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Outline of the course
GRA 1330/GRA 6604
Applied macroeconomics – monetary policy
Autumn 2001
Thursday 1300-1545
BI Sandvika
Auditorium 2
Practical information
Jan F. Qvigstad will normally be at Handelshøyskolen BI on Thursdays. The rest of the week
he will be in Norges Bank and can be contacted at mailto:[email protected]. Jan
F. Qvigstad’s home page is http://finance.bi.no/~qvigstad/.
Jan F. Qvigstad is responsible for the course. Guest lecturers are invited. Jan F. Qvigstad will
be present at all lectures except 4 October and 15 November.
In order to register as a course participant and to receive course material, the students should
e-mail mailto:[email protected]. After each lecture I shall e-mail you the course
material.
Each lecture consists of three parts:
 Lecture based on the compulsory syllabus and on the advised reading.
 Case studies (see hand out)
 Market analysis. (see hand out)
Active participation in the course is a prerequisite. It is compulsory to take part in the group
presentations of
 the case studies
 or the market analysis.
Syllabus
Compulsory:
 Burda & Wyplosz. Macroeconomics. Second Edition. Oxford University Press. 1997.
[B&W]. Part of this book (chapters 1-13, except 5 and 7) has already been the syllabus for
SIV 3201. It is advised to reread these chapters. For this course in Applied
Macroeconomics chapters 18-19 are added.
 The lectures.
Advised reading:
 Papers on Applied Macroeconomics. Jan Fredrik Qvigstad. September 2001. [PAM]
Lecture 1. Introduction.
20 September
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Jan Fredrik Qvigstad
 Practical information
 Motivation for the course
 Example of a case study: What will happen if we increase the spending of the oil money
 Example of market analysis (what happened last week; what is like to happen next week;
examples from First, DnB, Gjensidig Nor etc.)
Lecture 2. Inflation targeting. Theory
27 September
Guest lecturer Øistein Røisland
 Lecture on Inflation targeting.
Advised reading:
1. Apel, M., M. Nessén, U. Söderström and A. Vredin, ”Different ways of conducting
inflation targeting - theory and practice”, Quarterly Review 1999:4, Riksbanken
(PAM)
2. Mishkin, F. “International Experiences with Different Monetary Policy Regimes”.
WP 6965, NBER Working Paper Series (PAM)
 Group presentation: Market analysis
 Group presentation: Case study
Lecture 3. Inflation targeting in Norway
4 October
Guest lecturer Jon Nicolaisen

Lecture on inflation targeting in Norway


Advised reading:
1. Gjedrem, S. “Inflation target - how interest rates are set”, Aftenposten, 29 May
2001. (PAM)
2. Gjedrem, S. ”The krone and the interest rate”, Dagens Næringsliv, 6 July 2001.
(PAM)
3. Gjedrem, S. ”Monetary policy, forecasts and market communication”, 07 June
2001, The Norwegian School of Management’s Centre for Monetary Economics
(PAM)
Group presentation: Market analysis
Group presentation: Case study
Lecture 4. Monetary Policy in Euroland
11 October
Guest lecturer Anne Berit Christiansen
 Lecture on monetary policy in Euroland
Advised reading:
1. “The stability-oriented monetary policy strategy of the Eurosystem”. ECB Monthly
Bulletin. January 1999. Pp39-50. (PAM)
2. Alesina, Blanchard, Gali, Giavazzi and Uhlig: “Defining a macroeconomic
framework for the Euro area”, monitoring the European Central Bank, CEPR ,
executive summary, chapter 3, 4 and 5. (PAM)
3. Duisenberg: “What exactly is the responsibility of central banks of large economic
areas in the current slowdown of the world economy?”, http://www.ecb.int (PAM)
 Group presentation: Market analysis
 Group presentation: Case study
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Lecture 5. Monetary policy in USA
18 October
Guest lecturer Kåre Haglund
 Lecture on monetary policy in USA
Advised reading:
1. The Federal Reserve System – Purposes and Functions.
Chapter 1: Overview of the Federal Reserve System, page 1-3 (to Structure of the
System), chapter 2: Monetary Policy and the Economy. See:
http://www.federalreserve.gov/pf/pdf/frspurp.pdf (PAM)
2. Testimony of Chairman Alan Greenspan. Federal Reserve Board’s semiannual
monetary policy report to the Congress. July 18, 2000. See:
http://www.federalreserve.gov/boarddocs/hh/2001/july/testimony.htm (PAM)
 Group presentation: Market analysis
 Group presentation: Case study
Lecture 6. Macroeconomics
25 October
Jan Fredrik Qvigstad
 Lecture on the IS-LM model and uncovered and covered interest parity
Compulsory syllabus:
1. B&W Chapters 10 and 11
2. B&W Chapter 19.2
 Group presentation: Market analysis
 Group presentation: Case study
Lecture 7. The Data
1 November
Guest lecturer Kjetil Olsen
 Lecture on National Accounts, short term indicators, core inflation
Compulsory syllabus:
1. B&W: Chapters 1 and 2
Advised reading:
2. Familiarise yourself with the following homepages: www.finans.dep.no,
www.norges-bank.no, www.ssb.no
 Group presentation: Market analysis
 Group presentation: Case study
Lecture 8. Inflation forecasts
8 November
Guest lecturer Amund Holmsen
 Lecture on inflation forecasting in Norway
Advised reading:
1. Norges Bank Inflation report, see www.norges-bank.no
2. Qvigstad, J. “Monetary Policy in Real Time”, Working paper ANO 2001/1,
Norges Bank (PAM)
3. Olsen, K. and F. Wulfsberg, “The role of assessments and judgement in the
macroeconomic model RIMINI", Economic Bulletin 2/2001, Norges Bank (PAM)
4. Jore, A. S., “Evaluation of Norges Bank’s projections for 1999”, Economic
Bulletin 1/2001, Norges Bank (PAM)
 Group presentation: Market analysis
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
Group presentation: Case study
Lecture 9. Price stability and financial stability
15 November. The lecture will be given in Norges Bank (The Press Centre) and not in
auditorium 2 at BI/Sandvika1
Guest lecturer Arild Lund
 Lecture on the interaction between price stability and financial stability
Advised reading:
1. Schwartz, A. J. “Why financial stability depends on price stability” (PAM)
2. Crockett, A. “Why is financial stability a goal of public policy”, Federal reserve
Bank of Kansas City (PAM)
3. Norges Bank Report on Financial Stability, see www.norges-bank.no
 Group presentation: Market analysis
 Group presentation: Case study
 1415-1445 hrs. Director Knut Kjær: Presentation of the investment strategy of the
Government’s Petroleum Fund
Lecture 10 Preparation for exam
22 November
Jan Fredrik Qvigstad
 Lecture on
 Highlights of the previous lectures
 Exam 1999 and exam 2000 (See PAM)
 Some good advice
 Group presentation: Market analysis
 Group presentation: Case study
Main entrance
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Students should enter Norges Bank via the main entrance from Bankplassen (see map at the end of this note).
Meet in the main reception hall at 1245 hrs. Security requires a name list. I shall use the list of registered
students for the course (the ”e-mail list”). The students that cannot meet should e-mail me a note two days in
advance (Tuesday 13 November).
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