Monetary Theory and Policy, Third ed., MIT Press, 2010: Now available

by Carl E. Walsh

Table of contents.

The MIT Press site has links for ordering an examination copy or for requesting the solutions manual. Or find it on Amazon.com.
Quick Links to:><a href = | Matlab programs| Solutions manual| Additional notes| Typos| Material cut from Second edition

Contact information:
Department of Economics
University of California, Santa Cruz
Santa Cruz, CA 95064.
Phone: (831) 459-4082
Home page: http://people.ucsc.edu/~walshc/
email: walshc@ucsc.edu

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Monetary Theory and Policy, 3nd. ed., The MIT Press, 2010, 632 pages.
The third edition of this graduate level text on monetary theory and policy is now available. This book presents an advanced treatment of the major topics of monetary economics. It is designed for use in a graduate course in monetary economics, but it can also be used in graduate macro courses and the chapters on monetary policy topics should be accessible to advanced undergraduates.
The third edition incorporates new or expanding material on money in search equilibria, sticky information, adaptive learning, state-contingent pricing models, and channel systems of implementing monetary policy, among other topics. In addition, much of the material on models for policy analysis has been reorganized to reflect the dominance of the new Keynesian approach. In addition, material on models of nominal rigidities is now incorporated into a single chapter and there is now a stand alone chapter on the new Keynesian model.

Solutions to the exercises:

Solutions to the problems in the third edition book are available to instructors. The MIT Press site has links for ordering an examination copy or for requesting the solutions manual. Or find it on Amazon.com.

Matlab programs

Chapters 2 and 3: To solve the models of chapters 2 and 3, you will need one of the following:
1. basicsol.m which uses a Shur decomposition and is based on the programs of Paul Soderlind (1999). His complete set of programs for solving linear rateional expectations model, and which are used to optain optimal policy in chapter 8, are available on his web site
2. The toolkit of Harald Uhlig (1999),
3. lrp.m which uses a linear regulator approach adopted from Gerali and Lippi (2003), or
4. Dynare, which is available from the Dynare home page.

Chapter 8: To run the programs used in chapter 8 for the new Keynesian model, you will need Paul Soderlind's programs, available on his web site

A zip file containing all the programs used in the 3rd edition is available here

Indiviual programs can be found below -- you will need to copy the text into your own file.

The MIU and CIA models:
To solve the MIU model using basicsol.m or lrp.m, use miu_3e.m.
To solve the MIU model using Uhlig's methods, use miu_uhlig_3e.m.
To solve the MIU model using dynare, use miu_dynare_3e.mod.
To solve the CIA model using basicsol.m or lrp.m, use cia_3e.m. Updated March 4, 2010
To solve the CIA model using Uhlig's methods, use cia_uhlig_3e.m. Updated March 4, 2010
To solve the CIA model using dynare, use cia_dynare_3e.mod. Updated March 4, 2010

Sticky information:
The basic sticky information model used to generate figures 5.1 and 5.2.

The new Keynesian model:
The basic new Keynesian model used to generate figures 8.2 and 8.3.
A program to plot eigenvalues for the basic new Keynesian model that is useful for Problem 8.2.
A program to solve and obtain impulse responses for simple models with instrument rules and useful for Problem 8.19.

Additional material:

Additional notes on the linear approximation to the MIU model of chapter 2.
Additional notes on the linear approximation to the CIA model of chapter 3.
Typos:
List of typos as of Nov. 2011.

Material cut from the second editon:

Do Central Bank Institutions Matter?, section 8.5 from the second edition.
The reserve market, section 9.4 from the second edition.
Carl E. Walsh / UCSC / walshc@ucsc.edu