This course aims at providing students with a thorough understanding of the key issues related to fiscal and monetary policy and the analytical tools necessary to study relevant policy questions. The course intends to explore both theoretical debates and the practical issues facing policy makers, the role of the underlying policies in achieving economic stability and growth, the interactions between the two policies in a closed and an open economy, and the constraints that these interactions impose on the effectiveness of any of the policies. This course is divided into two parts, with the first focusing on questions pertaining to fiscal policy and the latter on topics related to monetary policy.

After completing this course, the student will be able to:

1. Explain fiscal and monetary policies, objectives and instruments and their role in economic growth, stability and poverty reduction.
2. Compare the fiscal and monetary policy debates in the classical, Keynesian, monetarist, new classical and new Keynesian frameworks.
3. Apply the macroeconomic theories
4. Analyze the impact of fiscal and monetary policies.
5. Evaluate the empirical research on the effectiveness of fiscal and monetary policies

1. Fiscal policy: classical and Keynesian views
2. New classical view of fiscal policy
3. Source of government finance
4. Taxes, their types, effects and incidence
5. Public debt and government deficit
6. Fiscal policy multipliers
7. An introduction to money and monetary policy
8. Targets and instruments of monetary policy
9. Money in the classical model
10. Money in the Keynesian model
11. Money in the monetarist model
12. Money in the classical and new Keynesian model
13. Fiscal and monetary policy debate
14. Money in the open economy
15. Inflation

• Hyman, D.N. (2011), Public Finance: A Contemporary Application of Theory to Policy, 10^th Edition, South-Western Cengage Learning.
• Walsh, C.E. (2010), Monetary Theory and Policy, 3^rd Edition, Boston, USA: Massachusetts Institute of Technology.
• Gali, G. (2008), Monetary Policy, Inflation and the Business Cycles, New York, USA: Princeton University Press.

Handa, J. (2009 ), Monetary Economics, 2^nd Edition,Osfordshirre, UK: Routledge.