Department of Economics
EC4024 FINANCIAL ECONOMICS
SPRING SEMESTER 2010/11
LECTURER: DR. STEPHEN KINSELLA
OFFICE: KB3-42
EMAIL: stephen.kinsella@ul.ie
OFFICE HOURS: WED 0900-1100
TEACHING ASSISTANT: JUAN COVARRUBIAS
OFFICE: KB2-37
EMAIL: juan.covarrubias@ul.ie
OFFICE HOURS: MON 1000-1200
MODULE OUTLINE: This module deepens students knowledge of macroeconomics and finance, buidling
on EC4004, Economics for Business. We will begin with data. First, we'll describe the categories within
which financially important variables exist, and develop ways to encapsulate them using simple statistics
drawn from the study of simple probability distributions. We will develop graphical tools to analyse
market movements in the lectures. Then we will move on to the study of financial history, to show the
influence of uncertainty and 'Black Swans' on the markets, and to help you understand just how little we
as economists really know about the markets and how they move. We will develop simple but flawed
models used to benchmark markets to round out the course, which every person interested in finance
must know, as these models begin many of the conversations one might have about a stock or a bond.
Then we will pull these models apart, so you know more than most leaving a course like this at the
undergraduate level.
SYLLABUS: There is no textbook for this module. Readings will be available on www.stephenkinsella.net
before lectures. All readings will be available electronically, either as downloads or as ebooks from the
UL Library site. Weekly, the topics to be discussed are below.
Jan 26 Lecture 1: Data, terminology, theory, and `the market'
Feb 2 Lecture 2: Guest lecture: Vincent O'Sullivan, Macroeconomics, Finance, and Regulation
Feb 9 Lecture 3: Probability and stochastic processes
Feb 16 Lecture 4: Zombie theories of finance
Feb 23 Lecture 5: Fat tailed finance or: what happens when things go very wrong
Mar 2 Lecture 6: Finance without Probability Theory, Project 1 Due
Mar 9 Lecture 7: Dealing with uncertainty,Info-gap approaches to finance. Project 1 feedback due.
Mar 16 Lecture 8: EMU and Ireland: Macro-Finance perspectives
Mar 23 Lecture 9: Banking and crises: Minsky strikes back.
Mar 30 Lecture 10: Bond markets and bond pricing,
Apr 6 Lecture 11: Theories of the exchange rate. Project 2 due.
Apr 13 Lecture 12: Discounting, behavioural finance and Neurofinance. Project 2 feedback due.
Apr 20 Easter Break
Apr 27 Lecture 13: Presentations.
ASSESSMENT
 Individual 10 Page data project, due Feb 23. This is peer reviewed. More details on the
site, this is worth 40%.
 Individual 5 page `market report', due Apr 6. This is peer reviewed. More details on the
site, this is worth 40%
 Group presentation on Ireland's Economic Crisis, due Apr 27, worth 20%.
Dept. of Economics Co-ordinator: Ms. Grainne O’Connell
Room: KB3-22A Ph: 061-202284 Email: grainne.oconnell@ul.ie