Our course Economics with Finance is suitable for students entering Years 12 and 13 (British System) or Class 11 and 12 (Indian System) and who have completed their IGCSE, CBSE, ICSE or other Year 10 examination.
Introduction to Economics with Finance
Over the course of the 28 June - 2 July Summer School, the following topics will be covered.
Topic 1: What is Economics? The Science of Choice
Economics is everywhere and can be applied to everything and we will look to show you some of the traditional and more diverse areas where economics is relevant. There are some important principles of economics and the key to understanding any concept where we can apply economics is to first understand the main economic problem: scarcity. We have infinite wants and finite resources and this problem leads to choices and trade-offs. We will be looking at the problems and questions that emerge because of the economic problem and explaining some of the key concepts that underlie all economic thinking, teaching you exactly what it means to 'think like an economist'.
Topic 2: Game Theory and Strategic Thinking
One of the biggest areas in economics is that of game theory and this is one area that can be applied to countless situations. Game theory is all about strategy and strategic thinking. Every day we have decisions to make and engage in economic interactions that involve some kind of trade. Game theory is one thing that can help consumers, firms, governments and society to make effective decisions. We’ll consider key concepts such as the Prisoner’s dilemma and the Nash equilibrium and applications to a variety of areas, such as football, firm behaviour. Students will engage in interactive strategic games and auctions, enjoying opportunities to put learning into practice.
Topic 3: Macroeconomics and the Global Economy
We will look at the functioning of markets and consider how equilibrium prices and quantities are determined in a variety of cases. We will consider when markets allocate resources efficiently and if they don’t what causes the market failure. Topics will include externalities, monopoly power, imperfect information, public goods and the tragedy of the commons. This then leads to questions of the role of government and we will consider the effectiveness of government policy in a variety of areas, such as health care, education, housing and food.
The Financial Crisis – we will look at the biggest financial event in decades that affected countries, firms and consumers across the world. We will discuss the background to the financial crisis and gain an understanding of the factors that created such a volatile banking system. By looking at some key markets, such as housing, construction, stocks and shares, we will analyse the impact of the financial crisis on the wider economy, consumers, investors and firms. We will bring in some key macroeconomic variables, such as interest rates and discuss government policy in countries around the world, thinking about their effectiveness in try to stabilise a vulnerable global economy.
Topic 4: Introduction to Finance
We will start by asking the simple question what is money? The answer is much more complicated than the question and we will begin by looking at the role of money within an economy. There are many uses and purposes of holding money and we will consider why a currency is actually needed and what it allows consumers, investors and governments to do. We will take a closer look at the banking system and provide an understanding of the workings of the financial sector.
The Stock Market - trillions of dollars are traded every day on the largest stock exchanges. Millions can be wiped off or added to companies within a few hours as shares change hands. We will consider the workings of the stock market, looking at the demand and supply of shares and why individuals and firm choose to hold some of their money as a paper asset, buying shares in a company. We will look at methods of measuring the value of a company and how technological changes have helped to improve the transmission of information across the largest stock exchanges and the implication for traders.
Investment - investment depends on many factors and we will analyse some of the key determinants of investment and how individuals will look at the macroeconomy when making investment decisions. We will also consider the decision-making of firms and how they decide to grow based on changes in the macroeconomy and the role of mergers and take-overs. This topic will give students an understanding of the wider economy and the impact this has on the flow of finance.
Topic 5: Economic History, Institutions and where we are today
The final topic of this course will be to consider the institutions that currently exist and take a closer look at how we have got to where we are today. This will involve some economic history, but will really look at the way in which economies have developed and the changes that we have observed and that still need to happen.
Summer School Pre-Reading
As the beginning of the summer school is fast approaching, we would like to provide you some resources that will encourage you to start to think about some of the key topics in economics that we will be discussing. During the summer school we will introduce you to some of the main concepts and ideas of economics, and show you how these apply to a variety of ‘real-world’ situations, in areas such as family life, climate change, cricket and football.
In economics, things are constantly changing and this is just one reason why it is such an exciting subject to study. The past few years have been tumultuous times for countries across the world and at all stages of development. Stemming from the Financial Crisis, we have seen many changes in finance, economics and politics and the summer school courses will aim to consider the economic causes and consequences of these and other events.
Based on the broad topics that we will be covering in the related disciplines of economics and finance, we have selected a series of online blogs, from the Sloman Economics News Site. In each blog, you will find an outline of a topic, together with some relevant articles and questions. We encourage you to read them prior to the summer school and think about the problems that they raise and this will hopefully start to see you ‘thinking like an economist’.
If you want to access additional reading – although please do not feel under pressure to do so as this is not required for the Summer School - then finding articles from any newspapers or blog sites is a good place to start. There are also many books that provide some fascinating insights into the use and application of economics.
- ‘Freakonomics’; S.J. Dubner and S.D. Levitt; 2005
- ‘The Logic of Life’; T. Harford; 2008
- ‘The Armchair economist’; S. Landsburg; 2012
- ‘The Undercover Economist’; T. Harford; 2005