International monetary policy

This seminar focuses on recent advances in monetary theory and monetary policy. The aim of the course is that students understand how a central bank operates and that they can participate in public debates on monetary policy issues.

The first part of the seminar deals with the basic concept of monetary policy. In two introductory lectures an overview will be given about the ECB's monetary policy strategy and monetary policy implementation. The second part of the seminar consists of ten core sessions. Each core session will focus more intensively on individual aspects of monetary theory and policy. We will elaborate the nexus between money growth and inflation, the need for central bank transparency and independence and the idea of optimal monetary policy rules. With view on the current financial crisis we join into the discussion, whether central banks should react to asset prices in their conduct of monetary policy and whether maintaining price stability is compatible with financial stability. The impact of monetary policy on income and wealth distribution is discussed, and finally, we will deal with the role of monetary policy before, during and after financial crises. We will elaborate on the central bank's role of lender of last resort and unconventional monetary policy instruments.

Each core session will start with a brief lecture, in which we will review the main findings of the previous session and introduce the current topic of the respective week. After discussing open questions, the second part of the session will be devoted to two specific research questions related to the current topic of the respective week. Students will prepare a presentation on the research questions and the main conclusions will be discussed in class.