Lecture Topics

Topic 1: Introduction

This topic provides you an overview of what money is and why we need to study money and finance. It also touches upon all the topics to be discussed throughout this course.

Topic 2: The Evolution of Money in Theory and Practice 

This topic examines how money and finance have evolved through times. We will first look into the functions and attributes of money in modern society. From there we will then go back in time to see how it got to the current status. 

Topic 3: Interest Rates, their determination and structure

This topic examines two theories of interest rate determination, and four theories of term structure which can be used to explain different shapes of the yield curve.

Topic 4: Central Banking and Monetary Policy

In this topic we’ll look at two main functions of central banks, the important of central bank independence, and the implementation of monetary policy.

Topic 5: Money Markets

This topic focuses on the basic role and functions of money markets, money market instruments, and money markets post-GFC.

Topic 6: Bond Markets

In this topic we’ll look at the market for long-dated securities, or bonds. More specifically, we will look at the importance of bonds, and the history of bonds. Then we'll take the US a case study to see how bonds help with a nation-building. Finally, we'll move to the modern bond market and different types of capital securities.

Topic 7: Equity Markets

In this topic we’ll look at another capital market which is equity market. At first we’ll look at the origins of the stock market, starting with foundation of the first company, VOC. Then we’ll examine the modern equity markets in terms of types of equity securities, the primary and secondary markets for equities. Then we'll move to talk about share market indices and whether the share market is a predictor of the future state of the economy. Lastly, we'll talk about the big change in recent times, the whole story of exchange traded funds and the rise of high frequency trading.

Topic 8: Derivatives and Options Markets

In this topic, at first we'll look at some basics, in which highlights that derivatives began in a way for people in the real economy to manage risks. Then we'll get into some specific types of derivative markets including forwards and futures, options. Then we will look at swap and credit default swap, and finally some reforms in the derivatives markets post GFC.

Topic 9: Behavioural Finance

Traditional finance theory is built on the notion that the actions of economic agents are guided by the criterion of maximizing expected utility. Behavioral finance (BF) takes the position that not all economic decisions can be described by the equilibrium conditions in such an economy.

In this topic, first we’ll look at what is BF and how and why they began, more specifically we will examine some stylized facts that were inconsistent with the rational utility-maximizing representative agent. Then we will look at the two theories of BF: Heuristics or the rules of thumb, and Prospect theory, which is about how our mind limits decision making process.

Topic 10: Modern forms of currencies

And we will end this course with some recent development in the world of digital and crypto currencies.