ULMS Electronic Module Catalogue

The information contained in this module specification was correct at the time of publication but may be subject to change, either during the session because of unforeseen circumstances, or following review of the module at the end of the session. Queries about the module should be directed to the member of staff with responsibility for the module.
Title Economics in Financial Markets
Code MGTK758
Coordinator Dr MJ Michalski
Finance and Accounting
M.Michalski@liverpool.ac.uk
Year CATS Level Semester CATS Value
Session 2022-23 Level 7 FHEQ Whole Session 15

Pre-requisites before taking this module (other modules and/or general educational/academic requirements):

 

Modules for which this module is a pre-requisite:

 

Programme(s) (including Year of Study) to which this module is available on a required basis:

 

Programme(s) (including Year of Study) to which this module is available on an optional basis:

 

Teaching Schedule

  Lectures Seminars Tutorials Lab Practicals Fieldwork Placement Other TOTAL
Study Hours           24

4

28
Timetable (if known)              
Private Study 122
TOTAL HOURS 150

Assessment

EXAM Duration Timing
(Semester)
% of
final
mark
Resit/resubmission
opportunity
Penalty for late
submission
Notes
             
CONTINUOUS Duration Timing
(Semester)
% of
final
mark
Resit/resubmission
opportunity
Penalty for late
submission
Notes
Group video presentation Reassessment Opportunity: individual assignment with the same brief. Penalty for Late Submission: Standard UoL penalty applies Anonymous Assessment: No  10 minutes    25       
Individual essay Reassessment Opportunity: new assignment with the same brief. Penalty for Late Submission: Standard UoL penalty applies Anonymous Assessment: Yes  -3000 words    75       

Aims

The module aims to:

Introduce students to the key principles of economic analysis;

Develop students’ understanding of the microeconomic foundations of demand and supply analysis, theory of the firm, and market structures;

Consolidate students’ knowledge of the key macroeconomic processes and indicators relevant to policymaking and to financial markets;

Provide a conceptual and practical understanding of monetary, fiscal and international trade policies;

Enable students to analyse the effects of economic factors and policymakers’ interventions on financial markets;

Develop students’ research and study skills.


Learning Outcomes

(LE1) Flexible and adaptable.
Students will understand that the finance sector is fast-changing and influenced significantly by worldwide events as well as technological advancements. The module will equip students with techniques, knowledge and confidence required to face these challenges through the use of varied learning and assessment methods used.

(LE2) A team player.
Some assessed work will require students to work in virtual groups and manage the interaction and relationships with other group members. In doing so, they will gain experience in negotiation, persuasion, influencing and managing conflict. This will be assessed as part of group assignments.

(LE3) Internationally aware.
Our teaching and research community is drawn from around the world and our students are exposed to business ideas and cultures from beyond the UK. Furthermore, online delivery will enable a collaborative approach with other practitioners from diverse international backgrounds, enabling a richer experience.

(LO1) Students will be able to demonstrate an understanding of the principles of microeconomics and macroeconomics and of their application in investment management.

(LO2) Students will be able to demonstrate an ability to identify, evaluate and critically appraise the economic factors, tools and environmental influences affecting financial markets.

(LO3) Students will be able to demonstrate an ability to explain the principles of demand and supply, define a firm’s optimal use of factors of production, and distinguish between various types of markets.

(LO4) Students will be able to demonstrate an understanding of models of aggregate demand and short-term aggregate supply, and their relation with gross domestic product and the business cycle.

(LO5) Students will be able to demonstrate familiarity with the tools and policy objectives of fiscal and monetary authorities.

(LO6) Students will be able to demonstrate an ability to explain the determinants of international trade, international capital flows, and the roles of organisations such as the World Bank, the International Monetary Fund, and the World Trade Organization.

(LO7) Students will be able to demonstrate an understanding of the mechanics of foreign exchange markets and the relationship between inflation, interest rates, and currency exchange rates.

(LO8) Students will be able to demonstrate knowledge of the determinants of long-run economic growth.

(LO9) Students will be able to demonstrate an ability to evaluate the effects of regulations on specific industries, companies, and securities.

(LRE1) A problem solver.
Students will be challenged to think critically about economic policies and their impact on financial markets. They will do this by gathering and synthesising information, analysing alternative perspectives and options and presenting a considered opinion or course of action in their assessment.

(LRE2) Commercially aware.
The subject matter will be delivered by reference to real-world events. Students will be required to demonstrate the implications and impacts of these events on these subject areas. Students will also be required to share their commercial experiences in group tasks, where appropriate.

