Economics of Financial Markets (ECON30024)

Intended learning outcomes

On successful completion of this subject, students should be able to:

• 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.