Welfare economics and market equilibrium with perfect competition in all markets, incomplete competition in the market for one good, risk and asymmetric information, property rights and external effects

The course provides an overview about functions of the financial sector and finance, activities of banks, regulation of the financial sector, development and overcoming of financial crises, depression and deflation, high inflation, as well as inflation fight by monetary policy.

Money and its functions, goals of monetary policy, central bank functions, theories of money supply and demand, theories of the term structure of interest rates, transmission mechanismes of monetary policy, discretionary vs. rule-based monetary policy, indicators and instruments of monetary policy,organization and monetary policy of the ECB, theory of optimum currency areas and the European Monetary Union.

Oligopoly theory: quantitiy competition and price competition in homogeneous markets, product differentiation, monopolistic competition, determinants of market structure, collusion; the structure-conduct-performance paradigm, Chicago School versus Harvard School, competition and economies of scale, competition and technological change, motives and effects of mergers, antitrust policy; privatization policy.

Theory of financial intermediation, delegated monitoring by banks, liquidity insurance and the risk of bank runs, theories of credit rationing and relationship lending, portfolio theory of bank behavior, industrial organization of banking markets, banking market structure, efficiency and innovations, regulation of banks.