Upon completion of this course students have a basic understanding of macroeconomic analysis in a dynamic New Keynesian setting. The course will cover the following topics: 

- Intro, review of undergraduate macroeconomic frameworks (IS-LM-AS-AD, IS-LM-PC), monetary (non-)neutrality: ~ 1 lecture

- Stylized facts in monetary economics and motivation for a New Keynesian perspective: Galí (1999, AER), micro-evidence on nominal rigidities: ~1 lecture

- The baseline New Keynesian model (simplified version of Galí book chapter 3 model): Households, Firms under flexible prices, Firms under sticky prices, Equilibrium: ~ 2 lectures

- The baseline New Keynesian model: the Central Bank and the Taylor rule; Taylor principle; IR to monetary shock, IR to productivity shock; optimal monetary policy (strict inflation targeting): ~1-2 lectures

- Policy discussion using the lens of the baseline New Keynesian model: ~1 lecture

- extensions to the baseline New Keynesian model: zero lower bound and unconventional monetary policy: 1 lecture

- extensions to the baseline New Keynesian model: fiscal policy; fiscal multipliers; the role of financing of public expenditure and Ricardian equivalence: 1 lecture

- overview (and/or selective discussion) of extensions to the baseline New Keynesian model: adding capital/ investment; adding labor market frictions (search and matching); adding financial frictions (Kiyotaki and Moore (1997)/ Bernanke, Gertler and Gilchrist (1999); Smets-Wouters style medium-scale macro models; 1-2 lectures

The course is mainly lecture-based. Regular homework assignment and exercises (in groups) will be used to deepen the understanding of the materials discussed.