Managers, especially those working in the finance sector, are bombarded by macroeconomics and financial news from around the world. Since almost all decisions in this increasingly interconnected world depend on both macro and foreign developments, it is important for managers to understand how to integrate this information into a coherent framework, especially during turbulent times.
Understanding Global Macroeconomics is a brief refresher program in macroeconomics, with a strong emphasis on international and financial applications. Understanding macroeconomic developments and their effect on business and finance is crucial in today’s world.
During the program we do two things simultaneously. First, we develop/review simple models of the goods and services, asset, capital, and labor markets, to be able to generate realistic predictions about the behavior of macroeconomic variables such as output, employment, inflation, the trade balance, and interest and exchange rates. At the same time, we apply these models to understand and interpret current and historical macroeconomic developments. There is a particular emphasis on understanding contemporary issues of global significance such as the consequences of Brexit, the impact of Trump, the Global Financial Crisis of 2008-09 and subsequent Euro crisis, and the Asian growth slowdown.
How you will benefit
- Understand the economic forces that are driving growth and business cycles around the world
- Acquire a clearer understanding of the linkages between the real economy and the movements of major exchange rates, interest rates and the stock market
- Understand an analytic framework with the ability to understand the causes and consequences of major current events such as Brexit, Trump’s fiscal policy, the global financial crisis, and the drop-off in Chinese growth
- Decipher the motivation and the actions of policy-makers as the United States moves away from zero interest rates while Europe and Japan do not
- Understand the factors behind currency and financial crises in developing and developed countries
|Day 1||09:00 – 17:30|
|Day 2||09:00 – 17:30|
Introduction to Aggregate Demand and Aggregate Supply
- Global business cycles: monetary and productivity shocks
– Lift-off, oil prices and Brexit
The Multiplier Model
- Fiscal policy: government spending, taxes, and implicit liabilities
– Trump, banking crises, and debt
Asset Markets and the Nominal Side: Inflation, Money, and Interest Rates
- Money demand and supply: Central banks and monetary independence
- The quantity theory, money multipliers and the transmission mechanism
- Nominal and real interest rates
– Quantitative Easing
– the Liquidity Trap
– Negative Interest Rates – a return to normal?
Case Study: The subprime crisis – can it happen again?
Opening the Economy: Capital Flows, Exchange Rates, and the Current Account
- Capital flows and country characteristics
- The real exchange rate and the current account
– Global imbalances
- Theory and evidence on purchasing power parity
The Open Economy “Mundell-Fleming” Model of Capital Mobility
- Monetary policy and Mundell’s “Holy Trinity”
- Exchange rate regimes, currency crises
Case Study: What should China do with the yuan?
Understanding Global Macroeconomics is applicable to any business professionals, coming from a broad range of disciplines in finance, corporate and strategic planning, advisory work, and financial regulatory bodies.