Topics in Macroeconomics - JEM173

• Title: Topics in Macroeconomics
• Czech title: Topics in Macroeconomics
• Guaranteed by: Institute of Economic Studies (23-IES)
• Faculty: Faculty of Social Sciences
• Actual: from 2016 to 2019
• Semester: summer
• E-Credits: 6
• Examination process: summer s.:combined
• Hours per week, examination: summer s.:2/2, Ex [HT]
• Capacity: 40 / 40 (40)
• Min. number of students: unlimited
• 4EU+: no
• Virtual mobility / capacity: no
• State of the course: taught
• Language: English
• Teaching methods: full-time
• Teaching methods: full-time
• Note: course can be enrolled in outside the study plan; enabled for web enrollment; priority enrollment if the course is part of the study plan
• Guarantor: Mgr. Nikoloz Kudashvili, Ph.D.
• Teacher(s): Mgr. Nikoloz Kudashvili, Ph.D.
• Class: Courses for incoming students
• Incompatibility : JEM097
• Interchangeability : JEM097
• Is incompatible with: JEM097
• Is interchangeable with: JEM097

Annotation

Last update: Mgr. Nikoloz Kudashvili, Ph.D. (18.01.2017)

The course will focus on the interactions of fiscal and monetary policies and implications of imperfect information in macroeconomics. In particular, models of signal extraction, sticky information, sticky prices and rational inattention will be covered. Topics on fiscal multipliers and policies at the zero lower bound will be also discussed during the semester.

Course completion requirements

Last update: Mgr. Nikoloz Kudashvili, Ph.D. (19.02.2021)

Participation and attendance - 10%

Problem Sets - 20%

Term project - 30%

Final exam - 40%

Pass: both 50% of total points and 50% of final exam

Literature

Last update: Mgr. Nikoloz Kudashvili, Ph.D. (18.01.2017)

Textbooks:

Gali, Jordi (2007), Monetary Policy, Inflation and the Business Cycle.

 

Papers:

Calvo, G.: Staggered Prices in a Utility-maximizing Framework. Journal of Monetary Economics, 1983.

Corsetti, G., Muller G.: Fiscal Multipliers: Lessons from the Great Recession for Small Open

Economies. Report to the Royal Swedish Fiscal Policy Council 2015.

Lucas, R.E.: Some International Evidence on Output-Inflation tradeoffs. American Economic Review, 1973.

Mankiw N.G., Reis R.: Sticky Information Versus Sticky Prices: A Proposal to Replace the New  Keynesian Phillips Curve. Quarterly Journal of Economics, 2002.

Sims, C.A.: Implications of Rational Inattention. Journal of Monetary Economics, 50, 2003.

Sims, C.A.: Rational Inattention: A Research Agenda. 2005.

Teaching methods

Last update: Mgr. Nikoloz Kudashvili, Ph.D. (04.02.2021)

Lectures and exercise sessions (seminars)

 

https://cesnet.zoom.us/j/91443501608?pwd=WDZqcnc0TjRya2FKd2FtbmVwc2hNUT09

Meeting ID: 914 4350 1608
Passcode: 192879
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Meeting ID: 914 4350 1608
Find your local number: https://cesnet.zoom.us/u/adpZVASByU

 

Syllabus

Last update: Mgr. Nikoloz Kudashvili, Ph.D. (23.04.2021)

Holiday [H]; Rector's day-off [R]; Dean's day-off (D)  in February - May 2021.

1. Friday, April 2, 2021        [H]

2. Monday, April 5, 2021      [H]

3. Friday, April 30, 2021      [D]

4 Wednesday May 12, 2021   [R]

 

Lecture 1  - February 19

Seminar 1 - February 19

 

Lecture 2  - February 26

Seminar 2 - February 26

 

Lecture 3   - March 5

Seminar 3 -  March 5

 

Lecture 4  - March 12

Seminar 4 - March 12

 

Lecture 5  - March 19

Seminar 5 - March 19

 

Lecture 6  - March 26

Seminar 6 - March 26

 

Lecture 7  - April 9

Seminar 7 - April 9

 

Lecture 8  - April 16

Seminar 8 - April 16

 

Lecture 9   - April 23

Seminar 9 - April 23

 

Lecture 10  - May 7

Seminar 10 - May 7

 

Lecture 11  - May 14

Seminar 11 - May 14

 

 

Notes:

 

The following questions will be addressed in the class:

Why do prices tend to be sticky in the long-run?

What are benchmark models for analyzing inflation-output tradeoffs?

What is the optimal price setting under the assumption of sticky prices?

What is the optimal price setting under the assumption of sticky prices?

What is the optimal price setting under the assumption of rational inattention?

What is the output responsiveness to fiscal shocks? How do we measure fiscal multipliers? How

is the size of fiscal multipliers varying on the exchange rate regime and public policy?

What happens to fiscal multipliers if zero lower bound on nominal interest rate binds?

Content

1. Introduction to information economics

2. Models on inflation-output trade-off

3. Models on sticky information

4. Models on sticky prices

5. Models on rational inattention

6. Fiscal multipliers and their size

 

Week 1
Classical monetary theory

Week 2
Introduction to a New Keynesian Models

Log-linearization

Week 3
New Keynesian Models: Firm's problem; Household's problem

Week 4
New Keynesian Models, Value Functions - Bellman Equation

Week 5
New Keynesian Models, Calvo Price setting: aggregate and optimum price dynamics

Week 6
New Keynesian Models: Equilibrium

Week 7
New Keynesian Models: impulse response functions;
Concluding Remarks on

Week 8
Critical Examination of the Basic New Keynesian Model;
Lucas Islands Model

Week 9
Sticky prices vs Sticky info;Introduction to Information Theory

Week 10
Rational Inattention

Week 11
RI: Costly Information

Week 12
RI: Dynamic Setup