14.07 Financial Markets and the Macroeconomy


Class Info

Analyzes the macroeconomic effects of financial markets, with emphasis on understanding financial crises. Surveys the benchmark theories of asset pricing, investment, and the capital structure. Topics include risk, arbitrage, financial market equilibrium, and market efficiency. Also introduces financial frictions, and analyzes the mechanisms by which frictions cause financial crises; focuses on asymmetric information, leverage, financial intermediation, belief disagreements, asset bubbles, fire sales, bank runs, interconnections, and complexity.

This class has 14.01, and 14.02 as prerequisites.

14.07 will not be offered this semester. It will be available in the Fall semester, and will be instructed by A. Simsek.

Lecture occurs 2:30 PM to 4:00 PM on Tuesdays and Thursdays in E51-376.

This class counts for a total of 12 credits. This class counts as a HASS S.

You can find more information at the MIT Economics : Undergraduate Program site or on the 14.07 Stellar site.

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