About the Course
ECON 13SC
Prerequisites: Economics 1A or equivalent
The title of this course is the title of one of the books that will be required summer reading. The course will introduce modern finance theory and cover a wide range of financial instruments: stocks, bonds, options, mutual funds, exchange traded funds, mortgage back securities, etc. Historical returns on different asset classes will be examined. The efficient market hypothesis and the case for and against index funds will be discussed.
The course for 2015 will examine the ongoing policies to stimulate the economy, including the quantitative easing policy of the Federal Reserve. There will be coverage of global financial markets. We will try to reconcile the long-run return on stocks, bonds, and money market instruments with the capital asset pricing model. We will try to connect financial markets with the problems of the real economy including the entitlement programs. We will talk with venture capitalists, Federal Reserve officials, hedge fund and mutual fund managers, and those who manage large institutional endowments.
Students will be expected to write a short paper and make an oral presentation to the class. A wide range of topics will be acceptable, including market regulation, the introduction of new financial instruments, the functioning of commodity futures markets, and evaluations of the federal government intervention in financial markets.
INSTRUCTOR BIO
John B. Shoven is the Charles R. Schwab Professor of Economics and the Wallace R. Hawley Director of the Stanford Institute for Economic Policy Research. He has published over 100 articles and written or edited 20 books and is chairman of the board of Cadence Design Systems and on the boards of American Century Funds, Financial Engines, and Exponent, Inc.
