Financial and Business Economics

Core Modules

Year 1

• Principles of Economics

  Principles of Economics is a first-year undergraduate module in how the economy works. The module is suitable for students with or without A-Level economics or equivalent. We will cover the basic theories of macroeconomics (that of the economy as a whole) and microeconomics (the behaviour of individuals, firms and governments and the interactions between them).

  The module adopts the state-of-the-art CORE approach (Curriculum Open-access Resources in Economics) to teaching Principles of Economics. The approach has three pillars which we rely on throughout the module:

  • Formulate a problem that our society is facing now or has faced in the past;
  • Build a theory to explain and solve the problem;
  • Evaluate the usefulness of the theory by using data observations and more novel theories.
• Data Skills for Economists

  Data Skills for Economists is about understanding the data we encounter constantly in everyday life and the data that social science researchers create as they explore and analyse the world around us. We'll endeavour to understand such questions as:

  • Where does data come from and how can we harvest it?
  • What useful information does the data contain?
  • How can we create new data to generate useful insights?

  Computers equipped with statistical software are a big part of the answer to the third question (above) so, accordingly, you'll spend much of your time learning to analyse and display data using the R statistical software package (R is the industry standard).

  We'll develop an ethos of clear communication of numerical information that will be supported by our growing understanding of statistical concepts and our growing proficiency with computers.

  Simultaneously, we'll delve into the seamy underside of the tricksters who try to fool you with falsified data. Understanding their game can provide at least some degree of inoculation against their attacks.

• Applied Economics and Policy

  On this module you’ll learn how to think like an economist, by learning to write essays, how to present data, how to collect economic data and how to do economic research. There are four sections each lasting half a term. The sections are economic institutions, economic history, applied economics and policy & experimental & behavioural economics. In each section, students get an overview/introduction to the topic based on economic theory which is followed by some applications/data.

• Mathematics for Economics

  The aims of the module are to cover the basic mathematical and quantitative tools used by economists every day. The module gives an emphasis to the mathematical tools, which are applicable to solving a wide range of economic problems. The first half of the module is devoted to linear algebra, specific functions of one and more variables used in economics, manipulating those functions and finding their minima and maxima. In addition, the first half of this module delivers the rules of integration and differentiation, which prepares you to apply constrained and unconstrained optimisation techniques in their subsequent 2nd and 3rd year of studies. Constrained and unconstrained optimisation techniques are also discussed. The second half of the module is devoted to optimisation theory which in turn will use the concepts of vectors and matrices, drawn from linear algebra, and require the study of concave functions. The knowledge of matrices will help you solve systems of linear equations, which are used in both microeconomic and macroeconomic planning and forecasting.

• Employability 1

  This module will be composed of an introduction to Employability, library resources, team building, and CV making. Career services will provide a session on self-awareness and decision making and library services will present their relevant resources. Finally, the Economics department will organise some team building exercises.

• Academic Integrity

  This module will describe the key principles of academic integrity, focusing on university assignments. Plagiarism, collusion and commissioning will be described as activities that undermine academic integrity, and the possible consequences of engaging in such activities will be described. Activities, with feedback, will provide you with opportunities to reflect and develop your understanding of academic integrity principles.

   

Year 2

• Microeconomics

  In this module you will develop an understanding of the models of individual optimisation and their applications. You will look at the key determinants of an individual’s behaviour in a variety of circumstances and the behaviour of firms in different market environments, such as perfect competition, monopoly and oligopoly. You will consider how changing circumstances and new information influences the actions of the economic agents concerned, and examine the properties of competitive markets and the need for government intervention to correct market failures.

• Macroeconomics

  In this module you will develop an understanding of macroeconomics and macroeconomic policy-making. You will look at a variety of contemporary and historical macroeconomic events, and the differences between the short, medium and long run. You will consider why some countries are rich and some are poor, why different economies grow at different rates, and what determines economic growth and prosperity. You will examine the role of monetary and fiscal policy, its impact on the economy and its limitations. You will also analyse how taxation, budget deficits, and public debt affect the economy.

• Econometrics 1

  The aim of this module is to provide you with a solid understanding of the essentials of empirical research techniques (i.e. econometrics) used by applied economists. The module will cover core econometric topics that are needed by all wishing to undertake econometric analysis, with a particular focus on topics in both time series and cross section econometrics that can be used by students of industrial, business and finance.

• Game Theory and Behaviour

  In this module you will develop an understanding of the mathematical models used to study and analyse strategic interactions between agents. You will look at the fundamental concepts in game theory as applied to economics in general and microeconomics in particular. You will become familiar with basic equilibrium concepts such as Nash equilibrium and subgame perfect equilibrium, and be able to find equilibrium outcomes of simple games including the use of backward induction.

• Financial Markets and Institutions

  In this module you will develop an understanding of the economic principles underlying the working of national and international financial institutions. You will look at what a financial system is and does, and the distinct functions of each component. You will consider the key financial instruments and the relationship between assets, agents, and institutions, and learn to solve simple problems using quantitative and graphical tools. You will critically evaluate country differences and analyse the interdependencies and rapid change of the modern financial world.

