Course modules

Modules are taught in a two-hour block format. The first two hours deliver the core theoretical and technical concepts; these are then applied in the remaining hour which is spent in a classroom.

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ECOM001 Macroeconomics A

This module deals with the long-run growth of GDP and its short-run fluctuations. We start by analysing the traditional models of economic growth theory, ie the Solow-Swan model and the Ramsey-Cass-Koopmans model. Within the framework of these models we study the central questions of growth theory as well as the effects of government expenditure on macroeconomic variables. Then we discuss the most important ideas of endogenous growth theory, including research and development, human capital formation, and knowledge creation. The second part of the module deals with two classes of theories of aggregate fluctuations, ie real-business-cycle theories and Keynesian theories. Whereas real-business-cycle theories assume flexible prices and market clearing, Keynesian theories proceed from the assumption of nominal stickiness and market failure. We discuss possible reasons why prices and wages are sticky and analyse the implications of this fact.
Prerequisites: None

ECOM002 Microeconomics A

This module aims at providing a firm grounding in microeconomic theory. You are presented with a set of concepts and mathematical techniques which will enable you to achieve a better understanding of economic activity and outcomes. The module begins with the analysis of individual decision making, in particular choice under uncertainty and consumer choice, with special emphasis given to duality techniques. The next part of the module moves on to the analysis of multiperson decision making, both in situations of strategic interaction (game theory) and in competitive markets (general equilibrium). The last part of the module includes a general review of welfare economics and mechanism design.
Prerequisites: None

ECOM003 Econometrics A

The purpose of this module is to provide students with the necessary tools for formalising a hypothesis of interest and testing it, writing a simple econometric model, estimating it and conducting inference. The module starts with a review of the classical linear model. We then analyse finite sample and asymptotic properties of ordinary least squares, instrumental variables and feasible generalised least squares, under general conditions. Classical tests, as well as general Hausman tests, and moment’s tests are covered. The case of dependent stationary observations is also covered. Finally nonlinear estimation methods, and in particular the generalised method of moments, are covered.
Prerequisites: None

ECOM009 Macroeconomics B

The module covers a number of standard topics in macroeconomics. The module introduces the main theoretical contributions within each set of topics and critically assesses their strength and limitations in the light of the empirical evidence. The first part of the module deals with individual and aggregate consumption and saving behaviour as the outcome of optimal intertemporal choice. It uses the framework to study a number of policy issues including the effect, and optimal mix, of tax versus debt financing of government expenditure. The second part of module presents theories of firms' investment in physical capital and their implications for aggregate investment. The last part introduces two ways of looking at unemployment as an equilibrium outcome. The first view highlights the role of search frictions. The second one focuses on real wage inflexibility.
Prerequisites: ECOM001 Macroeconomics A

ECOM010 Microeconomics B

In the Microeconomics B module we pursue two goals. First, we focus on noncooperative game theory, and the economics of information. Topics include: Modelling Competitive Situations, Solution Concepts, Incomplete Information, Repeated Play, Bargaining, Moral Hazard, Adverse Selection, Market Signalling, Auctions and Mechanism Design. The second goal is to get a better understanding of some topics in recent microeconomics literature, with each student writing a short essay on the basis of some assigned literature.
Prerequisites: None

ECOM014 Time Series Analysis

The module aims to provide a foundation in time series analysis in general and in the econometric analysis of economic time series in particular, offering theory and methods at a level consonant with an advanced training for a career economist. Topics include:- An Introduction to Time Series Analysis for Econometrics and Finance; Vector Linear Time Series Models; Continuous Time Stochastic Models; Strong Dependence and Long Memory Models; and Unit Roots and Co-integration.
Prerequisites: None

