Lecturer
Ms Yuqing Liu
Course overview
- Study period
- Semester 2, 2024 (22/07/2024 - 18/11/2024)
- Study level
- Postgraduate Coursework
- Location
- St Lucia
- Attendance mode
- In Person
- Units
- 2
- Administrative campus
- St Lucia
- Coordinating unit
- Economics School
Economic behaviour of financial markets: volatility, bubbles, efficiency; economic theories of financial markets; price determination; role of market makers & institutional factors. Non-Walrasian theories of price determination in financial market, auction markets in theory & practice.
The course examines how financial markets and financial institutions channel funds from savers to entities in need of funding, describes the payment system and the role of banks and central banks in that system, identifies the specific role of different financial instruments in the financing of the economy, analyses how these instruments are priced, investigates the inherent fragility of the financial system and describes the importance of financial regulators and central banks in maintaining financial stability. The methodology used to teach this course relies on an economic-intuition-based representation of financial mechanisms with flow-of-fund diagrams and balance sheets in a coherent and unified framework. This approach allowsﾠto debunk myths and address misconceptions that are widespread in the media, especially concerning money and banks.
The lecturer carefully links the material to important issues that are making the headlines of financial newspapers. The course introduces students to exciting issues like:
- Securitizationﾠ
- Short-selling
- Basel accord
- Quantitative easing
The course does not assume any existing knowledge in Finance, and therefore covers descriptive institutional features of the financial system that are introductory byﾠnature. However additionalﾠtechnical and detailedﾠfeatures are always included,ﾠbringing the standards of the courseﾠto a Master level. As the courseﾠtakes an Economics approach, the content includes some theories/models thatﾠdisplay a certain level of abstraction: we will explain asset pricing through arbitrage theory, interest rate formation throughﾠthe demand-supply framework of loanable funds, structure of interest rates through expectation theory and implementation of monetary policy within a reserve market model. This dual approach - a detailed and technical description of the real world operation of the financial system combined with economic theories - is what makes this course interesting, and perhaps also challenging for some students. Previous cohorts have assessed this course as being very demanding and ambitious while providing an outstanding level of learning support.
The course makes an intensive use of Blackboard, with the weekly uploading of many learning resources: lecture recordings, slides, tutorial questions with model answers, as well as a vibrant discussion board managed by the tutors and the lecturer. The assessment for the course is rich and diverse: one essay, one report, one online quiz, plus a mark for engagement in tutorials (preparation).
Course requirements
Assumed background
The course does not require any background in Finance.ﾠ The Economics tools used in the course are the basic concepts of demand and supply, mainly under the form of diagrams and occasionally with mathematical equations. Students must master basic Math techniques to fully enjoy the course.
Prerequisites
You'll need to complete the following courses before enrolling in this one:
(ECON1010 + 1020) or ((7002 or 7010 or 7000) + 7020 or 7001)
Incompatible
You can't enrol in this course if you've already completed the following:
ECON3210
Course contact
School enquiries
Student Enquiries, School of Economics
All enquiries regarding student and academic administration (i.e. non-course content information, e.g., class allocation, timetables, extension to assessment due date, etc.) should be directed to enquiries@economics.uq.edu.au.
Enquiries relating specifically to course content should be directed to econ7200@uq.edu.au.
Course staff
Course coordinator
Dr Frederique Bracoud
Tutor
Miss Anne-Claire Bouton
Ms Ceinwyn Elliott
Mr Yunlong Liu
Timetable
The timetable for this course is available on the UQ Public Timetable.
Additional timetable information
Lectures commence in Teaching Week 1. ﾠTutorials commenceﾠin TeachingﾠWeek 2. Students should refer to the timetable prior to the commencement of classes to ensure that they have the most up to date information, as from time to time late room changes may occur.ﾠThe timetable can be downloaded hereﾠPublic Timetable. The timetable is published through the UQ Public Timetable found in the APPs section of myUQ.ﾠPlease see the Learning Activities section of this Course Profile (Section 4.1) for the timetabling implications of public holidays.ﾠ
Public Holidays:ﾠWed 14 August (Brisbane Royal Show Holiday), Mon 7 October (King's Birthday).
