AØKA08221U  Monetary Policy (F)

Volume 2017/2018

MSc programme in Economics – elective course
The course is part of the Financial line at the MSc programme in Economics,   symbolized by ‘F’.



The aim of this macroeconomic course is to offer an understanding of several aspects of money and the macroeconomy, thereby providing insights into how and why monetary phenomena and monetary policy affect important macroeconomic aggregates such as output, consumption, inflation and unemployment. Moreover, focus will be on the characteristics of “good” monetary policymaking in the sense of assessing the advantages and disadvantages of various monetary policy strategies.

To secure a firm foundation for the aspects covered, emphasis will be on rigorously formulated theoretical models. Economic intuition, however, is just as important as mathematical formalism. The curriculum will be mainly theoretical, but the empirical relevance of the material will not be underplayed.

Learning Outcome

The student should have attained learning outcomes in the following three dimensions after having completed the course:


  • The student should understand the theories covered in the course both mathematically and intuitively.


  • The knowledge should be applied independently such that the student can analyze real-life occurencies pertaining to monetary policy issues in later employment in either public or private institutions.


  • Through the acquired knowledge and skills, students will be equipped with abilities that enables them to approach more advanced material within monetary policy and related disciplines.

The curriculum will consist of a large part of Carl. E. Walsh (2010): “Monetary Theory and Policy”. Third Edition, The MIT Press, and a number of articles. The new 2016/17 version of the book may be ready before we start. If it is, we use the new book.

As some of the material requires a thorough understanding of macroeconomic general equilibrium models, it is a prerequisite to master economic theory at a level corresponding to David Romer: Advanced Macroeconomics, McGraw-Hill (4th edition currently used in Macroeconomics III). In particular, the chapter on the Ramsey model should be well known. One should therefore be familiar with basic intertemporal optimization, and analyses of static and dynamic systems with rational expectations.
Most importantly, one should not be afraid of mathematical rigor. At the end of the day, this is what serves to foster conclusions and policy implications that are internally consistent, and not merely based on “common sense” and/or personal judgements and opinions. Mathematics is just a tool, but a very helpful one for structuring your thoughts and discussions. But never forget: Economics is the central matter.
Since registration for courses is now binding, it is important to know what you sign up for. In that respect, you are lucky with this course. Websites from previous versions of the course (with full access to slides, exercises, notes, etc.) are public.
The 2016 version is here:
The pages have links to earlier versions of the course dating back to 2002. So you will be able to see hands on what you sign up for.
Some lectures will be substiuted with a run through of relevant exercises
2 hours lectures 1 to 2 times a week from week 6 to 20 (except holidays).

Timetable and venue:
The schedule for the semester spring 2018 will be available no later than 7th of November 2017
7,5 ECTS
Type of assessment
Written examination, 3 hours under invigilation
at the computers of the University. The exam assignment is given in English and must be answered in English.
Exam registration requirements


Without aids
Marking scale
7-point grading scale
Censorship form
External censorship
if chosen by the Head of Studies.
Exam period

The schedule for the exam 2018 will be available no later than 7th of November 2017


The written exam takes place in the exam venues of the university 

The exact time of the exam will be informed in the Self-Service at KUnet.


For enrolled students more information about examination, rules, exam schedule etc. is available at the intranet for master students (UK) and master students (DK).



The schedule for the reexam 2018 will be available no later than 7th of November 2017


The written exam takes place in the exam venues of the university 

The exact time of the exam will be informed in the Self-Service at KUnet.


If only a few students have registered for the re-exam, the exam might change to an oral exam including the date, time and place for the exam, which will be informed by the Examination Office.


For enrolled students more information about reexamination, rules, schedule etc. is available at the intranet for master students (UK) and master students (DK).

Criteria for exam assesment

Students are assessed on the extent to which they master the learning outcome for the course.

In order to pass the exam with the top grade 12, the student must make an excellent performance displaying a high level of command of all aspects outlined in the learning outcome, with no or only few minor weaknesses.

In order to merely pass the exam (the grade 02), the student must meet the requirements, as laid out in the learning outcome, to a minimally acceptable degree.

  • Category
  • Hours
  • Lectures
  • 42
  • Preparation
  • 161
  • Exam
  • 3
  • Total
  • 206