Exam number: 6404
Semester: from 1st semester
Duration of the module: One semester
Form of the module (i.e. obligatory, elective etc.): Elective
Frequency of module offer: Irregularly
Prerequisites: Summer semester 2015: 15 students only. First come, first served.
Knowledge in micro- and macroeconomics, math and statistics. Knowledge in game theory (sequential/simultaneous games, Nash-equilibrium, backward induction). Knowledge with respect to macroeconomic models of the open economy (PPP, UIP, Mundell-Fleming model, monetary model). A refresher of the macroeconomic models of the open economy will be provided in the exercise classes.
Applicability of module for other study programmes:
Obligatory or elective in other study programmes. For further information check regulations of the study programme.
Person responsible for module: Prof. Dr. Georg Stadtmann
Name of the professor: Prof. Dr. Georg Stadtmann
Language of teaching: English
ECTS-Credits (based on the workload): 6
Workload and its composition (self-study, contact time):
Contact time (lecture, tutorials, seminar etc.) 45 h; self-study: 135 h
Contact hours (per week in semester): 3
Methods and duration of examination:
Presentation: 25 %
Written Exam: 75 %
Emphasis of the grade for the final grade: Please check regulations of the study programme
Aim of the module (expected learning outcomes and competencies to be acquired):
We will analyze micro- and macroeconomic models to understand speculative dynamics on financial markets and stability of financial markets. We will start with analyzing the impact of the different groups of financial investors on asset prices. Afterwards various kinds of financial crisis including banking, currency and sovereign debt crises will be examined. We will also discuss the policy implications and policy tools crisis to avoid such crises. Participants should deal with scientific literature and should present one paper in the exercise class.
Contents of the module:
1. Speculation: The basis for financial and currency crises?
2. Globalization of the financial markets
4. Currency crisis models
5. Models of currency crises
Teaching and learning methods:
Lectures, tutorials, seminar
Literature (compulsory reading, recommended literature):
Aschinger G.: Währungs- und Finanzkrisen (Taschenbuch); Vahlen, 1. Auflage (2001)
Bikhchandani, S.; Hirshleifer, D.; Welch, I. (1998): Learning from the Behaviour of Others: Conformity, Fads, and Informational Cascades, in: Journal of Economic Perspectives, Vol. 12(3), S. 151 -- 170.
Calvo, G.A. (1988): Servicing public debt: The role of expectations; in: American Economic Review, Vol. 78, No. 4, pp. 647-661.
Copeland L. S.: Exchange rates and international finance; Prentice Hall, Halow, 4. Edition (2005).
DeLong, J.B.; Shleifer, A.; Summers, L.H.; Waldmann, R.J. (1990): Positive Feedback Investment Strategies and Destabilizing Rational Speculation, in: Journal of Finance, Vol. 45(2), S. 379 -395.
Diamond, D.W.; Dybvig, P.H. (1983): Bank runs, deposit insurance, and liquidity; in: Journal of Political Economy Vol. 91, No. 3, pp. 401-419.
Froot, K.A.; Scharfstein, D.S.; Stein J.C. (1992): Herd on the Street: Informational Inefficiencies in a Market with Short-Term Speculation, in: The Journal of Finance, Vol. 47(4), S. 1461 -- 1484.
Milgrom, P.; Stokey, N. (1982): Information, trade and common knowledge, in: Journal of Economic Theory, Vol. 26, S. 17 -- 27.
Registration in Moodle Viadrina required.