Instructor:
Prof. Gernot Müller (Professor at the Universität Tübingen; Bundesbank Guest-Professor)
Description:
In this course we study key issues of open-economy business cycles through the lens of the New Keynesian model. The focus is on model development. We put forward and solve a two-country version of the canonical New Keynesian model, with a particular emphasis on closed-form solutions. Numerical solutions are also considered, but briefly.We study a number of special cases, including but not limited to the smallopen economy w/ and w/o complete information, and a heterogenous agents version (HANK2). In terms of substance matter, we are particularly concerned with exchange rate dynamics and monetary and fiscal policy. We also discuss recent empirical work in light of theory and basic econometric tools.
Lectures
1. The New Keynesian two-country model: Framework
2. The New Keynesian two-country model: Solution
3. The small-open economy as a limiting case
4. Monetary policy and exchange rate dynamics
5. Fiscal multipliers and the exchange rate regime
6. Cross-country spillovers
7. Dominant currency pricing
8. HANK2
9. Financial frictions
Literature:
There is no textbook which covers the material in the class. References to recent papers will be provided during lectures.
Time & venue:
For course timing and venue please see the course schedule.
Registration:
Students may register anytime prior to the start of the course by e-mail to buba@wiwiss.fu-berlin.de.
Exam:
More information can be found in course syllabus.
PhD students will be asked to fulfill additional requirements, which will be discussed in class.
Gernot Müller
