Selected Readings in Financial Classic Literatures
Release Date: 2017-09-211. Course Type: Compulsory Major Courses
2. Class Hour: 36
3. Credit: 2
4. Suitable for: Graduated Students of Finance
Course Introduction
The whole body system of this course includes: Introduction macro and micro finance classics (papers) and frontier literature, guiding students to search, sort, and summarize the relevant literature, theory of monetary policy, asset prices and monetary policy, financial crisis theory, asset price bubble theory, the rating agency crisis, monetary standard evolve, Keynesian and monetarist argument, asset pricing theory and its development, the equity premium puzzle, IPO discount, dividend puzzle, mystery of the capital structure, long-term discount mystery, the mystery of the closed fund, small micro-finance theory and progress of inclusive finance, thesis writing literature review, retrieve financial documents, financial hotpots and frontier issues, etc.
Course Objectives
Through this course, students strive to:
1. Have comprehensive and profound understanding on these classical theories of finance.
2. Understand the financial frontier.
3. Can make literature review and understand further research.
Outline of Course Content
Chapter 1 How to retrieve the economics literature
Contents:
1. Determining retrieve content
2. Article search
3. Books and retrieval
4. Networks and other means to retrieve
Chapter 2 Monetary policy theory
Contents:
1. Development tools rules.
2. Development and innovation of goals rule.
Chapter 3 Asset prices and monetary policy
Contents:
1. Asset price bubbles and financial fragility.
2. The inflation-targeting framework for asset prices.
3. Should central bank react to asset price bubbles
Chapter 4 Financial theory crisis
Contents:
1. Early theory of financial crisis.
2. Modern theory of financial crisis.
3. International transmission of financial crisis.
Chapter 5 Rating agency crisis
Contents:
1. Rating agency Crisis.
2. Cause and reform of rating agencies crisis.
Chapter 6 Keynesian and Monetarist Debate
Contents:
1. Keynesianism.
2. Monetarism.
3. Evaluation and key of debate.
Chapter 7 Asset pricing theory and its development
Contents:
1. Traditional asset pricing theory.
2. Equity premium and standard asset pricing theory.
3. Asset pricing and fluctuations in macroeconomic.
Chapter 8 Asset price bubble theory and its empirical research
Contents:
1. Evolution of asset price bubbles type.
2. Development of the asset price bubble detection method.
3. Empirical research on asset bubbles in China.
Chapter 9 Fund investment style management
Contents:
1. Fund investment style definition.
2. Evolution identification method to recognition fund's investment style.
3. An empirical research on dynamic evolution in investment style of the fund in China.
Chapter 10 Progress in small and micro finance theory and inclusive finance
Contents:
1. Relationship Banking Theory.
2. Financial Innovation Theory.
3. Theory about asymmetric information and management costs.
4. Mechanism of small micro-finance.
5. Ideas of inclusive finance small and micro finance.
Chapter 11 Financial market risk measurement and portfolio optimization
Contents:
1. Types of financial markets and risk.
2. Financial market risk measurement methods and its development.
3. Portfolio Theory and its development.
4. Stock market risk measurement and efficient frontier portfolio construction in China
Chapter 12 How to write literature review papers
Contents:
1. What is literature review.
2. Why we need to write literature review.
3. How to write a Literature Review.
4. Format specification of literature review
Class Hour Distribution
Week 1 Chapter 1
Week 2 Chapter 2
Week 3 Chapter3
Week 4 Chapter4
Week 5 Chapter5
Week 6 Chapter6
Week 7 Chapter7
Week 8 Chapter8
Week 9 Chapter9
Week 10 Chapter10
Week 11 Chapter11
Week 12 Chapter12
The total course hour is 36 (45 minutes each class hour), which will be evenly distributed in 12 weeks, that is every week will have 3 course hours.
