The course focuses on the working of monetary economies and monetary policies by exploiting some recent developments in analytical models, starting with traditional approaches, to DSGE, to get eventually to models with credit frictions, able to shed some light on the mechanisms of recent crisis.

PART (1): Some Facts and Some Traditional Models.
- Basic facts about money, macroeconomic activity and monetary policy: Walsh, Ch 1
- Observational Equivalence after Sargent: Walsh, Ch.1
- The Lucas’ (New) Classical Model: Romer, Ch 6 (Part A)
- Monopolistic Competition, Nominal & Real Rigidities: Blanchard & Fischer, Ch. 8, Sect. 8.1
- Identifying the impact of money shocks: some hints on VAR analysis: M. Enders, Sects. 5.5-5.8
- Time-Inconsistency as a theory of Inflation: Romer, Ch 10

PART (2): Microfounded dynamic models: Permanent Income Theory; Dynamic Stochastic General Equilibrium Models
- Consumption and Asset Pricing: Romer, Ch 7
- Ricardian Equivalence: Romer, Sects. 11.2-11.3
- The standard New Keynesian DSGE Model: Walsh, Ch 8
- New ways to monetary policy: B. Friedman (2013), NBER wp #18960

PART (3): Some Good Models for Unhappy Times (the role of credit in macroeconomics)
- Problems with borrower-lender relationship. An example: Stiglitz & Weiss’ credit-rationing model: Walsh Ch 10
- Credit, Money and Aggregate Demand: Bernanke & Blinder (1988, AER)
- Credit cycles and aggregate fluctuations: Kiyotaki & Moore (1997, JPE)
- Fisher-Minsky debt-driven slumps: Eggertsson & Krugman (2012, QJE)
- Financial Intermediaries and Monetary Economics: Adrian & Shin (2010), in Handbook of Monetary Economics (Vol.3).