| Unit name | Economics for Finance and Management |
|---|---|
| Unit code | ECONM1014 |
| Credit points | 15 |
| Level of study | M/7 |
| Teaching block(s) |
Teaching Block 1 (weeks 1 - 12) |
| Unit director | Dr. Katerina Raoukka |
| Open unit status | Not open |
| Pre-requisites |
None |
| Co-requisites |
None |
| School/department | School of Economics |
| Faculty | Faculty of Social Sciences and Law |
The unit provides the opportunity to MSc students who do not necessarily have Economics background to be introduced to core concepts of macroeconomics and microeconomics. This course aims to provide students with a basic yet profound understanding of economics, and to apply economic theories to real world problems. It aims to help students understand the world around them, equipping them with the key principles necessary for the analysis of a range of basic economic problems and policies. Analysis of current contemporary economic issues is the key feature of the module, aiming to develop knowledge and understanding of essential components of macroeconomics and microeconomics to improve the students’ analytical skills as well as their skill to assess economic trends.
On the macroeconomic side of the course, the aim is to use current economic world events to understand economic theory. It introduces the characteristics of economies using case studies and cross-country comparisons across the core dimensions of economic activity. The unit uses simple macroeconomic models and interprets problems based on such models at a level of difficulty appropriate for an economics graduate. The macroeconomic concepts and methods used should help the student to assess macroeconomic policy and understand its impact on businesses. Finally, a guest lecturer will provide the opportunity to students to experiment on trading of currencies and commodities.
On the microeconomic side, the student has opportunity to be engaged in game theory, innovation economics, economics of information and behavioural economics. Using case studies of famous businesses such as airlines or accommodation services the student will gain greater understanding of the competition and the strategic moves of firms. Following from economics of innovation help to study the effects of technological (and otherwise) innovation on firms’ profits and on the economy as a whole. The student will also be introduced to uncertainty and risk through information economics which will nicely tie up with behavioural economics at the end of this side, to explain how people take decisions and to ask the question ‘are these decisions always rational?’.
Upon completion this unit, students will be able to:
(a) illustrate the most basic concepts and principles of macroeconomics and microeconomics;
(b) use different economic indicators and models to explain real world economics phenomena;
(c) appraise the issues relating to the macro economy and analyse the effectiveness of government economic policy on individual and firm decisions;
(d) apply behavioural economics to decision making and connect it to management;
(e) apply relevant knowledge to assess the role of asymmetric information in finance and economics;
(f) know how to apply elementary game theory to microeconomic models of firms and macroeconomic and microeconomic models of policy.
Lectures: 10 hours in macroeconomics and 10 hours in the microeconomic component
Classes: 3 hours in macroeconomics, 3 hours in microeconomics
Formative assessment:
2 pieces of course work.
Macroeconomics: The student is given a case study at the beginning of the term. Once the case study has been examined and the relevant lectures have been completed, the student is requested to answer 20 multiple choice questions together with a number of challenging short-answer and practical questions.
Microeconomics: The student is given more than one case studies. Once the relevant lectures are completed, the student is requested to answer 20 multiple choice questions together with a number of challenging short-answer and practical questions.
Summative assessment:
2.5 hours closed book exam in January (100%). The exam is of similar structure as the formative assessments. Section A (30 marks) is a set of multiple choice questions from microeconomics and macroeconomics side of the course (15 questions; 2 marks each). No explanation is required for the answers provided and there is no negative marking. Section B (40 marks) is a set of eighth short-answer questions worth 5 marks each. There are four macroeconomic questions (based on a case-study) and four microeconomic questions and the student is required to attempt them all. Section C (30 marks) is comprised of 2 practical questions requiring short interpretation (one macroeconomics, one microeconomics) worth 15 marks each.
The examination will assess all the ILOs set.
Jones, C.I. (2018) Macroeconomics, 4th edn. W.W Norton &Company, Inc.
Dixit A, Skeath S, Reiley D. (2014) Games of Strategy, 4th edn. W.W Norton &Company, Inc.
Perloff, J. (2013) Microeconomics with Calculus, Global edn. Pearson Education Limited.
Diamond, P. and Vartiainen, H. (2007) Behavioral Economics and Its Applications, Princeton University Press.
Atkinson, R. and Ezell, S. (2014) Innovation Economics, The Race for Global Advantage. Yale University Press.
