This course follows Macroeconomics II and it goes deeper in the description of micro-founded models by introducing market frictions into the RBC model. The DSGE-New Keynesian model which includes nominal rigidity is a natural extension of the RBC model to analyse monetary policy / fiscal policy. Although this course is mainly theoretical, lectures will be motivated by stylized facts and the empirical performance of business cycle models will be discussed.
Course outline :
Chapter 1 : Nominal rigidities (1) Introducing money in RBC model (2) Monopolistic competition (3) Price rigidity (4) Exercises
Chapter 2 : Monetary and Fiscal policy (1) Monetary policy analysis (2) Fiscal policy analysis (3) New topics in macroeconomics (ZLB, forward guidance…)