Economics

The course is part of the LM degree program and is intended for advanced level students. Enrollment is by consent of the instructor. This course studies the legal foundations of the European System of Central Banks (ESCB) and the ECB mandate of monetary policy also in comparison with the Federal Reserve system and central banking in other relevant jurisdictions. Conventional and unconventional monetary policy instruments are considered in depth, also in light of relevant CJEU case law. Macroprudential supervision, lending of last resort and remits over financial stability are discussed in all their institutional and legal implications.

This course uses economic analysis to explore important questions in contemporary public policy. The first term focuses on microeconomic policy problems while the second term focuses on macroeconomic policies. The use of mathematics is minimal (in particular with no calculus) and the emphasis of instruction is on graphical analysis and economic intuition. Precise topics and readings will be announced and are selected to be of current interest.  Last year’s topics included externalities from road transportation; the implications of high income taxes in Scandinavian countries; the trade-off behind unemployment insurance systems; the effectiveness of policies to support peripheral regions; the effects of international economic integration; the patterns of long-run income and wealth inequality; the economics of global warming; Why did the UK government grant independence to the Bank of England in 1997 and adopt an inflation target?; What caused the global financial crisis and how can policy prevent future crises?; How was global financial regulation reformed in the aftermath of the crisis?; What unconventional tools of monetary policy did central banks implement?; What causes currency crises, how can policy prevent them and what sparked the Trump trade war?; Why has the US been a more successful currency union than the Eurozone, what caused the European sovereign debt crisis and how is it related to Brexit?; How should governments deal with a debt crisis - did Greece make the right choice?; What drives convergence in income levels across countries, why do some countries stay poor and what can policy do about it?

This course provides a comprehensive understanding of financial derivatives. A derivative instrument is a contract between two parties whose payoff depends on the values of the underlying variables on a future specified date. The prices of any commodity assets (such as gold or oil) or financial assets (such as equity shares or bonds) can be the underlying variables, and these assets are called underlying assets. Four categories of derivatives are covered in this course, including forwards, futures, swaps, and options. The course discusses how and where to trade these derivatives, the methods to calculate the theoretical values of these derivatives, and the trading and hedging strategies associated with these financial derivatives.

This course introduces how to find relevant and exhaustive data, how to compute and analyze data, how to propose and objective assessment of the data, and how to recommend appropriate policy. It decrypts main statistical sources by economics and policy makers to formulate their decisions. Topics include surveys, GDP, unemployment, imbalances, and leading indicators. The course covers the process for determining these data points as well as the meaning embedded within them.

Through theory, guest lectures, and empirical exercises, this course allows students to gain practical experience in alternative investments. Students learn to identify what the return-risk characteristics of alternative investments are, what drives their appeal, how to understand related technical publications, and how to construct a portfolio using them.

The course offers a panoramic view of the evolution of economic ideas from classical political economy to the recent developments in macroeconomic and microeconomic theory. The first part of the course reviews the Great Crisis and classical political economy and the early history of microeconomics such as the Marginal Revolution, the Ordinal Revolution, and the birth of game theory. The second part of the course reviews Keynesianism, monetarism, and new classical macroeconomics and beyond with a focus on macroeconomics before Keynes, the Great Depression and Keynesianism, the Great Inflation, and the Great Crisis and clashing approaches. The third part of the course reviews the recent history of microeconomics, the axiomatization of utility theory, the theory of risky decisions, and the rise of behavioral economics. Previous exposure to first-year undergraduate macroeconomic and microeconomic courses is necessary and compulsory as a prerequisite.