Monetary and Macro-Prudential Policy, Ph.D.

Prof. Ester Faia

Chair in Monetary and Fiscal Policy,
Goethe University Frankfurt
Fall semester 2014
The exam will consist in a term paper which shall be handed prior to the beginning of the
summer-semester.
1. The macro model with credit frictions in closed and open economy.
References:
1. Bernanke, Ben S., Gertler, Mark and Gilchrist, Simon, (1999). "The Financial
Accelerator in a Quantitative Business Cycle Framework," Handbook of
Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics,
edition 1, volume 1, chapter 21, pages 1341-1393 Elsevier.
2. Faia, Ester. (2007) "Finance and International Business Cycles". Journal of Monetary
Economics, Volume 54:4.
2. Collateral and margin constraints.
References:
1. Aiyagari, S. Rao and Gertler, Mark, 1991. "Asset returns with transactions costs and
uninsured individual risk," Journal of Monetary Economics, Elsevier, vol. 27(3), pages
311-331, June.
2.Kiyotaki, Nobuhiro and Moore, John, 1997. "Credit Cycles." Journal of Political
Economy, University of Chicago Press, vol. 105(2), pages 211-48, April.
3. Banks runs in macro models.
References:
2. Angeloni, I. and E. Faia, Capital Regulation and Monetary Policy with Fragile
Banks. Journal of Monetary Economics, April 2013.
4. Macro-prudential policies
References:
1. Osiski, J., Seal, K. and Hoogduin, L. (2013), Macro-prudential and Micro-prudential
Policies: Toward Cohabitation, IMF.

2. Saurina, J. (2009). Dynamic provisioning: The case of Spain. The World Bank. Note
Number 7, July.
3. Faia, E. and I. Schnabel, 2014, The Road from Micro to Macro-prudential policies.
5. Labour market frictions in macro models: search and matching, efficiency wages,
unions.
References:
1. Krause, Michael U. and Lubik, Thomas A., (2007). "The (ir)relevance of real wage
rigidity in the New Keynesian model with search frictions." Journal of Monetary
Economics, vol. 54(3), pages 706-727, April.
2. Faia, Ester, (2008) "Optimal Monetary Policy Rules with Labour Market Frictions".
Journal of Economic Dynamic and Control.
3. Faia, Ester, (2009) "Ramsey Monetary Policy with Labour Market Frictions". Journal
of Monetary Economics.
6. Heterogenous firms and market structures in macro models.
References:
1.Rotemberg, Julio J & Woodford, Michael, 1992. "Oligopolistic Pricing and the Effects
of Aggregate Demand on Economic Activity." Journal of Political Economy, vol. 100(6),
pages 1153-1207, December.
2. Faia, E., 2012. "Oligopolistic Competition and Optimal Monetary Policy". Journal of
Economic Dynamics and Control, Volume 36, Issue 11, November 2012, Pages 17601774.
7. Optimal monetary policy in a new open economy model.

References:
1.Jordi Gal and Tommaso Monacelli, (2005). "Monetary Policy and Exchange Rate
Volatility in a Small Open Economy." Review of Economic Studies, vol. 72(3), pages
707-734, 07.