• Industrial Growth and Competition

  In this module you will develop an understanding of the principal-agent problem, the Coase theorem, theories of the firm, the role of transaction costs, moral hazard, adverse selection, and issues surrounding organisation, investment, governance and expansion of corporations. You will look at the role of incentivisation and how conflicts of interests shape economic interactions. You will consider the role of transaction costs in determining the existence, scale and scope of firms, and examine why government regulation may be inferior to market solutions when dealing with externalities. You will also analyse the developments of Anglo-American industrial and Japanese capitalism.

• Employability 2

  Career services will provide a session on how to be ready to apply for an internship at the end of the second year. Students will prepare for a psychometric test and will undertake a series of a mock interviews in order to improve their interview technique. Finally, students will attend at least one Econ@Work talk to be aware of professional life and challenges.

Year 3

• Industrial Economics 1

  In this module you will develop an understanding of the methods and models applied by economists in the analysis of firms and industries. You will learn how to manipulate these models and analytically solve problems relating to industrial economics. You will consider the applications of the models to important policy areas, exploring topics such as collusion, mergers, product differentiation and asymmetric information. You will also also examine the limitations of the theory.

• Industrial Economics 2

  In this module you will develop an understanding of advanced topics in industrial organisation, with a special focus on the role that information plays in markets. You will explore topics such as collusion, mergers, product differentiation, and asymmetric information, and become familiar with a broad range of methods and models applied by economists in the analysis of firms and industries.

• Financial Economics 1

  The module aims to introduce the student to what factors affect corporate financial decisions. Particular emphasis is given to the concepts of Net Present Value and Risk. The learning outcomes include: Understand what the goals of a firm are; Understand how investments are valued (Internal rate of returns) in order to help with good financial planning); Understand the concepts of risk, agency costs and how they feed into financial decision making; Understand the process of price formation in financial markets; Understand venture capital and different types of debt finance and debt valuation, including leverage.

• Financial Economics 2

  In this module you will develop an understanding of the wide range of fixed income securities and derivatives available to investors in the financial markets. You will look at the basic institutional features of derivatives markets, as well as the pricing of bonds and of derivative instruments and using them for hedging purposes. You will consider investment and trading strategies that use bonds and derivatives, and evaluate the use of bonds in immunising portfolios based on the bond's duration. You will also explore the features and uses of the most popular types of derivatives available today, including options, futures, forwards, and swaps.

• Employability 3

  This third-year course will deepen the elements covered previously in Employability 1 and 2. Career services will provide a session on how to be ready for employment at the end of the year. Students will prepare for a psychometric test and undertake a series of mock interviews in order to improve their interview technique. Finally, students will attend at least one Econ@Work talk to be aware of professional life and challenges.

Optional Modules

Below is a taster of some of the exciting optional modules that students on the course could choose from during this academic year. Please be aware these do change over time, and optional modules may be withdrawn or new ones added.

Year 1

• All modules are core

Year 2

• All modules are core

Year 3

• Behavioural Economics

  In this module you will develop an understanding of the use of experiments to test economic theories. You will look at how individuals make decisions in markets, how individuals decide to spend money today or save it for future spending, the assumption of self-regarding preferences commonly made in standard economic models, and the ability to act rationally in a strategic environment. You will consider the issues raised by experimental design and critically evaluate the advantages and disadvantages of experimental methods.

• Monetary Economics

  This is a half-year module in monetary economics. Its aim is to gain insight into more recent approaches to monetary policy, and to developments in understanding and applying such policy. The main objectives of the course will be to understand the role of money in the economy; identify the links between central bank decision making and commercial bank behaviour; know the basic theoretical underpinnings of monetary policy, monetary policy operating procedures and the central banking mechanisms. A significant part of the class discussions are focused on how the political forces affecting monetary policy making may affect inflation, which has important implications for contemporary policy making.

• Advanced Economic Theory

  In this module you will develop an understanding of the mathematics of optimisation and of equilibrium models. You will look at the linkage between markets and Pareto optimality and consider the social outcomes that can be implemented in game-theoretic equilibrium. You will also examine the basic types of auctions and when and why they implement identical outcomes.

   

• Economics of Inequality

  In this module you will develop an understanding of economic inequality. You will look at the factors that determine wage differentials among workers from a theoretical and empirical point of view. You will consider why similar workers are paid differently and examine how labour mobility can improve the allocation of workers to firms, enhance aggregate productivity, and reduce inequality.

• Labour Economics

  This course will analyse the economic issues of behaviour and outcomes in labour markets. It will focus on topics relating to labour supply and demand, wage formation and earnings inequalities:

  • Labour Demand
  • Labour Supply
  • Human Capital and Compensating Wage Differentials
  • Inequality in Earnings
  • Labor Mobility
  • Discrimination
  • Unemployment