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2023/2024  KAN-CMECV1248U  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
Max. participants 50
Study board
Study Board for HA/cand.merc. i erhvervsøkonomi og matematik, MSc
Course coordinator
  • Mauricio Prado - Department of Economics (ECON)
Main academic disciplines
  • Economics
Teaching methods
  • Blended learning
Last updated on 11-09-2023

Relevant links

Learning objectives
  • 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
  • explain the advantages and challenges for Central Banks for implementing their own Digital Currencies
Course prerequisites
It is advisable for the students to have taken a macroeconomics course prior to this elective
Monetary Policy:
Exam ECTS 7,5
Examination form Written sit-in exam on CBS' computers
Individual or group exam Individual exam
Assignment type Written assignment
Duration 4 hours
Grading scale 7-point grading scale
Examiner(s) One internal examiner
Exam period Winter
Aids Closed book: no aids
However, at all written sit-in exams the student has access to the basic IT application package (Microsoft Office (minus Excel), digital pen and paper, 7-zip file manager, Adobe Acrobat, Texlive, VLC player, Windows Media Player), and the student is allowed to bring simple writing and drawing utensils (non-digital). PLEASE NOTE: Students are not allowed to communicate with others during the exam.
Make-up exam/re-exam
Same examination form as the ordinary exam
The number of registered candidates for the make-up examination/re-take examination may warrant that it most appropriately be held as an oral examination. The programme office will inform the students if the make-up examination/re-take examination instead is held as an oral examination including a second examiner or external examiner.
Course content, structure and pedagogical approach

The course provides an overview of models in monetary economics, with a special emphasis on New Keynesian models and their implications for monetary policy. The course will also discuss the possible implementation of Central Bank Digital Currencies.




  • 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
  • Central Bank Digital Currencies


In relation to Nordic Nine principles the course provides a theoretical framework so students can understand, analyze, and communicate monetary policies. And we want our students to be able to participate in interdisplinary work processes to make informed decisions about the business environment. All of this relates to the Value principle that:


“you are critical when thinking and constructive when collaborating”


Second, by the very nature of macroeconomic data and macroeconomic modelling, the course relates to the Knowledge principle that:


“you are analytical with data and curious about ambiguity”


Finally, monetary policy theories taught in this course aim at maximizing welfare to the current and future generations and that directly relates to the Action principle that:


“you produce prosperity and protect the prosperity of next generations”.


Description of the teaching methods
The course is composed of 10 weekly three-hour classes. These class activities will involve derivation and analysis of models. We will also take the opportunity to follow and discuss current monetary policies being conducted by the major central banks in the world (FED, ECB, Bank of England, etc).
Feedback during the teaching period
During some of the lectures, we will solve exercises in class, where there will be opportunities for providing feedback to the students. Moreover, students will be able to receive feedback during regular office hours.
Student workload
Lectures 30 hours
Preparation / exam 176 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 on Canvas 

Last updated on 11-09-2023