Introduction to Financial Markets - Overview
|Business Administration: International Marketing & Sales
|Business and Management
|Type of degree
Summer Semester 2024
|Course unit title
|Introduction to Financial Markets - Overview
|Course unit code
|Language of instruction
|Type of course unit (compulsory, optional)
|Teaching hours per week
|Year of study
|Level of the course / module according to the curriculum
|Number of ECTS credits allocated
|Name of lecturer(s)
None. The course has an introductory character.
The module looks at the question of how the financial markets influence companies and our private lives. In addition, some important macroeconomic issues are discussed, in particular foreign trade and economic welfare. Students should be able to recognise the resounding impact of the financial markets and their relation to the real economy.
There is a supplementary module "Introduction to Financial Markets: Market Strategy". The two modules are not consecutive and can be chosen independently.
Framework list for the topics of "Introduction to Financial Markets: Overview":
- Adam Smith and the Invisible Hand: the economic purpose of financial markets
- What does English cloth have to do with Portuguese wine? A former stock exchange trader and international trade
- Abraham Lincoln had to get along without the Federal Reserve Bank: The role of central banks and of financial market regulation
- Gold is everything: Everything that has been understood by money - from gold to BitCoin
- Whether the Indonesian jungle will die is decided in Chicago: Players, asset classes, international integration
- Nathan Mayer Rothschild is said to have earned a fortune from the Battle of Waterloo: Information, asymmetry of information and know-how as a determining factor
The module is explicitly aimed at students of all disciplines. Knowledge of economics is not a prerequisite, but is taught as required. This is possible because knowledge of business administration is not needed for an overview of the financial markets, but only for a detailed understanding of, for example, questions of business valuation.
Students should develop a basic understanding of economics that allows them to recognize the penetrating effect of the financial markets. In addition, the module is designed to promote interdisciplinary thinking in a targeted manner.
In detail, students will be able to describe in basic terms the purposes of the financial markets, the actors in them and the role of information, information asymmetry and intermediation.
Students can name important characteristics of money and reflect on how the concept of money is to be seen in the age of cryptocurrencies.
Students can describe what economic and financial market cycles are and how these cycles are related. They know the central theory of foreign trade (comparative advantage) as well as the concept of economic welfare and can deduce from this the consequences of market foreclosure.
Students can describe in broad terms how financial markets are internationally interlinked, how they are regulated and what role central banks and currency markets in particular play. They can explain the difference between monetary policy and financial policy.
Students are able to familiarise themselves further with the financial markets independently and in a structured manner.
Comment on the further development of the concept: The list of learning outcomes has been streamlined and focused with the experiences of 2018 and 2019.
On the question "How can I develop further when I work with this module? What can I take away from it?": The experience of 2018 and 2019 shows that even students of business administration usually only have introductory knowledge of the financial markets, but at the same time bring many questions on this subject to the course. All questions will be answered specifically and in dialogue.
Students can develop further by incorporating the forces of the (capital) markets into their personal and professional planning. They can take with them the fact that one can react actively and creatively to practically any (capital) market situation.
Concrete examples: In the professional environment, students can think specifically about where we are in the economic and financial market cycle and what the current interest and exchange rate forecasts are. They can actively incorporate this information into the planning of, for example, corporate financing (business studies), production adjustments (business studies, mechatronics) or research initiatives (all).
In the private sector, students can, for example, specifically optimise their private real estate loan or make well-founded thoughts about what to do with their grandmother's savings book.
1) Before starting the course: previous knowledge, interests and any specific questions
and literature suggestions of the course participants are collected against the background of the preliminary curriculum. This results in a "heatmap" of the most important topics. They will get the largest space in the course.
2) During the course:
a. Impulse Lecture: In principle, there is always an impulse lecture on the topic of the day. The impulse lectures should deal with the topics of the session using particularly striking examples. For example, the role of central banks can be shown very strikingly by comparing the world economic crisis of 1929-1933 with the "Great Recession" of 2008-2011.
Role of the lecturer: dominating, lecturing
b. More complex topics are prepared using "Inverted Classroom" methods. It is likely that such methods will be required for the history of money and the relationship between central bank interest rates and market interest rates.
Role of the teacher: informative, orienting, stimulating
c. Discussion: In the discussion the students should talk intensively about the impulse lecture. Ideally, there are different points of view, about which a constructive debate can then take place. In addition, the students should ask the questions they specifically want to ask about the contents of the impulse lecture. This should particularly encourage them to take an active role themselves.
Role of the lecturer: moderating, informing
d. Own questions: Students should always be able to ask questions they encounter in connection with the contents of the course, even if such questions go far beyond the actual contents of impulse lectures. Last year, for example, participants were interested in Turkish central bank policy and real estate loans. For organisational reasons, it might be useful to bundle such questions in a separate agenda item.
Role of the lecturer: informing, activating, giving impulses
e. Independent teamwork: In connection with the impulse lecture, students will get some impulses for their own teamwork that are as up-to-date as possible. This should also encourage them to take an active role themselves, to question the significance of macro-phenomena for their own life-world and to consider whether certain facts might not be seen quite differently. The results will be presented briefly afterwards.
Examples: In the context of central banks, independent team work on central bank independence is a good example (Turkey, USA). In connection with interest rate policy, for example, zero interest rate policy, Christine Lagarde or LTRO are interesting.
Role of the lecturer: supporting, moderating
The core objective from the point of view of the teacher is that students should be able to discover the relevance of the topic for themselves and to integrate the issues addressed more actively into their own environment in the future. This cannot be checked by an exam. The examination method aims therefore to examine exemplary and mindset-oriented on the basis of active participation and a seminar paper on a self-chosen topic.
Evaluation criteria: the usual academic quality criteria; in addition curiosity, independence, creativity, analytical approach, associative thinking, transfer, reflection, courage to leave gaps.
A reader with introductory and in-depth texts is offered. The reading is recommended, but not obligatory.
Daily updated materials are used for independent team work and "Inverted Classroom" elements.
During the course of the event, some digital resources will be presented and recommended. "Classical" texts are mentioned where useful, but are mostly not recommended because they go into too much technical detail (Mankiw: Macroeconomics) and/or are not up-to-date enough (Keynes: The General Theory of Employment, Interest and Money: with The Economic Consequences of the Peace).
The goal is a dialogical event in which the students are actively involved. All students should feel encouraged to ask their own questions and to apply the contents to their own situation. Ideally, a real discourse is created, which encourages the students to continue working on the topic independently.
The way in which they are taught should particularly encourage students to do so:
1) To perceive macroeconomic phenomena and the financial markets not as uncontrollable events outside their own living environment, but as something that has direct consequences for all of us and to which we can react intelligently by making our own decisions
2) To understand macroeconomic phenomena and financial markets as complex, adaptive systems of systems that are multidisciplinary in nature and where all actors have their own objectives and perspectives
3) To experience the questions raised as an enrichment and exciting challenge, also and especially because they can only be understood in part and incompletely