Descriptive summary of course: The macroeconomic environment is a constant challenge for any manager, therefore it imposes a set of constraints that are not directly controlled by him, but which are fundamental to the management decisions. As we have very present with the current economic and financial crisis, the unexpected change in these variables can influence the success of an entire management strategy; it is essential that the manager has the ability to anticipate and react to these changes. We are talking about relevant concepts such as GDP growth, inflation, unemployment, interest rate or exchange rate. This is particularly relevant in a more globalized world where globalization can be decisive for the success of the company's strategy. As such, after a general presentation of the financial system and the concept of currency, we will focus on the money market and foreign exchange market. Then will be analyzed and characterized the consequences of monetary policy. We will also study the occurrence of financial crises and currency unions, where we can address the issues of greatest current importance are the recent global financial crisis and the difficulties they have encountered the Eurozone. Thus, the fundamental aspects of the functioning of the monetary and foreign exchange markets will be discussed, evaluated the possible consequences of monetary policy, and explored the financial innovation that has characterized the markets in its various aspects.
Objectives and expected learning outcomes: The aim of this course is to provide students with an analytical framework enabling them to understand the functioning and interactions of different variables and macroeconomic markets, its impact on the business management and thus how they can affect the decisions of the manager. It is intended to make it more logical and intuitive most macroeconomic relationships, providing students with useful tools to analyze past economic developments, present and possibly even future. The study of this curricular unit will prove important in the training of a manager, both in terms of the deepening of his academic training and in the level of his professional activity. In short, and in general terms, the main objectives are: 1. to equip students with knowledge of the fundamental aspects and functioning of financial markets, specifically the money market and the foreign exchange market; 2. describe the role of money in the economy as well as its evolution in the digital format; 3. characterize the money market; 4. analyze and describe the possible consequences of monetary policy; 5. perceive the functioning of the foreign exchange market; and 6. understand the financial crises and the performance of the current economy.
Skills to be developed: At the end of the course, students should be able to: 1. To assimilate the terminology and technical language used in macroeconomic markets, with special emphasis on international financial markets; 2. Interpret studies, reports and news directly related to the dynamics of macroeconomic markets; 3. Interpret the evolution of international financial markets and assess their impact on the company; 4. Have a panoramic view of the dynamics of financial markets and realize how to capitalize on this momentum for the benefit of the company; 5. Be able to interpret, understand and discuss the past developments, present and future of the international monetary system.
Programme
1. INTRODUCTION TO MONETARY ECONOMICS 1.1 Main objectives and role in the economy 1.2 Review of main macroeconomic concepts
2. OVERVIEW OF THE FINANCIAL SYSTEM 2.1 Financial system overview 2.2 Financing of the economy and the role of banks 2.3 Markets and financial instruments 2.4 Financial intermediaries: functions and types 2.5 The monetary and financial institutions 2.6 Financial system in the Euro Area 2.7 Regulation of the Financial System and new trends
4. MONEY MARKET 4.1 Currency Demand 4.1.1 Quantitative Currency theory 4.1.2 Theory Keynesian and Neo-Keynesian theories 4.1.3 Friedman and New Quantity Theory 4.1.4 comparative view between the quantitative approach and the Keynesian approach 4.2 Currency offer and central banks 4.2.1 Determinants of the money supply 4.2.2 Money Multiplier 4.2.3 Functions and overview of Central Banks 4.2.4 Overview of the European System of Central Banks 4.2.5 Monetary aggregates
5. MONETARY POLICY 5.1 Definition and overview of monetary policy 5.2 Instruments of monetary policy 5.3 Mechanisms of transmission of monetary policy 5.4 Single Monetary Policy
6. FOREIGN EXCHANGE MARKET 6.1 Definition and overview of the foreign exchange markets 6.2 Exchange Rates 6.3 Determination of exchange rates in the long run 6.4 Determination of exchange rates in the short term 6.5 Real exchange rates and effective exchange rate
7. FINANCIAL CRISES 7.1 Brief evolution of financial crises 7.2 Types of financial crises 7.3 The financial crisis of 2007-2009 7.4 European Sovereign Debt Crisis
7.5 COVID-19: from health to economic crisis 7.6 Lessons and solutions taken from the crisis
7.6 The atual challenges of the economy
Demonstration of the syllabus coherence with the curricular unit's learning objectives
The first objective is addressed in chapters 1 and 2 of the program, which describes the vision of the financial system. The second objective "to describe the role of money in the economy, as well as its evolution in the digital format" is explored in chapter 3. The third objective is dealt with in chapter 4 with the approach to the demand and supply of money where practical exercises are used. Objective 4 "to analyze and describe the possible consequences of monetary policy" is developed in Chapter 5. The fifth objective is discussed in the 6th chapter where two temporal optics are considered: short and long term. Finally, the 6th objective is described in Chapter 7.