In-Semester Break:ﾠMon 23ﾠSeptember - Sun 29 September. Semester 2 classes recommence Mon 30 September.
Aims and outcomes
A study of the economics of financial markets is meant to provide the student with an opportunity to understand how financial markets and intermediaries operate to allocate resources. The development of a new literature in economics on asymmetric information and financial structure in recent years now enables financial institutions to be taught with basic economic principles rather than only placing emphasis on a set of facts. The student will understand how financial instruments are valued, how central banks can affect the real economy by influencing the financial markets, and how the current financial crisis has emerged and propagated to various sectors and countries.
Learning outcomes
After successfully completing this course you should be able to:
LO1.
Financial Institutions - Describe the roles of financial institutions and markets.
LO2.
Financial Institutions - Explain what effects financial tools or interest rates can have to the economy.
LO3.
Financial Institutions - Analyze the role of banks and financial intermediation in the economy.
LO4.
Monetary Policy - Assess the roles of a central bank and financial institutions.
LO5.
Monetary Policy - Apply economics tools to examine the effects of monetary policies.
LO6.
Research methodology - Evaluate and discuss financial market issues in an academic report or essay.
Assessment
Assessment summary
| Category | Assessment task | Weight | Due date |
|---|---|---|---|
| Tutorial/ Problem Set |
Tutorial preparation
|
10% Individual |
(Best 10 of 11) |
| Essay/ Critique |
Homework assignment
|
30% Individual |
17/09/2024 4:00 pm |
| Paper/ Report/ Annotation |
Central Bank Report
|
30% Individual |
21/10/2024 4:00 pm |
| Examination |
Final Examination
|
30% |
End of Semester Exam Period 2/11/2024 - 16/11/2024 |
Assessment details
Tutorial preparation
- Online
- Mode
- Written
- Category
- Tutorial/ Problem Set
- Weight
- 10% Individual
- Due date
(Best 10 of 11)
- Learning outcomes
- L01, L02, L03, L04, L05
Task description
Students need to make a tutorial submission by attempting all tutorials questions prior to tutorial commencement. The 1 submission with the lowest mark will be discarded so that only the 10 best tutorial submissions will count (there are 11 sets of tutorial questions).The tutorial preparation needs to be submitted on Blackboard by 10:00 am on Mondays (Brisbane time) from Week 2. When Monday is a public holiday, the due is 8:00 am on the next day (Tuesday).
** This task evaluates student's abilities, skills and knowledge without the aid of Artificial Intelligence (AI). Students are advised that the use of AI technologies to develop responses is strictly prohibited and may constitute student misconduct under the Student Code of Conduct.
Submission guidelines
To be submitted on Blackboard on each Monday.
Deferral or extension
You cannot defer or apply for an extension for this assessment.
The assessment cannot be accepted after the due date and time as the answers will be provided in the tutorials.
Late submission
You will receive a mark of 0 if this assessment is submitted late.
The assessment cannot be accepted after the due date and time as the answers will be provided during the tutorials.
Homework assignment
- Online
- Mode
- Written
- Category
- Essay/ Critique
- Weight
- 30% Individual
- Due date
17/09/2024 4:00 pm
- Learning outcomes
- L01, L02, L03, L04, L05, L06
Task description
Students are required to write an essay answering certain tasks. In particular, students will be given an article to read, summarize and discuss on Blackboard. The word limit for the essay is between 800 words to1200 words.
** This task evaluates student's abilities, skills and knowledge without the aid of Artificial Intelligence (AI). Students are advised that the use of AI technologies to develop responses is strictly prohibited and may constitute student misconduct under the Student Code of Conduct.
Submission guidelines
Submission on Turnitin via Blackboard on
the course Blackboard site.
Deferral or extension
You may be able to apply for an extension.
The maximum extension allowed is 7 days. Extensions are given in multiples of 24 hours.
Late submission
A penalty of 10% of the maximum possible mark will be deducted per 24 hours from time submission is due for up to 7 days. After 7 days, you will receive a mark of 0.
