SOAS University of London

School of Finance and Management

Macroeconomic Policy and Financial markets

Module Code:
Year of study:
Year 1
Taught in:
Term 1

This course has been specially designed to increase the depth of your understanding of macroeconomics by focusing on the relation financial markets have to macroeconomics. We place the subject in a real-world context, aiming to show how theoretical and empirical knowledge of macroeconomics and financial markets provides ways to analyse the salient problems faced by modern macroeconomic policy makers.

Objectives and learning outcomes of the module

On successful completion of this course a student will be able to:

  • Outline and discuss the connection between financial markets, real saving by households, and real investment by firms
  • Analyse how monetary policy can affect real macroeconomic activity through its interaction with financial markets
  • Explain the relation between financial markets and governments’ fiscal policies
  • Discuss the effect that expectations of future inflation and interest rates can have on macroeconomic policy and financial markets
  • Analyse the connection between foreign exchange markets, imports and exports
  • Examine the possibility of instability arising from interaction between international capital flows and financial markets
  • Evaluate theories in the light of empirical evidence
  • Use theory and evidence to analyse actual problems facing macroeconomic policy makers


This module consists of a 2-hour weekly lecture over 10 weeks of term plus a revision lecture in term 3 as preparation for the final examination. Students will be supplied with a syllabus with a breakdown week by week of required and additional reading. Reading materials are usually accessed electronically from the BLE and students should come to class prepared.

This module also has a weekly 1-hour tutorial where the questions posed by the tutor relevant to the lecture are explored and discussed by the students. Students also prepare and deliver a short presentation.

Total Work load:
Students on this module will have 3 taught hours each week. Additionally, adequate personal study time should be allocated for reading and class preparation.

Method of assessment

Assessment for this module is in three elements:

  1. One tutorial presentation at 10%
  2. One essay of 2,500 words at 30%
  3. One unseen 2-hour written examination at 60%

All elements except the presentation may be resubmitted.

Suggested reading

Indicative reading list:

  • Wendy Carlin and David Soskice. ‘Macroeconomics: Institutions Instability and the financial system’ Oxford University Press (18 Dec. 2014)


Important notice regarding changes to programmes and modules