Monetary Policy (F)

Course content

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.


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

The course is an admission requirement for the 5+3 PhD Programme in Economics.


The PhD Programme in Economics at the Department of Economics - elective course with resarch module (PhD students must contact the study administration and the lecturer in order to write the research assignment)


Learning outcome

After completing the course, the student should be able to:


  • Understand the theories and applications 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.


Some lectures will be substiuted with a run through of relevant exercises

The curriculum will consist of a large part of Carl. E. Walsh (2017): “Monetary Theory and Policy”. Fourth Edition, The MIT Press, and a number of articles.

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 (equivalent to material 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 2017 version of the course is here:
The page has 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.

2 hours lectures 1 to 2 times a week from week 6 to 19 (except holidays).

The overall schema for the Master can be seen at

Timetable and venue:
To see the time and location of lecturesplease press the link/links under "Se skema" (See schedule) at the right side of this page (E means Autumn, F means Spring).

You can find the similar information partly in English at
-Select Department: “2200-Økonomisk Institut” (and wait for respond)
-Select Module:: “2200-F18; [Name of course]”
-Select Report Type: “List – Weekdays”
-Select Period: “Forår/Spring – Week 5-30”
Press: “ View Timetable”

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.
Without aids
Marking scale
7-point grading scale
Censorship form
No external censorship
The course can be selected for external assessment.
Criteria for exam assessment

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

To receive the top grade, the student must with no or only a few minor weaknesses be able to demonstrate an excellent performance displaying a high level of command of all aspects of the relevant material and can make use of the knowledge, skills and competencies listed in the learning outcomes.

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

Single subject courses (day)

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