Search
Search type

School of Social Sciences

Students outside a lecture theatre at The University of Manchester
BAEcon Economics
Learn how the social sciences can help you to understand today's world.

BAEcon Economics

Year of entry: 2018

Course unit details:
Understanding Financial Crises: Competing Perspectives

Unit code BMAN24091
Credit rating 20
Unit level Level 2
Teaching period(s) Semester 1
Offered by Alliance Manchester Business School
Available as a free choice unit? No

Overview

The collapse of Lehman Brothers bank in September 2008 marked the beginning of one of the deepest global financial crises in modern times. Banks collapsed as credit markets froze and financial assets lost their value. Governments and central banks intervened, pouring money into the banking system in an attempt to stave off a complete collapse of the core global financial system. Meanwhile the real economy stalled in many major economies as governments introduced austerity budgets, leading to a collapse in investment, unemployment, wage cuts and recession.

The global scale and depth of the 2008 crisis has rekindled academic interest in the causes and characteristics of financial crisis more broadly. This course seeks to introduce the competing explanations for this and other historic financial crises. It does so in three sections.

A first suite of three lectures provides an account of our current crisis set within a broader historical context (Theme A). The lectures open with an introduction, which provides a historical outline of this and previous crises. It also explains basic terms like ‘liability’ and ‘asset’ and their implications. It then provides a preliminary overview of the two key phases of the current crisis: the US sub-prime crisis, which illustrates the dangers of financial innovation and the Eurozone sovereign debt crisis which illustrates the larger problem of bank/state interconnectedness.

A second suite of five lectures then addresses the issue of ‘causes’, outlining the different and often competing explanations as to why the current crisis happened and why they recur historically (Theme B). This will summarise the main contributions of Neo-Classical/Mainstream authors as well as those of Keynesians, Marxists, Callonians and feminist critiques of biologically essentialist accounts.

A third and final suite of three lectures provides a reflective conclusion which asks: ‘where to now?’.A first lecture will draw on Schumpeterian theory about creative destruction and Kondratiev wave theory to think about the current financial crisis from the long view, and whether this kind of rupture is normal and to be expected. A second will consider new forms of financial innovation post-crisis. A third and final lecture will discuss the emergence of new financial practices in non-financial firms, and the implication of these developments for traditional theories of the firm.

Pre/co-requisites

BMAN24091 is only available as option courses to IBFE, BA (Econ & SS) Economics, PPE, BA (Econ & SS) Economics & Politics and BEconSc students.

Aims

This course aims to:

• Introduce the basic features of the subprime and Eurozone crises

• Explain the significance of debt in contemporary society and its role in the crisis

• Outline competing explanations of the current crisis

• Encourage critical reflection on the sustainability of finance in its current form

Learning outcomes

By the end of the course unit students should be able to:

• Understand the basic features of the subprime and Eurozone crises

• Understand what a liability is and explain how and why liabilities relative to GDP have grown in the last 30 years.

• Critically evaluate the different explanations of the current crisis.

• Demonstrate an ability to carry out independent research on the challenges that confront finance and that finance poses to us

Learning outcomes

By the end of the course unit students should be able to:
• Understand the basic features of the subprime and Eurozone crises
• Understand what a liability is and explain how and why liabilities relative to GDP have grown in the last 30 years.
• Critically evaluate the different explanations of the current crisis.
• Demonstrate an ability to carry out independent research  on the challenges that confront finance and that finance poses to us
 

Syllabus

THEME A: FINANCIAL CRISES IN HISTORICAL PERSPECTIVE

Lecture 1: Introduction: A History Of Debt, Financialization And Crisis (Adam Leaver, AMBS).