(LRE3) Organised and able to work under pressure.
Students will be expected to plan scheduled work and meet assessment deadlines. This will be evident in the students’ independent management of their assignments and assessment deadlines.

(LRE4) An excellent verbal and written communicator.
Students will have opportunities to develop written and oral communication skills through virtual group discussions, online presentations and coursework.

(LRE5) IT literate.
Students will have opportunities to improve their IT skills. Students will demonstrate skills in the use of software applications including word processing, visual presentations, databases, spreadsheets and using the internet for information searches in the course of researching and presenting coursework. The nature of the module in terms of online delivery will enable students to develop skills in using a virtual learning/communications environment.

(LRE6) A lifelong learner.
The module will embed key finance skills and an awareness which will continue to grow as students are exposed to future experiences in their careers.


Teaching and Learning Strategies

The module will be delivered over an 8-week period, primarily through a series of weekly e-lectures. These will be supported by individual online tasks such as media clips and discussion boards. Discussion boards will be used to develop understanding and help students apply their learning. These will be moderated by the module instructor. Students will also be directed to key academic and practitioner readings to further develop their learning.

Unscheduled directed student hours: 24 hours
Description: The e-Lectures will equate to 3 hours/week over 8 weeks, undertaken asynchronously. Attendance recorded: Yes, tracked via the learning platform.
Attendance recorded: Yes, tracked via the learning platform.

Students will undertake 4 hours of synchronous activity over the 8 weeks in order to consolidate their knowledge and appreciate the practical applications of the subject matter. This will take place through group and individual sessions which will be moderated b y the module instructor.

Scheduled directed student hours: 4 hours
Description: These group and individual sessions will equate to 4 hours over 8 weeks, undertaken synchronously. The dates and times of these sessions will be provided at the start of the module. Recordings of these sessions will be made available to students who are unable to attend.
Attendance recorded: Yes, tracked via the learning platform.

Self-directed learning: 122 hours
Description: This will involve directed and independent reading, independent research, and preparation for assessment.


Syllabus

 

Demand and supply analysis: The module first discusses the differences between micro- and macroeconomics, and between normative and positive economics. It then introduces the key concepts underpinning to demand and supply analysis, such as demand elasticity, marginal costing, break-even analysis, and economies of scale.

Theory of the firm and market structures: Students will examine four fundamental market structures (perfect competition, monopolistic competition, oligopoly, monopoly), as well as the unique behaviours of demand and supply forces and the determinants of optimal price and output under each respective market structure.

Measuring national income, understanding business cycles: This topic introduces students to the key variables used in macroeconomic models (aggregate demand, aggregate supply, output, unemployment, inflation) and how they are measured, as well as their behaviour over the expansion-recession business cycle. Particular attention is paid to deri vations and applications of the IS-LM model, the short-run aggregate supply model, and the Phillips curve model.

Monetary and fiscal policies: This area focuses on the domestic policy objectives of monetary and fiscal authorities, the policy tools at their disposal, and the channels of transmission between such policies and the real economy. Students will also examine the monetary and fiscal policy responses to the 2008 financial crisis and the 2020 economic shock brought by the Covid-19 pandemic.

International trade and capital flows: The module introduces various models of international trade (the Ricardian and the Heckscher-Ohlin models) and considers the effects of trade policies such as capital restrictions, import quotas, and tariffs on firms and consumers. Students will also examine the arguments used in the free trade vs trade protectionism debate.

Currency exchange rates: This topic outlines the properties of various exchange rate regimes and discusses the eq uilibrium relationships between spot exchange rates, forward exchange rates, and interest rates. Key models such as the Mundell-Fleming model and the purchasing power parity model will be introduced.

Economic growth and development: Students will be introduced to the Mathusian and Solow models, which link an economy’s long-term growth with its endowment of natural resources, physical capital, human capital, and technological development. Students will be encouraged to discuss the factors affecting growth in developed and developing economies.

Effects of government regulation: This area centres on regulatory policymakers’ interventions in financial markets, as well as the policies and the tools that they use. Particular attention is paid to the economic rationale for introducing such regulations and their effects on specific industries, companies, and securities. The reform of regulatory frameworks in the aftermath of the 2008 crisis serve as the basis of discu ssion of costs, benefits, and externalities generated by policymakers interventions.


Recommended Texts

Reading lists are managed at readinglists.liverpool.ac.uk. Click here to access the reading lists for this module.