FDPE Macroeconomic Theory: Part II, spring 2012 — Section 2:
Monetary
Theory
(If you are looking for Trondheim macro, please follow this link, http://teaching.ripatti.net/trond/)
This is the website of the section 2 of the part II of the FDPE
course on
Macroeconomics. Hence, this contains information of the part
of the
lectures that are given by Antti Ripatti. The course has the formal
website,
where you may find information regarding the Part
I
(lectured by Niku Määttänen) and the first section of Part
II
(lectured by Markus Haavio). The part II syllabus.
Note
also the instructions how to prepare for the course!
Course forum (macro.freeforums.org)
I created a discussion
forum.
Ideally, this would complement lectures and exercises by giving an
opportunity to discuss vague issues. If you ask me something by email,
I will try to reply here too. This is my first time in administering a
forum. Hence, please be patient. I will try to do my best to keep the
forum restricted to the students of the course. However, this is a free
forum site and my effors might be restricted by the features of the
site. I think the forum does not have a formal role. So, in principle,
you may ignore it.
Lecture notes
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 in the previous day of a lecture.
Most probably there will be changes even in the previous night. The
lecture notes are released as a single package:
Exercises
Try to get the Galí's book. It is more complete than my
slides. You
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! (Updated Jan 30 2012)
- problem set.
This is a bit larger
problem set than the forthcoming ones. This also contains easier stuff
to warm-up. I will reply possible questions at the discussion forum.
- problem set.
You will probably need these tools
that I
showed in the whiteboard.
- problem set.
These two exercises will give around 5 points.
Computing hints
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 both Windows and Ubuntu
(check the dynare wiki and forum for Ubuntu instructions)
versions of
Octave/Dynare and both of them do the job. Ubuntu Octave is more
user-friendly. I will give limited support in the technical issues
regarding the installation. Contact my email.
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
(ie write
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,
so your
results may deviate from log-linear version.) This helps you
to get
some results.
The
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
model.
After this, it solves the model and computes policy functions (ie the
system of solved equation) and standard descriptive statistics
of the
model. All of this means that provides you the solution of the
linearised model.
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 (replace the filename.mod by
the name you want; but use the .mod
extension.).