Syllabus
1. Introduction and motivation
2. Approximation and solution techniques
3. The basic New Keynesian model
4. Optimal monetary policy
5. Zero lower bound on nominal interest rates A more detailed description of the course content can be found in the file "syllabus".
Annotation
The course is intended for master students with orientation in economic modelling. The course will introduce New Keynesian dynamic stochastic general equilibrium (DSGE) models as well as the basic tools needed for their construction and implementation.
The course employs a practical and very intensive approach to model building. Students will build a DSGE model step-by-step: students will solve optimisation routines of households, derive the optimal price setting of firms, or introduce a monetary policy rule in the model among others. On top of that, we will discuss other special topics, such as the optimal setting of monetary policy or the zero lower bound. Students will acquire practical hands-on experience in building DSGE models which will allow them to build and implement their versions of DSGE models using Matlab and Dynare toolbox.
The course consists of lectures and seminars. During the lectures, students will be introduced into the theoretical background of modelling and derivation of models. During the seminars, students will get an opportunity to implement acquired knowledge in MATLAB-based practice sessions. Moreover, several guest lectures will demonstrate the practical implementation of DSGE models in policy analysis.