Monetary Economics: Theory and Empirics

Instructor:
Efrem Castelnuovo (Professor of Economics at the University of Padova; Bundesbank Guest-Professor at Freie Universität Berlin)

Description:
This 20-hour course aims to equip students with a solid theoretical foundation in monetary economics and the empirical tools necessary to bring theory to the data. The theoretical component builds the core model of monetary policy used by central banks worldwide: the New Keynesian model of the business cycle. This model serves as the basis for deriving theoretical predictions regarding the effects of monetary policy shocks, the role of systematic monetary policy in stabilizing the business cycle, and the trade-offs such policy entails.

The empirical component focuses on two widely used tools in applied macroeconometrics for assessing the effects of monetary policy shocks and the role of systematic monetary policy in mitigating inefficient fluctuations caused by various macroeconomic shocks. These tools are Vector Autoregressive (VAR) models and Local Projections (LP).

By the end of the course, students are expected to be able to conduct independent empirical research using macroeconomic data to analyze the effects of monetary policy impulses.

Literature:
tba

Time & venue:
Lectures: November 18 - 28, 2025; FU Berlin, Garystr. 35-37, Henry-Ford-Bau/K I Konferenzraum

Week 1: November 18-21
November 18 (12:00-16:00)
November 19 (08:00-12:00)
November 20 (08:00-12:00)
November 21 (08:00-12:00)

Week 2: November 25-28
November 25 (12:00-16:00)
November 26 (08:00-12:00)
November 27 (16:00-18:00)
November 28 (08:00-12:00)

For exact information on course timing and venue please see the course schedule.

Exam:
Empirical project (10 pages maximum) plus presentation of a scientific paper to be handed in by December 31, 2025.

Registration:
Interested PhD students may register through the Berlin School of Economics system, as well as by sending an email to buba@wiwiss.fu-berlin.de by October 15, 2025. 

Please not that an application for guest student status must be submitted for all students, who have no FU-Mail-address. Further information can be found on the FU Berlin website.