The proper functioning of financial markets is essential for the functioning of any developing or advanced market economy. This course deals with important challenges that economic policymakers face that are related to financial markets. In the first session, we present basic analytical instruments in economics and provide an overview of some fundamental results from general equilibrium theory and game theory (including experimental economics). Based on this, we study why financial markets are needed in practice. We also analyse the role of financial intermediaries in detail. We study cases in which financial markets fail to work properly and we discuss appropriate policy responses. The following sessions are devoted to the analysis of fiscal and monetary policy measures that may affect financial markets, as well as to the design of a new financial and economic order.
This course is for 1st year MIA and MPP students only.