ECON 532 | Course Introduction and Application Information

Course Name
Macroeconomics for Investment
Code
Semester
Theory
(hour/week)
Application/Lab
(hour/week)
Local Credits
ECTS
ECON 532
Fall/Spring
3
0
3
5

Prerequisites
None
Course Language
English
Course Type
Elective
Course Level
Second Cycle
Course Coordinator -
Course Lecturer(s) -
Assistant(s) -
Course Objectives To teach the students basic linkages between the macro economy and financial markets.
Course Description The students who succeeded in this course;
  • will be able to analyze macro data during different phases of economic cycle.
  • will be able to explain economic, business and market cycles.
  • will be able to order the main players in the international financial markets.
  • will be able to explain the place of asset class and drivers of each of these over cycles.
  • will be able to interpret the country risk and its impact on asset market returns.
  • will be able to analyze the financial market returns under low growth environment that the world is entering.
  • will be able to explain the basic new developments in financial markets.
Course Content The course aims to provide a macroeconomic framework to aid understanding of the movement of financial markets. It aims to do so both by using traditional macroeconomic equations, but also by developing macroeconomic proxies and signals developed from ideas familiar to corporate analysts and investors. It aims to provide not just a theoretical framework for analysing growth, elements of the business cycle, and the cashflows associated with them, but also practical demonstrations and tools. Throughout, the ideas will be accompanied by casestudies derived from current or nearcurrent economic and financial situations, principally from the US and Asia.Each class will kick off with a discussion of current events in the markets and how these relates to the course material.

 



Course Category

Core Courses
Major Area Courses
X
Supportive Courses
Media and Management Skills Courses
Transferable Skill Courses

 

WEEKLY SUBJECTS AND RELATED PREPARATION STUDIES

Week Subjects Related Preparation
1 Focus on competitive markets starting from goods markets and extending to financial markets Read Chapter 1113 from the book The Truth about the Markets by John Kay
2 Introduction to investments. Where does the money come from? Who are the key players and why do they invest? What is an asset class? Follow financial press and be ready to quote/discuss relevant events/stories/articles. Write a short essay as to why people invest.
3 A general overview of macroeconomic indicators and basic identities. Understanding economic, business and financial market cycles. Follow financial press and be ready to quote/discuss relevant events/stories/articles. Students will review their previous macroeconomic literature and be ready to contribute to the debate
4 Introduction to concept of “policy” and understanding central banks, treasuries and their objectives. Follow financial press and be ready to quote/discuss relevant events/stories/articles with specific emphasis on recent policy decisions
5 Start building intuitive models to link policy, macroeconomic news flow and financial markets. Concept of value and valuation. Follow financial press and be ready to quote/discuss relevant events/stories/articles. Students will be asked to study company balance sheets and P&Ls.
6 Midterm exam and Movie “Barbarians at the Gates” Review of all previous lectures.
7 Introduction to portfolio approach to investment. Quantification of risk and Risk/Return trade off Review and understand basic statistical concepts of standard deviation, variance, covariance, correlation. Follow financial press and be ready to quote/discuss relevant events/stories/articles.
8 Introduction to multi asset and multi currency portfolios and the concept of Asset Allocation, both strategic and tactical. Follow financial press and be ready to quote/discuss relevant events/stories/articles.
9 Analysing country risk and how changes in risk leads to changes in asset preferences. Students will analyse an emerging country of their choice and present their findings.
10 Introduction to Capital Asset Pricing Model, Modern Portfolio Theory and Efficient Market Hypothesis. Follow financial press and be ready to quote/discuss relevant events/stories/articles.
11 A review of precrisis economic and financial world order with specific emphasis on Bretton Woods II. Follow financial press and be ready to quote/discuss relevant events/stories/articles. Review Bretton Woods structure.
12 Understanding the concept of Private Sector Savings Surplus and its impact on financial market returns. Review Asian economic and business model. Follow financial press and be ready to quote/discuss relevant events/stories/articles.
13 Midterm exam and watch bond and equity markets part of documentary “Ascent of Money” by Niall Ferguson Review of all previous lectures since the beginning of semester.
14 Discussions on the 200708 Financial crisis. Analyse the reasons that caused the crisis. Introduction to the concept of Pricing Model Uncertainty Students will study and bring articles on the financial crisis to be discussed during the lecture.
15 Review of course material and case studies prior to final exam
16 Review of the Semester  

 

Course Notes/Textbooks The Truth About The Markets – John KayThe Long and Short of It – John KayPublications by Woody H Brock and Michael Taylor
Suggested Readings/Materials When Markets Collide – Muhamed El Erian Black Swan – Nicholas Taleb Fooled By Randomness Nicholas Taleb

 

EVALUATION SYSTEM

Semester Activities Number Weigthing
Participation
16
10
Laboratory / Application
Field Work
Quizzes / Studio Critiques
Homework / Assignments
5
20
Presentation / Jury
1
10
Project
Seminar / Workshop
Oral Exams
Midterm
2
30
Final Exam
1
30
Total

Weighting of Semester Activities on the Final Grade
70
Weighting of End-of-Semester Activities on the Final Grade
30
Total

ECTS / WORKLOAD TABLE

Semester Activities Number Duration (Hours) Workload
Theoretical Course Hours
(Including exam week: 16 x total hours)
16
3
48
Laboratory / Application Hours
(Including exam week: 16 x total hours)
16
Study Hours Out of Class
15
3
Field Work
Quizzes / Studio Critiques
Homework / Assignments
5
6
Presentation / Jury
1
22
Project
Seminar / Workshop
Oral Exam
Midterms
2
20
Final Exam
1
40
    Total
225

 

COURSE LEARNING OUTCOMES AND PROGRAM QUALIFICATIONS RELATIONSHIP

#
Program Competencies/Outcomes
* Contribution Level
1
2
3
4
5
1

To improve and deepen actual and advanced level knowledge in economics in the level of expertise by inventive thoughts and/or research and to get inventive contributions to science.

X
2

To comprehend the interaction between economics and related fields; to achieve inventive results by using knowledge requiring expertise in analysis, synthesis and evaluation of new and complex ideas.

3

To be able to apply the advanced level knowledge acquired in economics and finance.

4

Creating new knowledge by combining the knowledge of financial economics with the knowledge coming from other disciplines and also be able to solve problems which requires expert knowledge by applying scientific methods.

5

To be able to critically evaluate the knowledge in financial economics, to lead learning and carry out advanced level research independently.

6

Being able to use a foreign language for both following scientific progress and for written and oral communication.

X
7

To be able to develop new strategic approaches for unexpected, complicated situations in financial economics and take responsibility in solving it.

X
8

To be able to use computer programs needed in the field financial economics as well as information and communication technologies in advanced levels.

9

To possess the communication network to put the economic and social needs of the region of residence on the agenda.

10

To have adequate social responsibility and conciousness about the needs of society and to have the experience and authority  to organize and support the operations that can affect and drive  the social dynamics when necessary.

11

To be able to think analytically to identify problems in financial economics and to be able to make policy recommendations in economics and finance based on scientific analysis of issues and problems.

X
12

To protect the social, scientific and ethical values at the data collection, interpretation and dissemination stages and to be able to introduce and supervise these values.

X
13

To be able to use the skills of modeling, empirical analysis and formulating policy options that are developed for financial economics, in interdisciplinary contexts.

*1 Lowest, 2 Low, 3 Average, 4 High, 5 Highest