Main literature
Abreu, Margarida, Afonso, António, Escária, Vítor;Economia Monetária e Financeira, 2ª ed., Escolar Editora, 2012. ISBN: 9789725923511
Mishkin, Frederic S.;Economics of Money, Banking, and Financial Markets, 10ª ed. , Prentice Hall: Boston, 2012. ISBN: 9780132770248
Supplementary Bibliography
Burda, Michael e Wyplosz, Charles ;Macroeconomia: uma visão europeia, 5ª ed., Oxford University Press, 2011. ISBN: 9789896421434 ((tradução: Verlag Dashöfer))
De Grauwe, Paul ;Economics of Monetary Union, 9th ed., Oxford University Press, 2012. ISBN: 9780199605576
Krugman, Paul, Obstfeld, Maurice e Melitz, Marc ;International Economics: theory & policy, 9th ed., Pearson: Addison Wesley, 2011. ISBN: 9780132146654
Literature Notes
Netgrafia: Banco Central Europeu: https://www.ecb.europa.eu/ecb/html/index.pt.html Banco de Portugal, Estatísticas online: http://www.bportugal.pt/EstatisticasWEB/(S(uz54xbfujqbb1e2a4lfk2xvl))/Default.aspx Banco de Portugal: http://www.bportugal.pt/pt-PT/Paginas/inicio.aspx Fundo Monetário Internacional: http://www.imf.org/external/index.htm Reserva Federal Norte Americana: http://www.federalreserve.gov/ Eurostat: http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database
Learning Methods
The contents of this course will be exposed mainly through practical classes where it will be presented and discussed concepts, methodologies, and techniques, using the bibliography, informative texts, transparencies and audiovisual media. In order to provide the analysis and discussion of specific topics, references will be made to current statistical data and relevant news from the economic press, discussing them in the light of theoretical approaches studied to better integration of matter on current economic events.
The teaching methodology also includes individual assessments, which aims to promote the ability of analysis and information research and application of the acquired knowledge.
Assessment Components
Avaliação distribuída com exame final
Assessment Components
Description
Type
Time (hours)
Conclusion Date
Attendance (estimated)
Lessons
45
Assessment
Teste/Exame
2
Participação Presencial
9
Projectos
50
Study
54
Total:
160
Continuous Assessment
Continuous assessment is composed per three components:
1. Two continuous assessment tests (with a weighting of 20% for the first test and 40% for the second test). 2. Two written reports that cover the topics to be presented by the guests of the course. The reports will be made and submitted via ISAG elearning platform. Each report has a weighting of 10% of the final grade (overall this component has a weighting of 20% of the final grade). 3. An interdisciplinary project work, based on the following rules: a) The project involves the Monetary and Digital Economics and Strategic Management courses;
b) Such work will target the identification and critical analysis of macroeconomic and financial environment and corporate strategy(ies) of a company, and will output a set of management recommendations in such areas;
c) Each group will have a maximum of 3 participants;
d) The work approach methodology is as follows: (i) in the first part, there will be a macroeconomic information collection (integrating the knowledge acquired in the course of Monetary and Digital Economics) taking into account the nature of the company in the study; (Ii) the second part will be a diagnosis of the situation critical analysis of the(s) strategy(ies) pursued by the company and will output a set of recommendations of strategic nature (according to a predefined structure and matter taught the course of Strategic Management).
e) The evaluation of the project work will be based on the preparation of a written report and will be submitted via ISAG elearning platform. Each of the parts will be assessed only in the respective course;
f) The work has a weighting of 20% on the final grade;
g) Although the working group is addressed in a teamwork context, the assessment will be individualized. It takes into account not only the team's performance in research and implementation of each element of the assessment but also the performance of each element in the oral presentation.
Under the terms of the Master's Regulation:
1. The actual presence of the students in the classes will be registered and, if the number of absences per student exceeds 30% of the total number of contact sessions provided for each course unit, it will automatically be transferred to the final evaluation of the normal season. 2. In written tests and other evaluation elements referred to in paragraph 2 of Article 26 it is necessary to obtain a minimum grade of 7.5 (seven point five) values. 3. If the student is absent or has a grade lower than 7.5 points in the tests or evaluation elements referred to in the previous number, he will be automatically transferred to the final evaluation of the normal season.
4. If the student fails to obtain a grade of less than 7.5 points in the second written test (held on the same date as the final written test of the normal time), he or she may apply for evaluation at the time of appeal.
Final Exam
The exam will correspond to 100% of the final grade.
Improvement of final grade
Demonstration of the coherence between the teaching methodologies and the learning outcomes
In order to achieve the objectives described above, the classes include the presentation of theoretical contents where the Microsoft PowerPoint program is used. In the application of the contents taught, students are offered practical cases and exercises and in "PDF" format. The different chapters also use the Microsoft Excel program.