Lecture 2: The Sub-Prime Crisis: the role of financial innovation (Adam Leaver, AMBS)

Lecture 3: The Eurozone Crisis, Austerity & Secular Stagnation: (Adam Leaver, AMBS)

THEME B: DIFFERENT PERSPECTIVES ON THE CAUSES OF CRISIS

Lecture 4: The Mainstream/Neo-Classical Perspective: Crisis as exogenous shock (Adam Leaver, AMBS)

Lecture 5: The Keynesian/Post-Keynesian Perspective: Market inefficiencies/instabilities and the endogeneity of crisis (Adam Leaver, AMBS)

Lecture 6: The Marxist Perspective: Crisis and the internal contradictions of capital accumulation (Adam Leaver, AMBS)

Lecture 7: The Social Studies Of Finance Perspective: Knowledge, technology and the problem of institutional silos (Adam Leaver, AMBS)

Lecture 8: Gender and Financial Crises: From ’too much testosterone’ to ’gender as myth’ (Adrienne Roberts, Politics)

THEME C: REFLECTIONS ON THE FALLOUT: WHERE TO NOW?

Lecture 9: The Long View: Creative Destruction and Long Wave Economic Cycles (Kieron Flanagan/Hugh Cameron, AMBS)

Lecture 10: Conclusion (1): Financial Innovation in Retrospect & Prospect (Adam Leaver, AMBS)

Lecture 11: Conclusion (2): Towards A Theory of the Financialized Firm (Adam Leaver, AMBS).

Teaching and learning methods

In terms of teaching, this course aims to draw on the expertise of academics across the Faculty of Humanities. It will be taught through 11 x 3 hour lectures and supported by 6 x 1 hour seminars. The contributions of different lecturers and their departmental base are outlined in the lecture plan above. GTAs will be used to run the 6 seminars.

We recognise that we will be teaching a non-specialist audience and we will take time to explain basic concepts, before elaborating in each 3 hour lecture. For example, the discussions of each perspective in Theme B will be prefaced with a 10-15 minute introduction to the key concepts of each approach.

Total study hours: 200 hours split between lectures, classes, self-study and preparation for classes, coursework and examinations.

Employability skills

Other
The course also introduces students to non-mainstream economic ideas. Increasingly knowledge of these alternative ideas are demanded by potential employers: for example the Government Economic Service which is the gateway for fast stream economists at the Treasury now explicitly demands knowledge of alternative economic ideas, as well as having an understanding of the crisis (see here: http://www.civilservice.gov.uk/networks/ges).

Assessment methods

Formative assessment = feedback session in seminar 6

Summative assessment = 100% Coursework: The course will be assessed via a 4,000 word assessed essay, with students given five questions from which they must choose one.

Feedback methods

Seminar 6 will provide feedback to students on their chosen essay topics. Students will also receive written feedback on their summative assessment.

Recommended reading

CORE

  • Engelen, E. et al (2011) ‘After The Great Complacence’, Oxford University Press

SUPPLEMENTARY

  • Prügl, E. (2012) "'If Lehman Brothers Had Been Lehman Sisters…": Gender and Myth in the Aftermath of the Financial Crisis." International Political Sociology 6 (1) (2012): 21-35.
  • MacKenzie, D. (2011) ‘The Credit Crisis as a Problem in the Sociology of Knowledge’, American Journal of Sociology, Vol. 116, No. 6 (May 2011), pp. 1778-1841
  • Dowd, K. (2011) Moral Hazard And The Financial Crisis
  • Lavoie (2011) The Global Financial Crisis: Methodological Reflections
  • Lewis, M (2011) The Big Short, Penguin Books

Other media

  • Harvey, D. ‘Crises Of Capitalism’, Lecture, Youtube  http://www.youtube.com/watch?v=qOP2V_np2c0

Reading lists will be provided and the course will be supported in the usual way via Blackboard

Study hours

Scheduled activity hours
Lectures 33
Seminars 6
Independent study hours
Independent study 161

Teaching staff

Staff member Role
Adam Leaver Unit coordinator

Additional notes

Pre-requisites: N/A

Co-requisites: N/A

Dependent course units: N/A

Programme Restrictions: BMAN24091 is only available as option courses to IBFE, BA (Econ & SS) Economics,  BA (Econ &SS) Politics, Philosophy and Economics  and BA (Econ & SS) Economics & Politics, BEconSci,  BA Modern History with Economics.

Timetable
https://ughandbook.portals.mbs.ac.uk/Myprogramme/Teachingtimetables.aspx

For Academic Year 2017/18

Updated: March 2017

Approved by: March UG Committee

Return to course details