University of Leeds - LUBS1952: Economic Theory and Applications for Finance

The LUBS1952: Economic Theory and Applications for Finance module provides a solid foundation in core economic principles for finance students. This module introduces you to both microeconomic and macroeconomic concepts, equipping you with the ability to analyse individual consumer choices, business behavior, and national economic systems. You'll delve into economic models and explore how they are used to understand real-world issues like consumption, production, inflation, and investment. By the end of the module, you'll not only grasp these economic theories but also gain practical skills in data analysis using Microsoft Excel. This blend of economic theory and data analysis empowers you to apply economic concepts to financial markets and investment decision-making, laying the groundwork for further studies in finance. 

Main topics to be covered:

• Microeconomic analysis:

  • Pure exchange economy using indifference curve analysis and Edgeworth-Bowley box framework
  • Scarcity, preference, choice, demand, supply, exchange, and equilibrium prices

• Production and supply:

  • Production economy in partial equilibrium
  • Concepts of production and supply

• Market dynamics and efficiency:

  • Pareto optimality and market failure in general equilibrium framework
  • Concepts from behavioural economics

• Applied economics:

  • Applying economic tools to financial issues
  • Data analysis skills in Microsoft Excel for economic data

• Macroeconomic theory:

  • Simplified two-sector model
  • Autonomous expenditure multiplier and equilibrium conditions
  • Government, foreign trade, money, and price-level inflation

• Economic fluctuations and policy:

  • Role of expectations and investment
  • Efficacy of fiscal and monetary policy in managing economic fluctuations