Monetary Policy

Module Lead: Christophz Gortz

Credits: 10

Introduction and module objectives:

Monetary Policy investigates the empirical relationships between money growth, output growth and in?ation in a variety of macroeconomic settings. It begins by covering the functions of money and the links between money and in?ation, looking at both short-run and long-run relationships. The role of imperfect competition and price rigidities are analysed, along with new Keynesian models which consider price setting in the context of the New Keynesian Phillips curve. The module concludes by assessing the optimal design of economic policy by discussing the objectives and instruments of monetary policy. The theory and practice of monetary policy in recent years are examined in a global context.

Learning outcomes:

By the end of the module students should be able to:

  • Demonstrate a systematic understanding of monetary policy theory;
  • Critically evaluate the dilemmas and constraints facing monetary policy makers;
  • Demonstrate an in-depth knowledge and understanding of the monetary transmission mechanism for macroeconomic behaviour and policy;
  • Appraise and synthesise the current macroeconomics literature on monetary policy;
  • Have a comprehensive understanding of the role of financial intermediaries in macroeconomics.

Method of assessment:

  • One hour mid-module class test (20%)
  • Two hour unseen written examination (80%)