Economic Fluctations and Monetary Policy

Introduction

Please note that this is a preliminary course description. The final version will be published in June 2026.

The course aims to develop students’ ability to understand and apply modern macroeconomics to current issues, both theoretical and empirical. It will cover the empirical characteristics of business cycles, the main techniques used to analyze modern macroeconomic models, and key frameworks—particularly Real Business Cycle (RBC) and New Keynesian models—for studying fluctuations and the role of monetary policy. A special emphasis is placed on time‐series methods— including detrending techniques, identification of shocks, and the study of impulse responses in structural VAR approaches — to equip students with the tools needed for robust empirical analysis of macroeconomic data.

Course content

• Block I: Advanced Business Cycle Theories

Real Business Cycle models (facts and solving models numerically) and the New Keynesian Model (Nominal rigidities and NK Phillips Curve)

• Block II: Monetary Policy
  Taylor rule, different regimes: commitment vs. discretion and monetary policy in practice
• Block III: Empirical Macroeconomics: Time Series Basics and Business Cycles
  Stationarity and non-stationary processes, Detrending methods and Business Cycles, Shocks & Impulse Responses
• Block IV: Empirical Macroeconomics: Multivariate models and macroeconomic shocks Simultaneity & Identification in Macroeconomic models, structural VAR Setup: estimation, impulse responses, and identification schemes, Estimating Monetary Policy Shocks in VARs (and maybe using local projections) + other macroeconomic Shocks (oil prices and productivity)