ECOM015 Corporate Finance

This module aims to develop an understanding of how firms raise external finance and design their capital structure. In the first three lectures we assume that the firm’s cash flows are exogenous with respect to financial decisions. In this framework we study the Modigliani Miller theorems stating which conditions make capital structure irrelevant, and derive the optimal debt/equity mix in the presence of taxes and costly bankruptcy. The rest of the module addresses the issue of how a firm’s financial and governance structure affects its value once information problems between firms’ insiders and investors are taken into account. We first focus on the incentives of the firm’s insiders and study how capital structure impacts their agency relationship with outside investors; we then turn to outsiders’ incentives, recognising that investors play an important monitoring role in the firms they fund. We then study models linking security returns and control rights. Finally, the interaction between firms’ financial decisions and product market behaviour is addressed.
Prerequisites: None

ECOM024 Dissertation Module

ECOM025 Financial Econometrics

This module discusses econometric methodology for dealing with problems in the area of financial economics and provides students with the econometric tools applied in the area. Applications are considered in the stock, bond and exchange rate markets. The module covers the following issues: asset returns distributions, predictability of asset returns, econometric tests of capital markets efficiency and asset pricing models, intertemporal models of time-varying risk premium, and nonlinearities in financial data, value at risk, pricing derivatives with stochastic volatility (or GARCH) models, modelling nonsynchronous trading, and numerical methods in finance.
Prerequisites: None

ECOM026 Financial Derivatives

The purpose of this module is to provide students with the theory and practice of pricing and hedging derivative securities. These include forward and futures contracts, swaps, and many different types of options. This module covers diverse areas of derivatives, such as equity and index derivatives, foreign currency derivatives and commodity derivatives, as well as interest rate derivatives. This module also addresses the issue of how to incorporate credit risk into the pricing and risk management of derivatives. All the relevant concepts are discussed based on the discrete time binomial model and the continuous time Black-Scholes model. The extensions of the Black-Scholes model are also discussed.
Prerequisites: None

ECOM027 Labour Economics

The aim of this module is to enable students to gain an understanding of some relevant issues in contemporary labour economics, with an emphasis on the empirical side of the discipline. The module is a mix of theoretical economic, data analysis and econometric techniques. This reflects the nature of a discipline which is eclectic and constantly ‘on the move’. This module illustrates how economists uncover the effect of policy reforms and changes in opportunities and constraints in the labour market using microdata. The module is addressed both to prospective researchers and to those wishing to pursue a career in government, international institutions and consultation with public and private bodies. The module is not intended to be an exhaustive survey of all of the relevant issues in labour economics. The topics chosen are selected in order to illustrate the varieties of questions labour economists ask themselves and how they proceed to solve them. Topics covered include: introduction to empirical labour economics; human capital and returns to education; school quality; changes in the wage structure; changes in employment structure; US v Europe; the employment effect of minimum wages; labour supply; immigration; crime; neighbourhood effects
Prerequisites: None

ECOM032 Econometrics B

(Macroeconometrics) This module is designed to provide you with a general knowledge and the basic methods used in the current practice of macroeconometrics. The module covers the following lecture topics: A brief history of macroeconometrics and current methodological issues in macroeconometrics; the main characteristics of macroeconometrics and fundamental tools. It examines two important aspects: dynamics and interdependence; and interpretation of econometric results: expectation and exogeneity. It then goes through basic models with cointegrated time series and discusses how to link macroeconometric models to macroeconomic theory. Prerequisites: ECOM 003 Econometrics A

ECOM035 International Finance

The process of financial globalisation has emphasised the importance of international capital flows for the understanding of exchange rate dynamic behaviour. For this purpose, the emphasis of the module will be on models for exchange rate determination which is an area of central importance to major financial institutions. The module will focus specifically on (purchasing power and interest rate) parity relationships, the use of the forward rate as an optimal predictor of the spot nominal exchange rate; the asset price view of exchange rate (using either flexible or sticky prices) with financial assets as perfect substitutes; the international CAPM and the (first generation) models of currency crises. Particular attention will be paid to the implementation of the Vector Autoregression Model (VAR) as an econometric methodology to test some of the theoretical models.
Prerequisites: None

ECOM036 Mathematics for Economists

The purpose of this course is to equip students with the mathematical tools needed to study economics at the master's level and to work in the field as an academic or practitioner. The focus is on both mastering specific techniques that are widely used in economic theory and more generally on developing a language, a conceptual framework, and a standard of argument appropriate for analyzing economic questions mathematically. By the end of the course, the successful student will be able to construct a correct proof, absorb new mathematical ideas with relative ease, and read scholarly papers in economic theory.

