Dr Kevin Sheedy

Dr Ambrogio Cesa-Bianchi

This course is available on the MSc in Econometrics and Mathematical Economics, MSc in Economics and MSc in Economics (2 Year Programme). This course is available with permission as an outside option to students on other programmes where regulations permit.

Students must have completed Introductory Course in Mathematics and Statistics (EC400).

In exceptional circumstances, students may take this course without EC400 provided they meet the necessary requirements and have received approval from the course conveners (via a face to face meeting), the MSc Economics Programme Director and their own Programme Director. Contact the Department of Economics for more information (econ.msc@lse.ac.uk) regarding entry to this course.

The course aims to develop the student's ability to undertake research in macroeconomics by studying a number of current issues both theoretical and applied.

In MT, we begin by studying money’s role as a medium of exchange and the determination of the price level using money-in-the-utility-function and cash-in-advance models. We then look more carefully at the reasons for holding money by applying search theory. We also study money’s role as a unit of account and the consequences of nominal rigidities such as sticky prices. We analyse the costs of inflation and optimal monetary policy, and we also look at unconventional monetary policies when a central bank is constrained by the interest-rate lower bound. Finally, we study firms’ price-setting behaviour in more detail and its implications for the size of the real effects of monetary policy.

In LT, we discuss the causes and consequences of business cycles and how government policies can affect them. Specifically, we study in the different tools that central banks have to their disposal these days to control inflation, financial stability, and economic activity.

20 hours of lectures and 10 hours of seminars in the MT. 20 hours of lectures and 9 hours of seminars in the LT. 1 hour of seminars in the ST.

There will be a reading week in Week 6 of LT only (no lectures or classes that week).

This course is delivered through a combination of classes and lectures totalling a minimum of 60 hours across Michaelmas Term, Lent Term and Summer Term. 

Two marked assignments per term.

A reading list will be handed out by the lecturers at the beginning of their sessions.

Exam (50%, duration: 2 hours, reading time: 15 minutes) in the summer exam period.
Essay (50%, 6000 words) in the ST.