Handbook

An important component of modern economies is the financial system. Particularly since 1980s, the “financialisation” of the economies across the globe, with the unprecedented influence of capital markets and their intermediaries that this process has involved, has had increasingly visible effects on households and firms. Modern financial development, including innovations of financial instruments and institutes, has drastically increased the borrowing and savings opportunities of households, firms have now wider investment opportunities. However, there is also an increasing awareness that economies’ performances are now deeply interlinked and subject to greater economic volatility than in the past.

This course will provide an introduction of how financial markets operates, with an emphasis on its impact upon the economy. With the guidance of the instructor, students will explore the functioning of financial markets and how they shape behaviours, constraints and opportunities in key economic areas that households, firms, financial intermediaries and policy makers operate in. We attempt to provide a key contribution to students’ understanding on the role of finance and financial institutions and how they deliver positive economic outcomes in significant ways.