The financial crisis has made clear how important the proper functioning of financial markets is for the proper functioning of any market economy. This course offers an introduction to several important economic policy questions that are related to financial markets. In the first session, I present basic analytical instruments and I provide an overview of some fundamental results from general equilibrium theory. Based on this, we study why financial markets are needed in practice. In the second session, we analyze in detail the role of financial intermediaries. We study cases in which financial markets fail to work properly and we discuss appropriate policy responses (session 3). The last three sessions are devoted to the study of fiscal and monetary policy measures that may affect financial markets and to the construction of a new financial and economic order in Europe.
Please note: This course is offered to 1st year students as the advanced replacement course for the C7 Applied Economic Analysis course. Therefore a good command of essential macroeconomic analysis and familiarity with current economic policy discussions are required.
This course is also available to 2nd year students as an elective.