| Kommentar |
This course is based on a series of lectures regarding the functions of financial markets in society. We will start with some lectures regarding the history of financial markets. Then, we will turn to a non-technical introduction to modern finance theory. Based on a solid understanding of the theory, students will be able to interpret information revealed by financial markets and to recognize common abuses of such information in policy-making. The last part of the course concerns the interaction between finance and politics, i.e. how legislation and regulation directly influence the structure of financial markets and how players in these markets intervene in the political process to create or modify legislative and regulatory outcomes.
Students will participate in economic experiments that are supposed to illustrate the fragility of financial markets. Besides participating in the experiments, students will also learn to prepare experiments, to guide participants who are not economists, and to lead discussions regarding financial markets.
A component of the course is an ungraded assignment (10.000 ZoL) and discussion. |
| Literatur |
Bernanke, B. S: „The Federal Reserve and the Financial Crisis“, Princeton University Press (2013)
Bernstein, P. L.: "Capital Ideas: The Remarkable Origins of Modern Wall Street", Free Press (1992)
Bernstein, P. L: "Capital Ideas Evolving", John Wiley & Sons (2007)
Calomiris, C. W; Haber, S. H.: "Fragile by Design: The Political Origins of Banking Crises and Scarce Credit", Princeton University Press (2014)
Goetzmann, W. N.: „Money changes everything“, Princeton University Press (2016)
Goldsmith, R. W.: „Premodern financial systems: A historical comparative study“, Cambridge University Press (2008)
Kindleberger, C. P.: „Manias, Panics and Crashes: A History of Financial Crisis“, John Wiley & Sons, 3rd Edition (1996)
MacKenzie, D.: "An Engine, Not a Camera: How Financial Models Shape Markets", MIT Press (2006)
Neal, L.: „A Consise History of International Finance“, Cambridge University Press (2015)
Rajan, R. G.; Zingales, Luigi: "Saving Capitalism from the Capitalists", Princeton University Press (2004)
Mian, A.; Sufi, A.: "House of Debt", University of Chicago Press (2014) |
| Prüfung |
Portfolio-Exam: Course participants have to complete two assignments in order to show their learning progress.
1st assignment: learn and understand the valuation safe cash flows (with a focus on sovereign bonds), investment criteria, the instruments used in international finance, the economics of interest rates and exchange rates, basic strategies for profiting from differences between the bond yields in different countries and the implementation of the strategies in terms of algorithms. The students will demonstrate their progress by answering the questions of a multiple-choice exam.
2nd assignment: explore and apply some of the processes that major credit rating agencies use in order to determine the credit ratings of countries. Teams of students will apply a process of this sort in order to prepare presentation materials (“slides” for a talk) suitable for arguing for a down- or up-grade of specific countries (one country per team) while comparing the countries to peer countries.
The final grade will be given for the portfolio of the two assignments.
Registration for the portfolio exam (AGNES): untill 18.12.2024.
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