BUS327 Financial Crisis: History and Theory

Credits (ECTS):5

Course responsible:Espen Ekberg

Campus / Online:Taught campus Ås

Teaching language:Engelsk

Course frequency:Annually

Nominal workload:125 hours

Teaching and exam period:This course starts in Spring parallel 2020. This course has teaching/evaluation in Spring parallel.

About this course

This course explores financial crises from a historical and theoretical perspective. According to an estimate from the International Monetary Fund (IMF), between 1970 and 2011 alone the world experienced no less 147 systemic banking crises, 218 currency crises and 66 sovereign debt crises. Such financial crises often have devastating effects on the operation of the general economy: they cause decline in investment spending, reductions in business profits, and an increase the number of bankruptcies.

What are the fundamental characteristics of financial crises and why do they appear so frequently? How do the various institutions of the financial system function and what are their roles in the development and handling of financial crises? What are the main theories of the causes of financial crises and what are their main strengths and weaknesses? How have existing crises been solved historically and what can be done to prevent them in the future? These are some of the questions we ask, discuss, and try to answer in this course. As the students will experience, many different and often competing theories exist about the causes and effects of financial crisis and how to deal with them. This course provides an overview of these approaches. In addition, it introduces the students to a number of historical case studies of financial bubbles, crashes and crises. The idea is that by investigating past experiences of financial crises we can recognize patterns in how the crises evolved and also evaluate how they were handled. Such historical knowledge may in turn help shed light on how to deal with and assessing future risks of crisis in the economy and how to deal with such crisis.

Besides regular lectures and group work the teaching of this class will be conducted through the systematic use of writing exercises. The students will be asked to hand in two written assignments during the semester. These make up a major basis for the final exam, which will consist of an academic essay presenting and discussing major concepts, theories and historical cases of financial crises.

The course will thus provide the students both with knowledge about a fundamental part of the market economy (the financial sector) and how and why this sector historically has experienced repeated and severe crises, and improve their skills in writing analytical texts. This skill does not only represent a valuable preparation for writing the bachelor thesis, but is also fundamental to any job attainable for a graduated business school student

Learning outcome

Knowledge - during the course, students shall acquire:

  • Knowledge about fundamental concepts (such as money and debt), about financial institutions (such as banks, central banks and regulatory authorities) and about the larger international financial system in which the financial sector is situated and how this system has evolved historically.
  • In-debt knowledge about various theories of financial crises.
  • In-debt knowledge about historical cases and historical explanations of financial crisis.
  • Basic knowledge about how to plan, structure and write an analytical text.

Skills - after completed the course, students should be able to:

  • Critically and systematically present and discuss concepts and institutions central to the understanding of the financial system and financial crises and to present their analysis in writing.
  • Distinguish between and critically examine different theories and historical explanations of financial crises, and to present their analysis in writing.
  • Examine historical cases of financial crisis by applying relevant concepts, theories and historical explanations and to present their analysis in writing.
  • Reflect on how theories of social phenomena - such as financial crises - are constructed, contested and developed, including how differences in methodological approach may affect our understanding of social processes.
  • Reflect on the distinction between theories and historical explanations of social phenomena.
  • Reflect on the value of historical knowledge for the understanding of present day problems.
  • The course consists of lectures, discussion groups, presentations, class discussions, writing exercises, written assignments and student peer review. The students should bring their laptops (or other writing instrument) to every lecture
  • Individual and general feedback from lecturer on written assignments. Student peer-review of written assignments.
  • Combined assessment, consisting of

    1. Term paper/essay (70 % of final grade), grade A - F

    2. Written exam with short answers, 90 minutes (30 % of final grade), grade A-F.

    Both assessment components need to be passed in order to pass the course. There will not be any retake exam in the course. Those that wish to take the course again must do so next time the course is arranged, including all the elements in the assessment.

    Both the paper and the written exam has to be in english.

  • External examiner will control the quality of syllabus, questions for the final examination, and principles for the assessment of the examination answers.
  • Two written assignments have to be handed in during the semester. In addition, the student has to peer-review two papers from fellow students. The assignments and peer reviews must be solved individually and will not be graded. The assignments make up a substantial part of the final term paper.
  • The course is in English. Incoming students can contact student advisors at the School of Economics and Business (studieveileder-hh@nmbu.no) for admission to the course.
  • The course is open to all master programmes at NMBU and 3rd year bachelor students enrolled in the bachelor program in Business Administration and bachelor program in Economics.