Central Bank Report
- Online
- Mode
- Written
- Category
- Paper/ Report/ Annotation
- Weight
- 30% Individual
- Due date
21/10/2024 4:00 pm
- Learning outcomes
- L06
Task description
1. Students choose a Central Bank.
2. They are to write a report for the Central Bank which:
- Assesses the history of the Central Bank's activities in the past 10 years with formulating policy
- Assesses how the Central Bank has responded to major events
- Evaluates the effectiveness of the Central Bank's response.
** This task evaluates student's abilities, skills and knowledge without the aid of Artificial Intelligence (AI). Students are advised that the use of AI technologies to develop responses is strictly prohibited and may constitute student misconduct under the Student Code of Conduct.
Submission guidelines
Submission on Turnitin via Blackboard on the course Blackboard site.
Deferral or extension
You may be able to apply for an extension.
The maximum extension allowed is 7 days. Extensions are given in multiples of 24 hours.
Late submission
A penalty of 10% of the maximum possible mark will be deducted per 24 hours from time submission is due for up to 7 days. After 7 days, you will receive a mark of 0.
Final Examination
- In-person
- Mode
- Written
- Category
- Examination
- Weight
- 30%
- Due date
End of Semester Exam Period
2/11/2024 - 16/11/2024
- Learning outcomes
- L01, L02, L03, L04, L05, L06
Task description
1. It will consist of MCQ (or/and Yes/No), short answers including calculations, and essays.
2. Further information will be made available on Blackboard prior to the Exam.
3. This is cumulative and covers all the materials for the course.
4. The duration is 120 minutes and 10 minutes reading time.
* This assessment task is to be completed in-person. The use of generative Artificial Intelligence (AI) tools will not be permitted. Any attempted use of Generative AI may constitute student misconduct under the Student Code of Conduct.
Exam details
| Planning time | 10 minutes |
|---|---|
| Duration | 120 minutes |
| Calculator options | (In person) Casio FX82 series only or UQ approved and labelled calculator |
| Open/closed book | Closed Book examination - no written materials permitted |
| Exam platform | Paper based |
| Invigilation | Invigilated in person |
Submission guidelines
Deferral or extension
You may be able to defer this exam.
Requests for Deferral of End of Semester examinations apply to examinations held at the end of semester during the University’s examination period. A student who is unable to sit a scheduled final examination must apply for a deferred examination no later than 5 days after the date the original examination was held. Deferred exam is run centrally during the period Tuesday 10th - Friday 13th December 2024. Students eligible for a deferred exam cannot graduate during the December graduation ceremonies.
Course grading
Full criteria for each grade is available in the Assessment Procedure.
| Grade | Cut off Percent | Description |
|---|---|---|
| 1 (Low Fail) | 0% - 29% |
Absence of evidence of achievement of course learning outcomes. |
| 2 (Fail) | 30% - 46% |
Minimal evidence of achievement of course learning outcomes. |
| 3 (Marginal Fail) | 47% - 49% |
Demonstrated evidence of developing achievement of course learning outcomes |
| 4 (Pass) | 50% - 64% |
Demonstrated evidence of functional achievement of course learning outcomes. |
| 5 (Credit) | 65% - 74% |
Demonstrated evidence of proficient achievement of course learning outcomes. |
| 6 (Distinction) | 75% - 84% |
Demonstrated evidence of advanced achievement of course learning outcomes. |
| 7 (High Distinction) | 85% - 100% |
Demonstrated evidence of exceptional achievement of course learning outcomes. |
Additional course grading information
A student’s final overall end of semester percentage mark will be rounded to determine their final grade. For example, 64.5% rounds to 65%, while 64.4% rounds to 64%.
Supplementary assessment
Supplementary assessment is available for this course.
Additional assessment information
Plagiarism
The School of Economics is committed to reducing the incidence of plagiarism. Further information on plagiarism, and how to avoid an allegation of plagiarism, is available in this course profile under Policies & Guidelines. Please refer to theﾠAcademic Integrity Module (AIM). It is strongly recommended that you complete the AIM if you have not already done so.
