Advanced Monetary Theory and Policy: New Keynesian Economics, DSGE Models, and Central Banking

Sid Ahmed Zenagui

MPRA Paper from University Library of Munich, Germany

Abstract: Advanced Monetary Theory and Policy: New Keynesian Economics, DSGE Models, and Central Banking provides a graduate-level treatment of modern monetary economics, integrating theoretical rigor, quantitative methods, and contemporary policy applications. The textbook develops the foundations of monetary theory, including money demand, intertemporal optimization, money-in-utility models, cash-in-advance frameworks, search-theoretic monetary models, and overlapping generations models. It systematically advances toward New Keynesian economics and Dynamic Stochastic General Equilibrium (DSGE) modelling, covering price and wage rigidities, inflation dynamics, Bayesian estimation, and open-economy extensions. The volume further examines monetary policy design, inflation targeting, optimal policy under commitment and discretion, central bank credibility, forward guidance, and macroprudential considerations. Emerging research frontiers—including heterogeneous-agent models, climate-related monetary risks, central bank digital currencies, artificial intelligence in central banking, geopolitical shocks, and nonlinear DSGE methods—are incorporated to reflect developments through 2026. Emphasis is placed on mathematical derivation, empirical evidence, computational implementation using Dynare, MATLAB, Python, Julia, and R, and research-oriented exercises suitable for graduate students, researchers, and policy practitioners. The textbook aims to bridge advanced monetary theory with practical policy analysis in both advanced and emerging economies.

Keywords: Monetary Economics; Monetary Policy; New Keynesian Economics; DSGE Models; Central Banking; Inflation Targeting; Bayesian Estimation; Dynamic General Equilibrium; Macroeconomic Modelling; Forward Guidance; Financial Stability; Heterogeneous-Agent Models (HANK); Central Bank Digital Currencies (CBDCs); Artificial Intelligence in Economics; Open-Economy Macroeconomics; Macroeconomic Policy. (search for similar items in EconPapers)
JEL-codes: C11 C51 C68 E31 E32 E37 E41 E42 E43 E47 E52 E58 E61 F41 G28 (search for similar items in EconPapers)
Date: 2026-05-22
References: Add references at CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/129218/1/MPRA_paper_129218.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:129218

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().