ECON 535 | Course Introduction and Application Information

Course Name
Economic and Financial Networks
Code
Semester
Theory
(hour/week)
Application/Lab
(hour/week)
Local Credits
ECTS
ECON 535
Fall/Spring
3
0
3
7.5

Prerequisites
None
Course Language
English
Course Type
Elective
Course Level
First Cycle
Course Coordinator -
Course Lecturer(s)
Assistant(s) -
Course Objectives The course explores theoretical and empirical models of economic and financial networks. It will start with an overview of the main topics in the network analysis of economic and financial systems. Then students will learn how to apply network concepts on the analysis of financial behavior and performance.
Course Description The students who succeeded in this course;
  • The students who succeeded in this course will be able to;
  • Explore various economic and financial networks and edit the raw data into a network database
  • Understand how typical/generic networks can form
  • Understand the relevancy of the network analysis with respect to financial transactions and markets
  • Examine which factors can influence the stability and robustness of financial networks
  • Grasp what systemic risk is and how it depends on network dynamics
Course Content The subjects of the course are the economic and financial networks. Materials to be covered in the course include firm ownership networks and stock prices correlation networks. Networks measures such as centrality, density and average distance will be discussed. Random link formation and strategic link formation will be examined. The spread of information, epidemics or opinions on the networks will be studied. In the course students will use network analysis software packages such as PAJEK, Dephi and igraph.

 



Course Category

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

 

WEEKLY SUBJECTS AND RELATED PREPARATION STUDIES

Week Subjects Related Preparation
1 Introduction: Network examples SEN, chapter 1
2 Network types and network measures SEN, chapter 2
3 Significance of social and economic networks NCM, chapter 1
4 Random Network dynamics SEN, chpater 3
5 Strategic Network Formation SEN, chapter 4
6 Cliques and communities NCM, chapter 3
7 Small Worlds, Preferential Attachment SEN, chapter 5
8 Midterm
9 Diffusion on networks SEN, chapter 6
10 Learning on networks SEN, chapter 7
11 Financial Assets and Correlation Networks Diebold and Yılmaz (2011), “On the Network Topology of Variance Decompositions: Measuring the Connectedness of Financial Firms” http://economics.sas.upenn.edu/sites/economics.sas.upenn.edu/files/11-031.pdf
12 Inter-BankCredit Networks Stefano Battiston & Domenico Delli Gatti & Mauro Gallegati & Bruce C. Greenwald & Joseph E. Stiglitz, 2009. "Liaisons Dangereuses: Increasing Connectivity, Risk Sharing, and Systemic Risk," NBER Working Papers 15611, National Bureau of Economic Research, Inc.
13 Bank-Firm Networks Domenico Delli Gatti & Mauro Gallegati & Bruce Greenwald & Alberto Russo & Joseph E. Stiglitz, 2010. "Business fluctuations in a credit-network economy," Papers 1006.3521, arXiv.org.
14 Systemic Risk Haldane, Andrew G., and Robert M. May. "Systemic risk in banking ecosystems." Nature 469 (2011): 351–355.
15 Network Analysis of Global Financial Architecture Lux, Thomas. "Network theory is sorely required." Nature 469 (2011)
16 Cool Network Applications

 

Course Notes/Textbooks Social and Economic Networks, 2008, Matthew O. Jackson, Princeton University Press. (SEN)
Suggested Readings/Materials Networks, Crowds, and Markets: Reasoning about a Highly Connected World. By David Easley and Jon Kleinberg. Cambridge University Press, 2010. Complete preprint on-line at http://www.cs.cornell.edu/home/kleinber/networks-book/, (NCM)

 

EVALUATION SYSTEM

Semester Activities Number Weigthing
Participation
16
10
Laboratory / Application
Field Work
Quizzes / Studio Critiques
Homework / Assignments
4
20
Presentation / Jury
1
10
Project
1
10
Seminar / Workshop
Oral Exams
Midterm
1
20
Final Exam
1
30
Total

Weighting of Semester Activities on the Final Grade
50
Weighting of End-of-Semester Activities on the Final Grade
50
Total

ECTS / WORKLOAD TABLE

Semester Activities Number Duration (Hours) Workload
Theoretical Course Hours
(Including exam week: 16 x total hours)
16
2
32
Laboratory / Application Hours
(Including exam week: 16 x total hours)
16
1
Study Hours Out of Class
16
4
Field Work
Quizzes / Studio Critiques
Homework / Assignments
4
Presentation / Jury
1
Project
1
Seminar / Workshop
Oral Exam
Midterms
1
23
Final Exam
1
30
    Total
165

 

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.

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.

7

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

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.

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.

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