Learning resources
You'll need the following resources to successfully complete the course. We've indicated below if you need a personal copy of the reading materials or your own item.
Library resources
Find the required and recommended resources for this course on the UQ Library website.
Additional learning resources information
Any compulsory reading will be available through Blackboard and therefore students do not need to incur any costs.
All learning resources are available on Blackboard. In addition to the reading, the resources comprise for each topic the following items: 1) slidesﾠ2) lecture recording 3) tutorial questions with detailed model answers. Those resources are grouped together per topic for students' convenience.ﾠ
Learning activities
The learning activities for this course are outlined below. Learn more about the learning outcomes that apply to this course.
Filter activity type by
Please select
| Learning period | Activity type | Topic |
|---|---|---|
Week 1 (22 Jul - 28 Jul) |
Lecture |
Outline - 1. Introduction Reading: Mishkin ch 1-3 Learning outcomes: L01 |
Week 2 (29 Jul - 04 Aug) |
Lecture |
2. Determination of Interest Rates Reading: Mishkin ch 4 Learning outcomes: L03, L05 |
Week 3 (05 Aug - 11 Aug) |
Lecture |
3. The Behaviour of Interest Rates Reading: Mishkin ch 5 Learning outcomes: L05 |
Week 4 (12 Aug - 18 Aug) |
Lecture |
4. Future Present Values and Yields Reading: Mishkin ch 6 Learning outcomes: L03, L05 |
No student involvement (Breaks, information) |
Wednesday 14/08/2024 - Royal Queensland Show public holiday Students who would normally attend tutorial on this day are advised to attend another session of the week, for this week only. |
|
Week 5 (19 Aug - 25 Aug) |
Lecture |
5. Efficient Market Hypothesis Reading: Mishkin ch 7 Learning outcomes: L01, L02 |
Week 6 (26 Aug - 01 Sep) |
Lecture |
6. Financial Structure Reading: Mishkin ch 8 Learning outcomes: L01, L02 |
Week 7 (02 Sep - 08 Sep) |
Lecture |
7. Monetary Policy I Reading: Mishkin ch 15-17 Learning outcomes: L04, L05 |
Week 8 (09 Sep - 15 Sep) |
Lecture |
8. Monetary Policy II Reading: Mishkin ch 15-17 Learning outcomes: L04, L05 |
Week 9 (16 Sep - 22 Sep) |
Lecture |
9. Banking Management Reading: Mishkin ch 9 Learning outcomes: L04, L05 |
Mid Sem break (23 Sep - 29 Sep) |
No student involvement (Breaks, information) |
Mid semester break No lecture or tutorial this week. |
Week 10 (30 Sep - 06 Oct) |
Lecture |
10. Economic Analysis of Financial Regulation Reading: Mishkin ch 10 Learning outcomes: L01, L02, L03, L04, L05 |
Week 11 (07 Oct - 13 Oct) |
Lecture |
11. Financial Crisis and Regulation Reading: Mishkin ch 11 and 12 Learning outcomes: L01, L02, L03, L04, L05, L06 |
No student involvement (Breaks, information) |
Monday 7/10/2024 - King's Birthday public holiday NOTE: Public holiday for the King's birthday; students from Monday tutorial can attend any of the other tutorials. |
|
Week 12 (14 Oct - 20 Oct) |
Lecture |
12. Review Learning outcomes: L01, L02, L03, L04, L05, L06 |
Week 13 (21 Oct - 27 Oct) |
No student involvement (Breaks, information) |
13. Personal study Consultations operate as normal. |
Policies and procedures
University policies and procedures apply to all aspects of student life. As a UQ student, you must comply with University-wide and program-specific requirements, including the:
- Student Code of Conduct Policy
- Student Integrity and Misconduct Policy and Procedure
- Assessment Procedure
- Examinations Procedure
- Reasonable Adjustments - Students Policy and Procedure
Learn more about UQ policies on my.UQ and the Policy and Procedure Library.