ECOM037 Quantitative Techniques

This module aims to provide you with the necessary tools for writing and estimating simple econometric models in the context of financial quantitative analysis. Basic statistical tools needed for understanding and using financial models are introduced and explained. We will assume you have a minimal knowledge of econometrics and statistics.
Prerequisites: None

ECOM038 Behavioural Finance

The purpose of this module is to develop students’ understanding of the theoretical underpinnings of behavioural finance, the empirical research surveyed in this area and the implementation of investment strategies based on the behavioural finance approach. To compare and contrast the assumptions behind modern financial economics with behavioural finance.
Prerequisites: ECOM050 Investment Management

ECOM042 Empirical Finance

This module will revisit the Efficient Market Hypothesis in finance and its relationship to the random walk model. It will then discuss statistical tests for the random walk hypothesis and their applications to weekly returns on common stocks. It will then go deeper into the empirical analysis of asset returns data so as to uncover the main stylised facts in finance using simple descriptive statistics. To explain the stylised facts in the data, the lectures will then apply asset pricing models from the two main strands of modern finance: market microstructure theory and behavioural finance.
Prerequisites: ECOM050 Investment Management

ECOM043 Quantitative Asset Pricing

This module introduces students to the area of finance. It covers the following topics: present value, valuation of common stocks, market making, trading systems, term structure of interest rates, bond valuation and duration, bond convexity and immunization, hedging and butterfly trades in the treasury bond market, measures of risk, portfolio analysis and two fund separation theorem, capital asset pricing models, and arbitrage pricing theory models.
Prerequisites: None

ECOM044 Advanced Asset Pricing and Modelling

The aim of this module is to provide students with the analytical tools of advanced finance theory. The module will give an introduction to stochastic calculus, optimal control and martingale methods, and will cover dynamic asset pricing models, optimal consumption and portfolio theory, equilibrium models of the term structure of interest rates, option pricing of interest rates and stocks based on arbitrage and general equilibrium models, incomplete markets and portfolio optimisation in incomplete markets.
Prerequisites: ECOM043 Quantitative Asset Pricing

ECOM049 Commercial and Investment Banking

In this module you will study the role of money in the macroeconomy, the behaviour of interest rates, banks and other intermediaries, the regulation of both money markets and the banking system and the operations of central banks. The focus is on the practical aspects of money and banking as experienced by practitioners in financial institutions.
Prerequisites: None

ECOM050 Investment Management

This offers a high level introduction to concepts related to investment analysis. Topics treated include valuation of real and financial securities; the principles of investment; valuation of risky securities; portfolio analysis and bond portfolio management; financial market equilibrium; the CAPM and APT models; capital budgeting and risk; market efficiency.
Prerequisites: None

ECOM051 Business Finance

This module aims to develop an understanding of how firms raise external finance and design their capital structure. We also look at how real investments are valued and how corporations interact with financial markets. In particular, we will be looking into how firms make financial decisions. We will examine the assumption that a firm’s cash flows are exogenous with respect to financial decisions. Also studied are the Modigliani-Miller theorems stating which conditions make capital structure irrelevant, and derive the optimal debt/equity mix in the presence of taxes and costly bankruptcy. The rest of the module addresses the issue of how a firm’s financial and governance structure affects its value once information problems between firms’ insiders and investors are taken into account.
Prerequisites: None

ECOM052 Financial Statements

This module provides you with the necessary skills to interpret and analyse accounting reports when making business decisions. Topics include valuation of equity of debt instruments, ratio analysis, fundamental analysis, earning management.
Prerequisites: None

