ELE 3913 Macro- and Financial Economics
ELE 3913 Macro- and Financial Economics
The course will provide students with an understanding about relationship between financial markets and the macro economy. The course will study how financial markets affect macroeconomic variables and, conversely, how the macro economy influences financial markets. Special emphasis will be placed on connecting theory to real-world data.
This course focus on the economy as a whole studying both macroeconomic and financial variables. Special emphasis is placed on developing knowledge about:
- The determinants of aggregate real variables such as GDP and consumption and how do they interact with financial variables such as asset prices and interest rates.
- The building blocks of modern general equilibrium macro-finance models.
- How central banks set nominal interest rates.
- The relationship between interest rates with different maturity.
- The consequences of incomplete financial markets and financial frictions.
The course will enable students to:
- Collect and analyse macroeconomic and financial data using appropriate digital tools.
- Understand the basic microeconomic foundations of general equilibrium and macroeconomic outcomes.
- Apply quantitative methods to macroeconomic and financial problems.
- Analyze the macroeconomic forces driving financial markets.
- Analyze the financial forces driving macroeconomic variables.
- Present analysis of financial and macroeconomic variables.
- Students will enhance their knowledge in economics and learn how to apply that knowledge to understand both macroeconomics and finance.
- Students will develop their analytical and computational skills.
Following are the main topics covered in the course:
- Business cycle facts: macroeconomic and financial variables
- Decision making under uncertainty
- Preferences and risk
- Consumption, saving and portfolio choice
- A macroeconomic model with asset pricing
- Households and firms, preferences and technology, resource constraints and general equilibrium
- Fundamentals of asset pricing
- Relative versus absolute pricing
- State pricing, non-arbitrage, the pricing kernel and risk premia, risk-neutral probabilities
- Monetary policy and the term-structure of interest rates
- Incomplete financial markets, precautionary saving and macroeconomic fluctuations
- Financial frictions, financial crises and the macro economy
Complementary learning tools will be used during the course. There will be exercises integrated into lectures and students will prepare an evaluation portfolio during the semester. Students will have the possibility to present their portfolio during classes.
Please note that while attendance is not compulsory in all courses, it is the student’s own responsibility to obtain any information provided in class.
Higher Education Entrance Qualification
Disclaimer
Deviations in teaching and exams may occur if external conditions or unforeseen events call for this.
This course requires prior knowledge of mathematics (MET 2910), statistics (MET 2920), business economics (BØK3422), finance (BØK 3423), microeconomics (SØK 3520), and macroeconomics (SØK 3525) or equivalent.
| Assessments |
|---|
Exam category: Submission Form of assessment: Written submission Weight: 40 Grouping: Group/Individual (2 - 4) Duration: 1 Semester(s) Exam code: ELE 39131 Grading scale: ECTS Resit: Examination when next scheduled course |
Exam category: Submission Form of assessment: Written submission Invigilation Weight: 60 Grouping: Individual Support materials:
Duration: 3 Hour(s) Comment: All exams must be passed to obtain a final grade in the course. Exam code: ELE 39132 Grading scale: ECTS Resit: Examination every semester |
All exams must be passed to get a grade in this course.
| Activity | Duration | Comment |
|---|---|---|
Teaching | 84 Hour(s) | |
Prepare for teaching | 180 Hour(s) | |
Group work / Assignments | 100 Hour(s) | |
Submission(s) | 30 Hour(s) | |
Seminar groups | 6 Hour(s) | |
Examination | 3 Hour(s) |
A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 15 ECTS credit corresponds to a workload of at least 400 hours.
All exams must be passed to obtain a final grade in the course.