ECONOMICS AND FINANCE

Single discipline educational activity

Course Sheet

Academic Year of enrolment:

2021/2022

Type of Course:

Characterising

Optional/Mandatory:

Compulsory

Degree:

Master's Degree Programme in ECONOMICS

Location:

SASSARI

Disciplinary Sector:

Political Economy

Language:

Italian

Credits:

Programme Year:

Professor and Collaborators:

DEIDDA Luca Gabriele

Hours of classroom activity:

Prerequisites:

There are no compulsory prerequisites. Competence in Microeconomics is of help.

AF code:

40003452

Assessment Methods

Verification of learning:

Final written "open books" exam and two homeworks. The final grade is the weighed average of the exam grade and of the average grade of the two homeworks with weight respectively of 70% and 30%. Students not taking the homeworks will be assessed on the basis of the written exam, only. There is the possibility to take a a midterm exam on Part I, in which case the final exam would be on Part II of the syllabus only, and the exam grade will be the average of the grades obtained in the midterm and the final exams. Students not taking the midterm will take the final exam on the overall syllabus of the course at the end of the course. Students can take as many attempts as they like at the final exam. That given, for a number of attempts greater or equal than 3, the final grade will be determined taking the weighted average of the grades awarded in all of the attempts. Fo a number of attempts lower or equal than two, the final grade will be equal to the grade achieved in the last attempt.

Distance learning (COVID-19): The exam is written. It will be on the Microsoft Teams platform. The examen is an open book.

Teaching period

First semester

Objectives

By the end of the course, students will have developed a deep critical knowledge in the following areas of financial economics: (1) Firm’s access to external finance; (2) Portfolio and consumption-saving decisions, demand of financial assets and information content of asset prices (3) Role of financial intermediation and stability of financial systems; (4) Credit market imperfections and macroeconomic outcomes.

Moreover, by means of specific course activities, students will develop and strengthen their competences and abilities to: i. identify the determinants of access to credit base on micro firm level data; ii. evaluate informational efficiency of capital markets; iii. assess the implications of portfolio decisions for the evolution of households’ wealth and households’ consumption of final goods and services; iv. identify the sources of financial system instability and assess the macroeconomic implications and the related welfare effects both in the short and the long run. Students will also develop autonomous thinking and the ability to critically assess theories and existing empirical works in the areas described above.
Finally, specifically designed group work and presentation sessions will enable students to develop and train their communication skills and problem solving competences. Knowledge and competence developed during the course will also enhance students’ ability to comprehend advanced materials in the subject, making them ready for further advance specialization studies in the subject.

Contents

The course's syllabus is as follows

Part I

1. Introduction
2. Consumption and investment choices
3. Corporate finance under perfect capital markets
4. Corporate finance under asymmetric information
5. Portfolio choices and equilibrium models for capital markets under uncertainty: Capital Asset Pricing model (CAPM), Consumption CAPM

6. Market microstructure and informational content of asset prices
7. Term structure of interest rates
8. Credit market imperfections and macroeconomic outcomes
9. Financial intermediation and financial systems stability

Recommended Bibliography

Transparencies, lecture notes, and problem sets will be made available on moodle in a timely manner

Reading list

1. J. Tirole, The Theory of Corporate Finance, MIT Press
2. T. E. Copeland, e J. F. Weston, Financial Theory and Corporate Policy, Addison Wesley
3. X. Freixas, and J. C. Rochet, Microeconomics of Banking, MIT Press
4. Modern Portfolio Theory and Investment Analysis. E. j. Elton, M. J. Gruber, S. J. Brown, W. N. Goetzman.

Students will be guided to develop the ability to use bibliographic materials in a critical and selective way to extract the relevant information useful for them to develop skills and abilities along as expected based on the learning objectives of the course.

Methods of Provision

Conventional

Teaching Methods

Lectures based on presentation and the use of the blackboard. Tutorials (max 24 hours) meant to develop students' course-specific competences as well as problem solving and presentational skills. Tutorials take place in dedicated sessions on the basis of assignments discussed with the students and distributed to them in advance. In the tutorials, students present the result of their work under the supervision of the instructor responsible for the course. Prolem set solutions are made available to students on moodle after the relevant tutorial sessions. More generally, all relevant teaching materials are made available on moodle on timely basis.

Contacts/More Information

Office hour: Fridays at 9.30-11:30 a.m. at my office at the first floor of the University main building located at Piazza Università 21. For organisational reasons, if possible, students are kindly email me at deidda@uniss.it the day before coming to the office hour.

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ECONOMICS AND FINANCE