Course Description
Over the past two-and-a-half decades, capital markets have markedly grown in influence, increasingly taking over from governments and banks the tasks of financing economic activity and serving the publics' saving and retirement needs. After introducing students to the operational and regulatory framework of the currency, bond, equity, mutual/hedge funds, and derivative markets, the course poses the question: do these markets, on balance, negatively or positively influence the social structure, economy, and politics of nations? In assessing this issue, the course surveys the debate surrounding theories of capital market efficiency and rationality, the history of recurring financial bubble and crash sequences, social justice issues raised by investment in morally suspect industries and emerging economies, the constraints imposed by the markets on governments' ability to manage their economies, the tension between democratic governance and central banking, the spread of an equity culture, and proposals for a new international financial architecture. Essentially, this course stresses the institutional details of capital markets, while placing them within their socio-economic and political contexts. Students who have taken ECON 400 Money, Markets and Democracy cannot take this course
