Lecturer

prof. Clara Graziano clara.graziano@uniud.it

Credits

6 CFU

Departments

Department of Economics and Statistics

Aims

Aim of the course is to provide students with a good knowledge of the fundamental issues in the conduct of monetary policy, both theoretical and applied.
The issues to be addressed include: Demand for money, optimal inflation rate, the adoption of rules versus discretion in the conduct of monetary policy, interaction between fiscal and monetary policy, transmission of monetary policy, financial crisis, monetary policy in a currency union and the role of central banks. Particular attention is devoted to the monetary policy of the EURO area and the role and organization of the European Central Bank.
We also discuss the implications of underlying frictions - such as private information, limited contract enforcement and limited market participation - for the allocation and rationale for policy interventions.
Students are supposed to be familiar with the basic notions macroeconomics such as the IS-LM model and the aggregate demand and aggregate supply model.

Main Texts

• De Grauwe Paul, Economics of the Monetary Union, Oxford University Press 2009.
• Frederic Mishkin, Monetary Policy Strategy, MIT Press 2009

Additional readings

• Estrella and Mishkin (1996) The Yield Curve as a Predictor of U.S. Recessions, Current Issues in Economics and Finance, Federal Reserve Bank New York, vol 2 issue 7.
• M. Dotsey, “Monetary Policy in a Liquidity Trap”, paper available free of charge at www.philadelphiafed.org/research-and-data/publications
• J. Taylor “How The Government created the financial crisis”, Wall Street Journal, February 9th, 2009

Another useful text is

• Freixes and Rochet, Microeconomics of Banking, MIT Press

Further readings will be provided during the course.