This module is an advanced module in Economics aimed at students in the final year of an undergraduate course. It is suitable for students in programmes in Economics and Finance, Accounting and Finance and undergraduates in Business programmes that wish to take an Economics/Finance module.
The Foreign Exchange Market
Characteristics and participants in the foreign exchange market.
Interaction of Hedgers, Arbitrageurs and Speculators.
Speculation and the forward exchange rate.
Basic Demand/Supply analysis.
The Balance of Payments
Explanation of the current and capital/financial accounts of Balance of Payments.
The Net International Investment Position (NIIP).
IS/LM Analysis.
The goods market and the IS curve.
The money market and the LM curve.
The impact of fiscal and monetary policy changes in the model.
The interaction between fiscal and monetary policies in the model.
Linking IS/LM analysis with aggregate demand/aggregate supply analysis.
The Mundell-Fleming Model of the Small Open Economy.
The IS* and LM* curves of the Small Open Economy with the exchange rate included. The impact on the model of changes in fiscal policy, monetary policy and trade policy under both fixed and flexible exchange rates. Incorporating interest rate differentials and a risk premium into the Mundell-Fleming model.
Private and Sovereign Debt
Mathematical analysis on how to stabilise government debt and the government debt/GDP ratio.
Mathematical analysis to show how a change in the government discretionary deficit affects the equilibrium deficit.
The doom loop between private and public debt.
The Classical Model
Using equations and diagrams to develop the Classical models of the closed economy, the SOE and the LOE.
Case studies with changes in domestic and foreign fiscal policies and their impact on output, the interest rate and the exchange rate in closed economy, the SOE and the LOE.
The Great Depression:
The different views of the causes of the Great Depression – Spending hypothesis versus Money hypothesis. Application of this analysis to other financial crises in the world economy.
This course also has a significant applied Economics aspect. Irish, European Union and U.S. economy illustrations and empirical analysis are used to show the practical aspects of the course. These illustrations in turn will very often relate to policy issues that are of current concern.
There is an emphasis on “learning by doing” i.e. the Socratic method in this module. Students are asked questions during lectures and are “encouraged” to participate. Each topic involves significant “block building” and students are required in lectures to show both an understanding of the material developed in previous lectures and a capacity to apply this material in the further development of the topic. Students are also given problems to solve between lectures and then the students and lecturer jointly develop solutions in subsequent lectures. Part of the practical application of the theory will take the form of self-directed learning. Participants will be required to engage with some prescribed research papers. The capacity to understand and critically evaluate this research will form part of the assessment of the module.
| Module Content & Assessment | |
|---|---|
| Assessment Breakdown | % |
| Formal Examination | 80 |
| Other Assessment(s) | 20 |