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Faculty
Martin Zagler, WU Wien

Course Coordinator
ISUP Secretariat

Prerequisite/progression of the course

Introduction to economics (necessary), intermediate micro- and macroeconomics (useful)

Course content, structure and teaching

The lecture will analyse causes and consequences of the financial crisis and its policy implications. There will be 10 three hour lectures which will cover the following topics:

• Causes of the Financial Crisis
  • Global imbalances
  • The US Suprime market, CDS, CDO
  • Digression on the causes of a bubble
  • Failures of the Greenspan Fed to prick the bubble
  • Iceland, UK
  • CEEC, Austria
• Monetary Policy
  • Conventional methods
  • Unconventional methods
  • Monetary policy in the liquidity trap
• Credit Market Policy: Short-run market interventions and long-run regulation
  • Bank garantees
  • Mergers and Takeovers (US)
  • Nationalisations (UK)
  • Bad Banks (Sweden, Japan)
  • Financial market regulation
• Real Effects of the Financial Crisis
  • Investment
  • Consumption
  • Exports and protectionism
• Fiscal Policy
  • US Stimulus package
  • EU Stimulus packages
  • Cases studies: Austria, Italy, Germany
  • Keynesian effects of expansive fiscal policy during a liquidity crisis
  • Non-keynesian effects
  • Budget deficits and public debt
  • State bancrupcies

The course's development of personal competences

Analytical tools, critical thinking, interaction with other students simulating a workplace environment.

Learning Objectives

Students should learn what caused the crisis and what economic policy can do to reduce the damages caused. On a larger scale, students shall be able to learn to apply methods of economic policy for this specific case and deepen their understanding economic policy.

Teaching methods

Case Studies, Lecture, debates, Classroom games.

Examination

Voluntary mid-term feedack assignments: During the course, three voluntary homework assignments with approximately 3-5 questions will be handed out to students. This will be practical exercises that allow students to better understand the material covered in the course. It will also be an optimal preparation for the exam, as the exam will consist of similar exercises. Students will be asked to present their findings in class on a voluntary basis.

Final exam: 4-hour written exam (open book).

Exam aids: All slides and documents.

Re-take exam: 24-hour written exam.

Recommended literature

Blanchard, Macroeconomics, 5th edition, selected chapters.

Several papers and articles.

Sidst opdateret af ISUP Secretariat 29.01.2010