Text book:
1. Teaching Material
[1]ChenYulu. General Theory about Finance Literature (macro-financial volume, micro-finance volume). Renmin University of China Press.2014
[2]ChenYulu. General Theory about Finance Literature (original volume). Renmin University of China Press.2006
2. Other Materials
[1]Lu Zhengfei. Empirical research on financial accounting and capital market. RenminUniversity of China Press.2009
[2]Victor A. Canto.Understand Asset Allocation:An Intuitive Approach to Maximizing Your Portfolio. Prentice Hall Press.2006
3. Recommended Journal Article
[1]Diamond, Douglas and Philip Dybvig (1983), "Bank Runs, Deposit Insurance and Liquidity," Journal of Political Economy 91, 401-19.
[2]Krugman, Paul (1979), "A Model of Balance of Payment Crisis," Journal of Money, Credit and Banking 11, 311-325.
[3]Flood, Robert P. and Peter Garber (1984), "Collapsing Exchange Rate Regimes: Some Linear Examples," Journal of International Economics 17, 1-13.
[4]Obstfeld, Maurice (1996), "Models of Currency Crises with Self-fullling features," European Economic Review 40, 1037-47.
[5]Obstfeld, Maurice (1986), "Rational and Self-Fullling Balance-of-Payments Crises," American Economic Review 76, 72-81.
[6]Obstfeld, Maurice (1994), "The Logic of Currency Crises," Cahiers Economiques et Monétaires 43,189-213.
[7]Burnside, Craig, Martin Eichenbaum and Sergio Rebelo (2004), "Government Guarantees and Self-fullling Speculative Attacks," Journal of Economic Theory 119, 31-63.
[8]Chang, Robert and Andrés Velasco (2001), "A Model of Financial Crises in Emerging Markets,"Quarterly Journal of Economics 116, 489-517.
[9]Schneider, Martin and Aaron Tornell (2006), "Balance Sheet Effects, Bailout Guarantees and Financial Crises," The Review of Economic Studies 71, 883-913.
[10]Morris, Stephen and Hyun S. Shin (1998), "Unique Equilibrium in a Model of Self-Fulfilling Currency Attacks", American Economic Review 88, 587-596.
[11]Corsetti Giancarlo, Amil Dasgupta, Stephen Morris and Hyun S. Shin (2004), "Does One Soros Make a Difference? A Theory of Currency Crises with Large and Small Traders," The Review of Economic Studies 71, 87-113.
4. Useful websites
(1)Bank for International Settlements
http://www.bis.org/
(2)IMF
http://www.imf.org/external/index.htm
(3)Board of Governors of the Federal Reserve System
http://www.federalreserve.gov/
(4)The Peterson Institute for International Economics
http://www.iie.com/
(5)National Bureau of Economic Research,NBER
http://www.nber.org/
(6)U.S.Bureau of Economic Analysis)
http://www.bea.gov/
(7)Social Science Research Network (SSRN)
(8)The world's major economists policy analysis and comment forum
http://www.voxeu.org/columns/topics
(9)Journal of the American Economic Association Economic Outlook
(10)Levy Institute of Economic Research, paper
http://www.levy.org/vtype.aspx?doctype=13
(11)Hoover Institute
http://www.hoover.org/research/working-papers
5. Financial database
(1)Bloomberg
(2)Wind Information Database
Course requirements and grading:
Grading Policy: Your grade for the course will be calculated as follows:
Regular Homework and Class Participation 30%
Final Exam 70%
Attendance: Regular attendance is an important requirement for successful performance in this course. If a student repeatedly misses classes, question will be raised with the administration and suggest the student withdraws from the course.
Homework problems: problem sets will be assigned regularly. All of the students will get a chance to present your homework solutions in class. At this point, it is not as important to have a correct solution as it is to demonstrate that you have worked on your homework seriously. Please, start looking at problems on right away so that you can ask for help if you need it. In addition to my office hours and email, you can use the homework discussion board on Blackboard for homework help. Your homework problems will help you to understand the material and to systematically prepare for exams. Class participation and homework will count for 20% of your grade.