• EC304 Economics Principles of Economics (or equivalent)
• EC305/EC306 Mathematics Mode A or B
• EC309 Statistics for Economics (or equivalent)
OverviewThe module provides a starting point for understanding financial markets. It attempts to link models of money, banking and finance into one generic, or foundation, view and provides insight into what determines the set of equilibrium prices required to provide an appropriate level of savings in an economy to finance the expected level of expected activity. It considers how financial and economic innovations have evolved over time, and explores why and how it seems to be that when finance fails, so does the modern market economy.
Important considerations within the module include:
• How can we analyse the appearance of money in an economy?
• What is the link between money and finance?
• What explains bank runs?
• Can we explain the occurrence of financial crises?
This module appears in:
This module is an elective for all Single and Joint honours degree programmes in Economics.
This module is not available to students across other degree programmes in the University.
Method of assessment
Essay (1500 words) (20%)
Examination, 2 hours (80%)
Champ, B., S. Freeman, and J. Haslag, (2011). Modelling Monetary Economics, Cambridge University Press: Cambridge.
Allen, F. and D. Gale, (2009). Understanding Financial Crises, Blackwell: Oxford.
Goodhart, C. A. E., (1989). Money Information and Uncertainty, Palgrave Macmillan.
Greenbaum, S. I., A. V. Thakor, A. W. A. Boot. Contemporary Financial Intermediation, 3rd edition, 2015, Elsevier.
By the end of the module, you will be able to:
* demonstrate knowledge and understanding of the appearance of money.
* understand the appearance and role of commercial banks as financial intermediaries.
* analyse the functions of money, commercial banks and the central bank.
* understand the relationship between the central bank and commercial banks.
* apply analytical and mathematical skills to analyse financial issues.
* analyse rate of return differences across different financial assets.