Business cycle fluctuations and monetary policy

The unit develops and examines the theoretical and empirical relationship between monetary policy, real activity, and the financial markets. A rigorous theoretical framework will be developed to analyse conventional and unconventional monetary policy, and their effects on the real economy. The analysis of the conduct of monetary policy will be developed in the context of a New Keynesian economic model. Recent examples and challenges of monetary policy conduct will be discussed with the help of the theoretical tools developed in the unit. The response of monetary policy in recent deep recessions, like the 2007-2009 great recession and the recession that followed the Covid-19 outbreak, will be examined.