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  3. Economics of Financial Markets

Economics of Financial Markets (ECON30024)

Undergraduate level 3Points: 12.5On Campus (Parkville)

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Year of offer2019
Subject levelUndergraduate Level 3
Subject codeECON30024
Semester 1
FeesSubject EFTSL, Level, Discipline & Census Date

The subject is a combination of principle and practice. It provides an overview of the economic principles governing financial markets; then provides insights into some important empirical and practical issues concerning the operation of financial markets; and concludes with a discussion of some practical issues associated with Australian financial markets.

Intended learning outcomes

  • Explain and analyse the role of capital markets in consumption and investment decision-making under conditions of certainty and uncertainty.
  • Explain how economic theory applies to financial markets.
  • Describe how economic theory can provide testable restrictions on financial data.
  • Analyse the main empirical results that have been established for financial markets.
  • Critically evaluate economic policy issues associated with financial markets.
  • Synthesise different theories and ideas, such as alternative models of asset pricing and portfolio allocation.
  • Apply theories to the real world - how the shape of yield curves can be used to forecast inflation in Australia for example.
  • Evaluate the relevance of competing theories. For instance, the extent to which alternative analyses can be used to predict the market price of different countries.

Generic skills

  • High level of development: written communication; problem solving; application of theory to practice; interpretation and analysis; critical thinking; synthesis of data and other information; evaluation of data and other information.

  • Moderate level of development: oral communication; collaborative learning; team work; statistical reasoning; accessing data and other information from a range of sources; receptiveness to alternative ideas.

  • Some level of development: use of computer software.

Last updated: 10 August 2019