Description:
Lectures by Alexander Kriwoluzky (Part 1): Monetary & fiscal policy
In recent years, monetary and fiscal policy have been at the centre of most political debates. The 2019 pandemic prompted central banks to cut their interest rates quickly, drawing on the lessons of the Great Financial Crisis. At the same time, many governments launched huge stimulus packages, leaving many economies with high levels of public debt. In times of low interest rates, high public debt is of little concern to (fiscal) policymakers.
The invasion of Ukraine led to a surge in energy prices and thus inflation. Central banks responded by raising interest rates again to fight inflation. This action could have consequences for fiscal policy - and, as the course will show, for monetary policy as well.
In this course, we begin by discussing the reasons why monetary and fiscal policymakers have reacted as they have in recent years. To this end, we will identify monetary and fiscal policy shocks and discuss their effects and transmission in the economy. Finally, we will show how they are linked and how they interact.
Lectures by Britta Gehrke (Part 2): Labor, frictions & micro2macro
The objective of this course is to enable Master and PhD students to think about labor markets and unemployment from a macroeconomic perspective. Given that roughly two thirds of GDP come in the form of wage income, that most households live of labor income, and that finding workers becomes increasingly difficult for firms, labor markets are of first order importance for macroeconomic outcomes. Labor markets are a key source of heterogeneity because they determine a household’s employment history, income and wealth. As a result, they interact with the conduct of fiscal and monetary policy.
First, this course aims to introduce students to the workhorse model in modern macro/labor: search frictions that generate unemployment as an equilibrium outcome. We will also discuss wage bargaining. These tools and methods are also applicable to other areas, such as financial markets. Second, the course will introduce students to current research that combines quantitative macroeconomic models with microeconomic data. Microeconomic data on workers and firms have become increasingly important in macro/labor, but also far beyond that. Students will present and discuss
selected papers.
See syllabus for further information.
Literature:
See syllabus
Time & venue:
Lectures/ tutorials: Wednesdays, 8:30-12:00; DIW Berlin, Mohrenstr. 58, Karl-Popper Room
Grading:
Grading in each part will be based on class participation (50%) and a term paper on an original idea based on the methods we have studied in class (50%). A student must pass each part of the class, i.e. achieve a minimum of 50% of the points. The term paper can be written on topics from either part of the course, but the distribution of topics must be balanced.
