Fundamentals of Economics and Financial Markets
This course provides an assessment of the current economic scenarios of the G7 nations and the implications on the financial markets, for policy makers and investors alike.
Key Learning Outcomes:
- Understand macroeconomic fundamentals
- See the big picture - drivers, key indicators, issues of the day
- Acknowledge economics as the science of manipulating macro wealth - for what reason?
- Be able to apply the knowledge practically to their role
- Understand how macro factors might have an effect on different asset classes
- Analyse real, current data and explain its impact on the financial markets
Overview of the G7 Economies
- What is the current state of the major economies?
- To what extent are we dependent upon the US and Chinese consumer?
- What should the economies look like?
- What is the trend growth rate?
Macro-economic Policy Tools
- Fiscal Policy - Is there a limit to how much governments can spend?
- Who will be the next Greece?
- How sustainable are the developed world deficits?
- Monetary Policy
- Traditional vs. unconventional methods
- What else can central banks do when interest rates are zero?
Analysis of Asset Bubbles and the Credit Crunch
- How common are asset bubbles and what are the similarities?
- What links an equity bubble in 18th century France to the credit bubble of 2007?
- Why do investors not realize a bubble is forming?
- Exercise: Using behavioral finance tests we can explore the extent to which participants are rational
- What lessons can we learn from previous bubbles?
Monetary Policy Committee Exercise
- Using extensive economic data from the Bank of England Inflation report and analysis of current state of the economy
- Predictions as to the future path of interest rates as part of an exercise
- Comparison of delegate predictions with market forecasts