECV3008U  Monetary Policy

English Title
Monetary Policy

Course information

Language English
Course ECTS 7.5 ECTS
Type Elective
Level Full Degree Master
Duration One Semester
Start time of the course Autumn
Timetable Course schedule will be posted at calendar.cbs.dk
Study board
Study Board for MSc in Advanced Economics and Finance
Course coordinator
  • Mauricio Prado - Department of Economics (ECON)
Main academic disciplines
  • Economics
Last updated on 12-02-2016
Learning objectives
To achieve the grade 12, students should meet the following learning objectives with no or only minor mistakes or errors:
  • explain the different models of monetary policy and their assumptions
  • use the models presented in the course to explain the effects of different monetary policies and shocks on the economy
Course prerequisites
Please note that this course assumes students’ knowledge of calculus/optimization. It is highly desirable that students have taken a graduate-level course of macroeconomics (like Macroeconomics The Global Economy or Advanced Macroeconomics) or similar curriculum.
Monetary Policy:
Exam ECTS 7,5
Examination form Written sit-in exam
Individual or group exam Individual exam
Assignment type Written assignment
Duration 4 hours
Grading scale 7-step scale
Examiner(s) One internal examiner
Exam period Winter
Aids allowed to bring to the exam Closed book: no aids:
  • Written sit-in-exam with pen and paper
Make-up exam/re-exam
Same examination form as the ordinary exam
If the number of registered candidates for the make-up examination/re-take examination warrants that it may most appropriately be held as an oral examination, the programme office will inform the students that the make-up examination/re-take examination will be held as an oral examination instead.
Description of the exam procedure

No calculators or dictionaries allowed.

Course content and structure

The course provides an overview of models in monetary economics, with a special emphasis on New Keynesian models and their implications for monetary policy.



_ Classical Monetary Model

_ The Basic New Keynesian Model

_ Monetary Policy Design in the Baseline Model

_ Monetary Policy Tradeoffs: Discretion versus Commitment

_ A Model with Sticky Wages and Prices

_ Unemployment in the New Keynesian Model

_ Monetary Policy in the Open Economy

Teaching methods
The course is composed of 12 weekly three-hour classes. These class activities will involve derivation and analysis of models and problem-solving exercises.
Student workload
Preparation / exam 170 hours
Classes 36 hours
Expected literature

Jordi Gali (2015): Monetary Policy, Inflation and the Business Cycle. An Introduction to the New Keynesian Framework, Princeton University Press (Princeton, NJ), ISBN: 9780691164786.


Further recommended readings and journal articles will be posted in Learn.

Last updated on 12-02-2016