ECOM053 Quantitative Methods in Finance

This module provides an introduction to applied econometrics to financial problems. The material is presented through detailed examples with associated data and software and hence should prove useful and interesting to students whether or not they have some prior exposure to econometrics. Basic statistical tools needed for understanding and using financial models are introduced and explained.
Prerequisites: None

ECOM055 Risk Management for Banking

The module is designed to give a good insight into the risk management process and how capital is allocated. We identify the main sources of risk experienced by Financial Institutions such as credit, market, liquidity, and operational risks. Methods for quantifying and managing risk are explored in detail with an emphasis on understanding factors affecting Value at Risk (VAR) calculations. Finally, we see how reporting standards, regulation and innovation have transformed the way Financial Institutions operate and what can we learn from recent risk management failures.
Prerequisites: ECOM053 Quantitative Methods in Finance

ECOM056 Empirical Macro Economics

This module studies modern econometric methods to estimate, evaluate and forecast with structural macroeconomic models. It covers methods that are popular in Central Banks and in policy institutions. The methods covered allow us to extract cyclical information, solve and estimate structural models, evaluate the effect of monetary policy, and forecast variables such as inflation and output growth using econometric software.
Prerequisites: Econometrics A and Macroeconomics A (or equivalent; contact the lecturer before registering if you have only Econometrics A)

ECOM057 Asset Management

The purpose of this module is to provide students with practical application of modern portfolio theory and asset pricing, including active portfolio management, portfolio performance evaluation, portfolio insurance, and international portfolio diversification. On the successful completion of the module students will know how to practically implement modern portfolio management strategies and will be familiar with the practical aspects of asset valuation.
Prerequisites: ECOM050 or ECOM043

ECOM058 (MSc Law and Finance students only) Principles of Accounting

This module aims to introduce students to the fundamentals of accounting and financial reporting. The module will commence with a session on double-entry bookkeeping and its application for the preparation of basic financial statements.  This will be followed by the required accounting treatment of specific items and transactions such as inventory, depreciation, non-current assets, allowances for doubtful debts, and accruals and prepayments.  There will be sessions covering the preparation of financial statements of incorporated bodies.  This will be followed by the analysis and interpretation of financial statements, and an awareness of the usefulness of Statements of Cash Flows. 
Prerequisites: None

ECOM059 Applied Risk Management for Banking

The module is aimed at MSc Banking and Finance and MSc Investment and Finance programmes as an optional module, and fills the gap in the school’s current MSc curriculum by addressing one of the most important “hot topics” in the post-financial crisis financial industry – identification, measurement and management if risks faced by financial institutions.
Prerequisites: None

ECOM060 Further Quantitative Techniques for Finance

This module aims to provide a deeper foundation in mathematics and statistics, creating a good basis for students to draw on in their professional careers. Module content also encompasses new and specialised techniques, which may not have been studied previously.

ECOM061 (MSc Law and Finance Students Only) Financial Economics

The aim of this course is to define and provide rigorous training in Finance, the value of the Financial System, its primary institutions and participants. More specifically, its purpose is to show how firms or individuals allocate scarce resources over time under conditions of uncertainty. Finance theory is presented under a three pillars framework: optimization over time, asset valuation, and risk management (including portfolio theory).
Prerequisites: None

ECOM062 (MSc Law and Finance Students Only) Financial Management

The aim of this module is to examine some of the main principles of governance, regulation, and strategy for companies and firms in the financial services industry. The economic theory of the principal-agent model will be used as a basis to understand the theory behind financial management and related financial and regulatory risks. We will also study how principles of corporate governance apply to banks and financial institutions. We also will examine the structure of the global financial system to understand more fully the risks that bank management face. The theory of financial management will be analysed from an interdisciplinary perspective based on economic and legal theories. We will apply these theories to contemporary issues of financial management in modern global financial markets.
Prerequisites: None