Deutsch Intern
    Chair for Monetary Policy and International Economics

    Monetary Policy in a Closed Economy

    (Monetary Policy & Financial System)

    The course was held for the last time by Prof. Bofinger in WS 2019/20.


    5 ECTS


    The course will address the following topics:

    1. Overview of the financial crisis
    2. The real economic (classical) theory of the financial system for a "real exchange economy", "loanable funds" model
    3. The Diamond and Dybvig model to explain bank runs
    4. Monetary (Keynesian) theory of the financial system for a monetary economy, IS/LM model in the context of a monetary economy
    5. Price theory model of the banking system
    6. Mixed forms of real and monetary analysis
    7. Economic policy implications of real and monetary analysis: secular stagnation, saving(s) glut, German current account surplus, crowding out, full money theory, euro crisis, paradox of capital, Feldstein-Horioka
    8. Modern monetary theory (MMT)
    9. Digitalization of money: cryptocurrencies, stablecoins (Libra), central bank credit for all (Central Bank Digital Currencies, CBDC)
    10. Target balances
    11. IS/PC/MP model: interdependence of monetary and fiscal policy, theory of deflation.


    Course material

    All course materials are available at WueCampus.


    Prof. Dr. Peter Bofinger (peter.bofinger@uni-wuerzburg.de)
    Thomas Haas (thomas.haas1@uni-wuerzburg.de)