Monetary Economics

This course is designed to provide an overview of the literature on monetary aspects of the business cycle, with a special emphasis on optimizing sticky price models and their implications for monetary policy. We will cover both the main theoretical models and relevant empirical evidence.

Preliminary Readings

  • G.Mankiw – The Macroeconomist as a Scientist and Engineer 
  • O. Blanchard – The State of Macro
  • V. Chari and P. Kehoe – Modern Macroeconomics in Practice : How Theory is Shaping Policy


  • W.Carlin and Soskice – Macroeconomics: Institutions, Instability, and the Financial System
  • C.Walsh – Monetary Theory and Policy , 3rd edition
  • A. Belke and T. Bolleit – Monetary Economics in Globalised Financial Markets
  • B.Friedman and M. Woodford (Ed.) – Handbook of Monetary Economics, 3A -3B
  • B. Snowdon and H.Rane – Modern Macroeconomics: Its Origins, Development and the Current State
  • Jean Pisani-Ferry et. al – Economic Policy
  • Mishkin, F. – The Money, Banking and Financial Markets


Lecture Notes for Intro

Lecture Notes for DAD_DAS

Theoritical Backround

  • Mishkin, F. – The Money, Banking and Financial Markets

               Chapter 21,22,23,24,25,26

  • Mankiw, G. – Macroeoconomics

                     Chapter 15: A Dynamic Model of Economic Fluctuations

  • Jean Pisani-Ferry et. al – Economic Policy

              Chapter 4 : Monetary Policy

Discussion paper

  • Clarida,Gali and Gertler – The Science of Monetary Policy : A New Keynesian Perspective, Journal of Economic Literature

Modern Monetary Framework : The 3 Equation Model

IS-PC-MR Curves

  • Carlin and Soskice – Macroeconomics: Institutions, Instability, and the Financial System – Chapters 1,2,3,4.13
  • Carlin and Soskice – The 3 Equation New Keynesian Model : A Graphical Exposition
  • Romer, David – Keynesian Macroeconomics without LM Curve , Journal of Economic Perspectives
  • King, Robert – The New IS-LM Model : Language, Logic and Limits , FRB of Richmond Economic Quarterly
  • Gali and Gertler – Macroeconomic Modelling for Monetary Policy Evaluation, Journal of Economic Perspectives

Inflation Targeting

  • G. Hammond – State of the Art Inflation Targeting
  • L. Svensson – Monetary Policy Strategies for FED
  • L. Svensson – Inflation Targeting and “Leaning against the Wind”

Inflation Dynamics

  • Syed K. Abbas, Prasad Sankar Bhattacharya, Pasquale Sgro – The New Keynesian Phillips curve: An update on recent empirical advances, International Review of Economics & Finance
  • A.H. Kara, F. Öğünç and C. Sarıkaya – Inflation Dynamics in Turkey
  • Fethi Öğünç, Mustafa Utku Özmen, Çağrı Sarıkaya- Inflation Dynamics in Turkey from a Bayesian Perspective
  • M. Ayhan Kose, Hideaki Matsuoka, Ugo Panizza, and Dana Vorisek – Inflation Expectations: Review and Evidence
  • Berk Bilici and Semih Emre Çekin – Inflation Persistence in Turkey: A TVP-estimation approach, The Quarterly Review of Economics and Finance, Volume 78, 2020.

Exchange Rate Pass-Through

  • Ha, Stocker and Yilmazkuday – Inflation and Exchange Rate Pass-Through
  • Antonia López-Villavicencio, Valérie Mignon – Exchange rate pass-through in emerging countries: Do the inflation environment, monetary policy regime and central bank behavior matter?, Journal of International Money and Finance,
  • Marc Pourroy – Does exchange rate control improve inflation targeting in emerging economies?, Economics Letters,
  • Martina Jašová, Richhild Moessner and Előd Takáts – Exchange rate pass-through: What has changed since the crisis?

The Monetary Transmission Mechanism

  • F. Mishkin – Symposium on the Monetary Transmission Mechanism
  • K. N. Kuttner and P. C. Mosser – The Monetary Transmission Mechanism: Some Answers and Further Questions
  • F.S. Mishkin – The Channels of Monetary Transmission: Lessons for Monetary Policy
  • F.S. Mishkin – Housing and the Monetary Transmission Mechanism