| Title | Description |
|---|---|
| Chapter 14: The Optimal Path of Government Debt | The government budget constraint, Barro-Ricardo equivalence, and the Ramsey tax problem. |
| Chapter 17: Financial Intermediation | Banking basics, a model with costly audits, a model with private labor effort (moral hazard), and the Diamond and Dybvig model of bank runs. |
| Chapter 18: Fiscal and Monetary Policy | The interaction of fiscal and monetary policy, including discussion of whether or not government budget deficits are inflationary, and the Sargent paper on the ends of four big inflationary episodes. |
| Chapter 19: Optimal Monetary Policy | Review of the Lucas islands model, discussion of the Phillips curve, the problem of credible commitment (the Nash problem), and the Friedman rule. |