Monetary Theory & Policy

ECON 40364 covers the development of monetary theory and policy with a particular focus on financial crises and the appropriate central bank response. Other topics include the welfare cost of inflation, countercyclical monetary policy, and central bank independence.

The most recent (Spring 2022) course materials are available below:

Syllabus: pdf


  • Introduction: pdf
  • Money supply: pdf
  • Money demand and price level determination: pdf
  • Monetary policy implementation: pdf
  • Monetary policy and macro fluctuations: pdf
  • Central bank potpourri: pdf
  • Bonds and the term structure of interest rates: pdf
  • Stock prices and bubbles: pdf
  • Financial structure, adverse selection, and moral hazard: pdf
  • Banks and bank runs: pdf
  • Financial crises: pdf
  • Macro analysis of financial crises and unconventional monetary policy: pdf

Problem Sets:

  • Problem Set 1: pdf
  • Problem Set 2: pdf
  • Problem Set 3: pdf
  • Problem Set 4: pdf
  • Problem Set 5: pdf