Department of Economics

Johannes Kepler University

Subjects

Subject a: Applied Economics

This module teaches, discusses and evaluates the application of theoretical approaches and basic methods of economic analysis - based on the core competences I and II.A of Economics - in various areas of economic life (i.e. public sector, healthcare, market positioning of companies, business cycles and employment). In addition, the module discusses institutional and actual problems of these areas of economic life.

Subject b: Firms and Markets

Managers of firms constantly have to take economic decisions. These range from the introduction of a new product on the market and price-setting policy till human resource management and international marketing. In taking these decisions, the firm can not operate in isolation from the market structure and the international conditions. Although every decision has a firm specific component, it is nevertheless useful to elucidate general guidelines. A sound knowledge of its own market position, of the possibilities to operate in a given market, as well as the long-term development prospects of a firm/product is of crucial importance. Strategic considerations - as they are derived from game theory - are useful when taking decisions about entry on a market, about price setting in an oligopolistic market structure and about differentiating a product on the market.

Since business decisions are related to the future, there is always uncertainty and risk. What are the consequences of this? How do firms behave in markets which are characterized by incorrect or incomplete information? In what sense are new economy (information and communication technology) markets distinct from other "traditional" markets and what are the implications for corporate strategy and pricing decisions of this? Often, contracts are concluded between individuals, which are difficult to control and use. How can incentive and coordination problems in this setting be taken into account adequately? In Personnel Economics fundamental questions of recruitment, remuneration and work organization are discussed from an economic perspective.

Subject c: International Economics, Financial Markets and Macroeconomics

Financial markets transform savings into investments. Savers will find profitable investment opportunities in these markets, whereas investing firms will find the necessary funding. Nowadays financial markets are more complex than they were 20 years ago. They are among the most fascinating and enigmatic elements of modern economic life. The share of national income that is earned in financial services firms has increased substantially. Particularly striking is the importance of stock markets in Europe, which could not be imagined some years ago. However, financial markets do not function at all times and everywhere equally well, they are hardly ever perfect. The functioning of financial markets not only determines the fate of individual investors and companies, it is also of great importance for the growth and welfare prospects of entire economies. An outstanding feature of the development of the past 20 years is the international integration of financial markets. International capital mobility is the dominant element of economic globalization with great regularity in the crossfire of fierce criticism. On the one hand, the possibility of investment in foreign currencies is usually attractive from the perspective of the individual investor, but it leads on the other hand to additional risks, not only for the individual but also for national economies as a whole. International capital mobility is a factor of massive importance in the economic policies of individual countries and it is a key element in shaping international monetary relations.

This module gives an overview of the actors involved in the financial markets, the products supplied (equities, bonds,..) and their valuation. The course addresses the possible causes of bad functioning financial markets and how this can be improved by economic policy measures (banking, securities regulatory bodies,..). It will be explained how the international mobility of capital is related to other elements of economic life (balance of payments, domestic economic cycle), and what this means for the conduct of international monetary relations. The financial market participants would probably be willing to pay significant sums for a reliable forecast of future exchange rates. What is the particular importance of exchange rates for financial market players? Can one make any serious forecasts about exchange rate markets? These are further questions that are addressed in the courses of this module.

Subject d: Economic Theories and Methods

Economic methods are nowadays applied to a broad variety of questions. The variety of applications should not distract attention from the basic methodological framework of this module. Like any other science, economics has a broad set of theoretical and empirical tools at its disposal, which provides the basic toolkit to analyse a wide variety of problems, even if the substantive relationships vary from case to case. Learning these tools is the main concern of the module Economic Theory and Methods. The module consists of three courses of 6ECTS, "Microeconomic theory", "Macroeconomic Theory" and "Econometrics I".

Both theory courses are not concerned with a specific field of application, like the courses in the other modules. Rather, the students learn at a very fundamental way, how economics as a science approaches questions. In addition, students learn the fundamentals of mathematical methods, without which modern economy theory is no longer conceivable. These methods can only be discussed rudimentary in this module. Microeconomic theory deals on a more advanced level with theoretical models that attempt to explain, for example, the optimal behavior of market participants under asymmetric information and under uncertainty. In the course Macro-economic theory students will gain an insight into different theoretical approaches to explain patterns of macroeconomic development, which are the basis of the current macro-economic discourse.

In the course "Econometrics I", the students will learn about the modern methodological foundations of econometrics based on the basic knowledge acquired in the course "Empirical Research in Economics," which is an indispensable part of modern Economics. Economics as a science tries to find regularities in the behavior of firms, households, individuals, governments, etc. to derive recommendations from these regularities. The field of economics, which deals with the methods of empirical studies (to test theoretical models), is called econometrics. Econometrics deals with statistical models, the best design of empirical studies and the interpretation of empirical results. Teaching in econometrics at our Institute gives you a solid methodological training offered on an international level. In the course you will learn theoretical models and apply them to practical examples.

Ø  A detailed overview of the exact structure of the different majors (including ECTS-scale and initial conditions and hours) is available here

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