Centre
for Financial & Management Studies (CeFiMS) - University of London
Postgraduate
MSc Financial Economics
Seven
courses chosen from the following:
Macroeconomic
policy and financial markets
[C225]
Banking and capital markets [C226]
Investment and
project appraisal [C227]
The International Monetary Fund and economic policy [C213]
International finance
[C229]
Econometric principles and data analysis [C230]
Econometric analysis and applications [C232]
The Japanese
financial system [C224]
Dissertation* [C228]
*The topic
for the dissertation must be approved by the Programme Director.
Detailed Syllabus
Macroeconomic policy and financial markets
[C225]
Macroeconomic policy and financial markets focuses on the
relationship between macroeconomic policies and financial markets. How
do central banks’ policies on interest rates and credit relate to
financial markets? What is the relation between budget deficits and
financial markets? How do financial markets relate to investment and
savings flows? The course includes both theory and empirical material.
Banking and capital markets
[C226]
This course covers the role of banking and finance in the economy.
It introduces some of the central issues and ideas in modern theories
of banking and finance in the light of recent thinking about the relationship
between banking, finance and the real economy. In this course, finance
is examined within a general framework concentrating on the experience
of advanced capitalist economies, including an introduction to the current
concern with derivatives. As a contrast, applications to less developed
economies are also, briefly, considered. The course is organised around
four principal themes: the relationship between financial markets, financial
institutions, and the economy’s real investment and savings; the trade-off
between risk and expected returns and their links to information and
monitoring; the efficiency of financial markets; and the dialectic between
regulation and deregulation or liberalisation of financial markets.
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Investment and project appraisal
[C227]
This course is concerned with the methodologies used in the
selection and appraisal of investment decisions in private and public
sectors. Two main themes are addressed: what is needed from the micro,
corporate sector, point of view in order to analyse, assess and gauge
investment activities, and how cost-benefit analysis can be applied
to public sector investment projects. The course aims to introduce the
main theoretical and practical issues involved in the appraisal and
assessment of investment projects. The first part of the course covers
private and public sector investment evaluation in developed countries
(projects such as waterworks, irrigation, transport, communication,
health, education, etc.). In the latter half, the focus is on the growth
of development projects in less developed countries and addresses issues
relating to shadow pricing, environmental projects and a more theoretical
analysis of cost-benefit and appraisal methodologies, in the context
of several specific case studies.
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The International Monetary Fund and economic policy
[C213]
This course introduces a number of concepts and approaches
— in particular, disequilibrium and structuralist models of macroeconomics
and finance. One of the main aims of this course is to encourage self-directed
study. Whereas the earlier courses direct students along a firmly structured
path, this course sets the broad parameters within which a relatively
independent mode of study is encouraged, with optional topics provided
for the investigation of special interests. The macroeconomics studied
in other courses is based on equilibrium (or neo-classical) models.
In addition, this course introduces disequilibrium and structuralist
models and aims to familiarise students with the main ideas, concepts
and techniques needed to understand these models.
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International
finance [C229]
This course is concerned with the institutions of international
finance and the key policy problems that have arisen in recent decades.
It presents a policy-oriented perspective, similar to that an economist
would use when advising governments on how to work within the modern
international financial system and how to overcome its problems. The
course aims to familiarise students with the three key concepts necessary
for understanding the problems of policy formulation within the international
financial system: the institutional structure of the modern international
financial system; the principles of financial policy analysis for an
open economy; and the principles affecting some current policy issues
in international finance.
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Econometric principles and data analysis
[C230]
This course examines the interaction and confrontation between
economic theory and economic data. It is concerned with the use of statistical
and mathematical methods in analysing economic data, with the aim of
providing economic theories with sufficient empirical foundation to
enable them to be verified or refuted. Central attention is given to
regression analysis — the major tool of statistical analysis in econometrics,
to hypothesis testing and the treatment of heteroscedasticity and autocorrelation.
The MICROFIT computer package is provided for regression analysis and
diagnostic procedures. Econometrics is concerned with quantifying economic
relations, with the provision of numerical estimates of the parameters
involved and testing hypotheses embodied in economic relationships.
This course aims to provide a basic introduction to econometric analysis,
to enable students to examine economic theories with empirical data.
In doing so, it examines the difficulties inherent in confronting theory
with economic data in order to quantify economic relationships, in dealing
with errors and problems in variables which can be only observed but
not controlled, and the means of compensating for uncertainty in data.
Econometric principles and data analysis is extended by Econometric
analysis and applications, which teaches more advanced techniques
in quantitative methods. This course can be studied in its own right
but normally the University would expect it to be taken as part of the
MSc or Postgraduate Diploma programme which provides the theoretical
background required to interpret empirical data using statistical techniques.
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Econometric analysis and applications
[C232]
This is the second econometrics course that can be taken as
part of the MSc. It extends the basic introduction to econometric analysis
developed in the core course, Econometric principles and data analysis.
This course teaches the more advanced techniques of dummy variables,
lags and expectations, simultaneous equation models, non-stationarity
and co-integration and forecasting. The course ends with a brief discussion
of ‘further topics for econometrics’ for students who are particularly
keen to develop their quantitative skills beyond the course. It assumes
that students have studied the classical linear regression model at
an introductory level and that are familiar with the assumptions which
underlie the model. It is also assumed that they have a basic working
knowledge of the econometric software, MICROFIT. There are many examples
to illustrate the main themes in a way which will help you in both understanding
the econometrics and putting the theory to use with data. This course
aims to broaden knowledge and extend understanding of econometrics.
By the end of the course students should be able to: make progress with
qualitative regressors, dummy variables and the identification and estimation
of simultaneous econometric models; show how lags and expectations can
be incorporated in dynamic models; and forecast with both econometric
and time series models.
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The Japanese financial system
[C224]
The financial system of Japan, particularly its banking sector, has
frequently been in the news over the years since 1990 when Japan’s asset-price
‘bubble’ burst and the economy entered a period of stagnation. Until
early 2004, the banking sector had mostly been in the news for the wrong
reasons: bad loans, ban failures, low profitability, defensive mergers.
Even then, academics were exploring key questions about the changes
underway in Japanese finance and about the relation between the problems
in the financial sector and the real economy. Those questions, such
as the financing of investment across different sectors of the economy
and firms of varying size, continue to be investigated as the economy
and the financial sector appear to be showing definite signs of recovery.
And in addition to its importance for Japan’s economy – the second largest
in the world – Japan’s financial system is an important illustration
of transition from an archetypal bank-based one into a system in which
capital markets play an increasingly important role. This course explores
some of the implications of that transition, which has relevance beyond
Japan itself.
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Research methods (dissertation)
[C228]
The Research methods course covers the methodological basis
for the final dissertation. It includes methods for setting up and carrying
out research on issues in development finance and related areas. The
topic for the dissertation to be submitted by MSc students must be approved
by the Programme Director and is expected to relate to both theory and
policy issues.
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