FDPE Macroeconomics 4: Monetary policy and business cycles, ECOM-R319
This is the website of the fourth module of FDPE
macroeconomics sequence and part of the Research Master's course block.
Hence, this contains information of the part
lectures that are given by Antti Ripatti. The course has the formal
website. The module 4 syllabus
(subject to changes).
NewsRegister in Moodle too.
LecturesSee the course web by UH
Exam: Mon 7.5.2018, 10-14, Economicum, sh.3 - 4,
Retake exam: Wed 6.6.2018, 10-14, Economicum, sh.3 - 4
Lecture notesTry to get the SECOND EDITION Galí's
book. It is more complete than my
slides. I am gradually moving from the first edition to the second
edition. It is better to buy the second edition such that you have most
of the material of the book available.
I will rely on the following lecture notes. I will update these
frequently and place the version date on the first page of the slides. Please, check for the latest
version even at the day of a lecture.
Most probably there will be changes even just prior to the lecture. The
lecture notes are released as a single package:
- Slides: Difference equations and
solution methods will be handled only briefly during the lectures
Problem sets are stored in Moodle.
Exercise classes are given by Ville Pikkarainen. Rules as before: leave
the answer sheets to TA at the start of the exercise class. In the case
you cannot participate, you may leave them by email to ville dot
pikkarainen at helsinki dot fi
may encounter many practical problems in doing the exercises
(computation in particular). It is, however, necessary that you will
try hard. See the computing hints below!
- Wed 28.3.2018 10:15 - 11:45 Economicum, sh.3 - 4, Arkadiankatu 7
- Wed 11.4.2018 10:15 - 11:45 Economicum, sh.3 - 4, Arkadiankatu 7
- Wed 18.4.2018 10:15 - 11:45 Economicum, sh.3 - 4, Arkadiankatu 7
Do not even dream copying last year's exercises. You will get new ones.
Computing hints (some of the links are old)
A list of
log-linearisation rules. These will help you in
log-linearisation. Note, that the notation differs from Gali.
Many of the exercises contains computational exercises. Hence you need
a computer, dynare and Matlab or Octave (Octave is free). To install Octave follow the Dynare instructions
to install Octave and Dynare website to
install Dynare. I have tested Windows, Mac OS X and Ubuntu
(check the dynare wiki and forum for Ubuntu instructions)
Octave/Dynare and both of them do the job. Ubuntu Octave is more
BTW, the usage of Octave could be more user-friendly with a front-end!
In exercises, I will ask you to
log-linearise some equations. For computational purposes with dynare
this is not necessary. Note, however, that the model has to be
in stationary form in dynare, so get rid of the price level
the model in terms of inflation and real variables, eg real money
balances $m_t-p_t$). Dynare will then linearize the system
automatically (command stoch_simul(order=1,irf=20);)
and analytically. (This is different than log-linearisation,
results may deviate from log-linear version.) This helps you
idea in the Dynare is that you need to code the decision rules, the
budget constraints, and the equilibrium conditions. Then dynare use
this information to form the state-space representation of the
After this, it solves the model and computes policy functions (ie the
system of solved equation) and standard descriptive statistics
model. All of this means that provides you the solution of the
Oops, you need an editor to edit your model file. If you do not have
your favourite editor, type edit filename.mod
in Octave or Matlab.