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Department of Economics

Economic Development and Financial Systems (MSc Research for International Development)

Course Code:
15PECC056
Unit value:
0.33
Year of study:
Year 1
Taught in:
Term 1

This course is only available to students enrolled on the MSc Research for International Development programme.

The objective of this course is to develop students’ understanding of the main economic relationships that arise between the financial sector and the ‘real economy’ in the course of economic development. The course has the following two aims:

The first is critically to discuss theoretical models explaining the special role of domestic finance in a capitalist economy. The focus of analysis will be on financial intermediation. Mainstream neoclassical views based on information-theoretic analysis will be contrasted with political economy views stressing the particular character of industrial, merchant, money-dealing, and interest-bearing capital.
The second, is to analyse the two-way relationship between the domestic financial system and the ‘real economy’. To achieve this aim we will focus on the political economy of credit and examine the layering of the financial system. We will then examine the importance of broader social relations (trust, confidence, power) in the operations of financial institutions and markets. We will also discuss microfinance and its role in economic development.
Finally, we will briefly consider international finance, partly through historical analysis of international financial flows in the twentieth century

This course will delivered alongside the parallel course Financial Systems and Economic Development, worth 18 CATS credits. Students will have the opportunity to attend all lectures and tutorial, but the examinable component will be approximately  85% of the 18 CATS credits syllabus. The following topics will not be part of the examinable component of this course: Week 10: An Open Discussion on The Unfolding International Financial Crisis

Objectives and learning outcomes of the course

The objective of this course is to develop students’ understanding of the main economic relationships that arise between the financial sector and the ‘real economy’ in the course of economic development. The course has the following two aims:
1. The first is critically to discuss theoretical models explaining the special role of domestic finance in a capitalist economy. The focus of analysis will be on financial intermediation. Mainstream neoclassical views based on information-theoretic analysis will be contrasted with political economy views stressing the particular character of industrial, merchant, money-dealing, and interest-bearing capital.  
2. The second, is to analyse the two-way relationship between the domestic financial system and the ‘real economy’. To achieve this aim we will focus on the political economy of credit and examine the layering of the financial system. We will then examine the importance of broader social relations (trust, confidence, power) in the operations of financial institutions and markets. We will also discuss microfinance and its role in economic development.
Finally, we will briefly consider international finance, partly through historical analysis of international financial flows in the twentieth century.

Workload

Teaching takes place through a weekly 2 hour lecture and 1 hour tutorial

Method of assessment

Assessment weighting: Exam 70% / Coursework 30% (1 essay). Resubmission of coursework regulations apply..