Global Arc

Questions at the intersection of politics and economics will be analyzed using economic methods. Particular emphasis will be placed on mathematical and game theoretic methods. The course will cover economic models of political institutions, such as elections or political parties. Topics include lobbying and interest groups, political business cycles, economic reform, and the size of government. Two 90-minute lectures. Prerequisite: MAT 203 or equivalent, or permission of instructor.

This course will explore how technology-based start-up ventures are founded, managed and financed. Specific emphasis will be put on the early stages of development. The goal is to offer perspectives on the "two sides of the coin": the entrepreneur's perspective and the financier's perspective and in particular the venture capitalist.

This course studies the asset allocation decisions and overall management of the risk and return characteristics of portfolios. It focuses on quantitative approaches to portfolio optimization, including dynamic strategies to control risks and to achieve investment goals; empirical studies of asset returns; and the money management industry. Prerequisites: ECO 202 or ORF 245; ECO 310; ECO 362 (no exceptions). Two 90-minute lectures, one preceptor.

A study of the assets and institutions of international financial markets. A key difference between these markets and others is the role of exchange rates relating the value of two or more national currencies. The course studies the market-making institutions, the market conventions and market practices as well as the interrelationships between different assets, their pricing, their trading and their use by corporations. Prerequisites: MAT 175 and ECO 202 or equivalent. Two 90-minute lectures.

This course concerns the motives and methods of corporate actions such as dividend payments, share repurchases, recapitalizations, acquisitions, divestitures, joint ventures, with a focus on the implications of such actions for the prices of a corporation's publicly traded securities. The course should be of particular interest to students considering a career in financial services. Introductory courses in micro economics, investments, and probability and statistics are prerequisites. One 3-hour seminar.

A study of models for the term structure of interest rates, bond prices and other contracts such as forwards and futures, swaps and options. The course develops the theory of arbitrage-free pricing of financial assets in continuous time, as well as special models that can be used to price and hedge fixed income securities. Prerequisites: ECO 362 (or FIN 501) and ECO 465. One three-hour lecture, one precept.

The way in which financial markets work and securities are traded can often not be reconciled with the notion of a frictionless and self-equilibrating market. In this course, we try to account for this fact and cover important theoretical concepts and recent developments in market microstructure, asset pricing under asymmetric information, financial intermediation, and behavioral finance. Topics include market efficiency, market making, financial regulation, asset price bubbles, herding, and liquidity crises. Prerequisites: ECO 300 or 310.

This course discusses how inefficiencies arise due to psychology and limits to arbitrage. The psychology of investors shapes their preferences and may impair judgment. Whether these psychological factors have an impact on financial markets ultimately depends on arbitrageurs' ability to fight against mispricing. These issues will be covered through lectures and exercises that will foster discussions about cognitive illusions and speculative bubbles. Prerequisite: 300 or 310. 362 recommended.

This course will explore in some detail a diverse range of applications of game theory drawn from a wide variety of fields in economics. The latter include finance (no trade theorems on the one hand and bubbles and crashes at the other extreme), industrial organization (oligopolistic collusion), information economics (herd behavior), behavioral economics (time inconsistency and procrastination, self control and self confidence, psychological games and applications to issues of fairness, and feelings of guilt), matching markets (resident matching with hospitals, school choice and kidney exchange), auctions (design of spectrum auctions).

This course will teach students about financial risk management through the lens of the financial crisis that began in August 2007. Topics covered will include market risk, credit risk, liquidity risk, and systemic risk. Students will draw on their background in economics, finance, probability theory and statistics. The class will be in seminar format and active participation in the discussion is encouraged. Prerequisites: 362 and 465.