Economic Analysis I: Firm Market and the Economy

BMAN24431 Economic Analysis I: Firm Market and the Economy 20 Semester 1 Undergraduate Level 2 Mohammad Salehnejad Unit coordinator 1 FHEQ level (Framework for Higher Education Qualifications) ' Middle part of Bachelors ' European Credit Transfer & Accumulation System Rating : 10.0 This course unit provides the essential economic knowledge you need to make informed decisions in today's dynamic business world. It's designed to be both analytically rigorous and highly practical.We will begin by exploring the macroeconomic environment, covering key data, theories of inflation, interest rates, the monetary system, exchange rates (and hedging strategies), and financial crises. We will use core models like AD-AS, IS-LM, and Mundell-Fleming as well as theories of credit cycles to understand economic fluctuations and learn how to use macroeconomic insights to guide firm-level decisions.The course will then shift to microeconomic applications within the firm. You will learn practical techniques for demand forecasting, real-time market analysis, risk assessment, and decision-making under uncertainty. We will explore the fascinating economics of information, including challenges like asymmetric information, signalling, moral hazard, incentives, and principal-agent problems. You will also dive into investment analysis, strategies for competing in complex (oligopoly) markets, and discover what builds corporate resilience.Throughout, our focus is on applying these economic tools and data analysis skills to understand real business cases and current events, preparing you for future challenges. This course unit provides the essential economic knowledge you need to make informed decisions in today's dynamic business world. It's designed to be both analytically rigorous and highly practical.We will begin by exploring the macroeconomic environment, covering key data, theories of inflation, interest rates, the monetary system, exchange rates (and hedging strategies), and financial crises. We will use core models like AD-AS, IS-LM, and Mundell-Fleming as well as theories of credit cycles to understand economic fluctuations and learn how to use macroeconomic insights to guide firm-level decisions.The course will then shift to microeconomic applications within the firm. You will learn practical techniques for demand forecasting, real-time market analysis, risk assessment, and decision-making under uncertainty. We will explore the fascinating economics of information, including challenges like asymmetric information, signalling, moral hazard, incentives, and principal-agent problems. You will also dive into investment analysis, strategies for competing in complex (oligopoly) markets, and discover what builds corporate resilience.Throughout, our focus is on applying these economic tools and data analysis skills to understand real business cases and current events, preparing you for future challenges. This course aims to provide a working knowledge of economic techniques relevant for managing a modern firm. The course demonstrates how a solid knowledge of topics such as demand estimation / forecasting, empirical investment analysis, pricing strategies; non-cooperative game theory; strategic behaviour; advance business strategies, oligopoly markets; economics of information, signalling; moral hazard and incentives; inter-temporal decisions under uncertainty;  auctions and market design help improve corporate decisions. Gaining insights from modern macro: This course provides a coherent understanding of macroeconomic factors and their impact on business activities and firm performance. By bridging theory and practice through a rich mix of academic concepts and real case materials, it equips students with the skills to systematically analyze economic news and use it to optimize corporate decision-making.Notably, equip students with an ability to use Excel (or R - optional) to analyse data in business decision making, use economic theories to make sense of economic data and news, and use their understanding to improve on business decisions and master data-driven business decision making. The course uses a rich mix of theory and practice, with a strong emphasis on applying economic theory to real business decisions to help students develop a capability in understanding a wide variety of business situations from economics to finance, which will prepare them for the future job markets. The ability to analyse complex business situations systematically, design relevant business strategies, and make theoretically sound and evidence-based decisions will provide our students with a critical advantage in the job market. In tutorials students will also have the chance to engage in group discussions, build confidence and enhance their presentation skills.    <ul><li style="text-align:justify;">Interpret macroeconomic data and employ the AD-AS, IS-LM, and Mundell-Fleming models to explain the nature and causes of short-run economic fluctuations.</li><li style="text-align:justify;">Explain and apply contemporary business cycle theories to guide strategic corporate decisions.</li><li style="text-align:justify;">Examine the dynamics of credit cycles and financial crises and apply this understanding to assess risks and strategic responses within firms.</li><li style="text-align:justify;">Analyse firm behaviour using economic theory, focusing on market structure, pricing, and strategic decision-making.</li><li style="text-align:justify;">Apply data analysis to inform business decisions, forecast market trends, and evaluate investment projects.</li><li style="text-align:justify;">Explain how uncertainty and imperfect information impact decision-making and analyse associated principal-agent problems and methods for addressing them within a firm context.</li></ul> <ul><li style="text-align:justify;">Critically evaluate and apply key economic models using data to enhance economic and business analysis</li><li style="text-align:justify;">Analyse the working of the economic system, the interconnectedness of major economies, and the effect of macroeconomic trends on corporate performance.</li><li style="text-align:justify;">Analyse the role of the financial sector in the economy and its influence on business performance.  </li></ul> <ul><li>Employ software such as Excel, R, and generative Gen AI tools for data analysis, hypothesis generation, and decision-making.</li><li>Leverage economic and firm data to inform managerial choices and business decisions.</li></ul> <ul><li style="text-align:justify;">Analyse firm data using software such as Excel and R and utilise real-time data for business decisions.</li><li style="text-align:justify;">Integrate background knowledge, theory, and data to enhance decision-making.</li><li style="text-align:justify;">Communicate economic concepts and business strategies effectively, including presenting data-driven insights and making persuasive arguments. Skills to combine background knowledge, theory and data to improve decision making.</li></ul> Part 1: Macroeconomic Topics1.   Introduction: Macroeconomic data2.   A Basic model: output, unemployment and inflation at a glance3.   The IS-LM model: the economy in the short-run4.   Exchange rate systems5.   The Monetary system, stabilization policy & expectations6.   The Mundell-Fleming Models & Inflation7.   Risk, uncertainty, imperfect information & firm decisions8.   Theories of business cycles and recessions9.   Credit cycles, recessions and business cycles10. Financial crises and credit cycles  11. Theories of international tradePart 2: Microeconomic Topics12. Investment analysis  13. Market analysis: An empirical approach14. Complex markets & advanced business strategies15. Corporate resilience  Methods of delivery: Lecture/seminars /computer aided learningLecture hours: 30 (3 hours per week over 10 weeks) plus 3 hours overall course revisionsSeminar hours: 8 (1 hour per week)5 hours optional extra revision sessions for students needing help with economics.  0 Other 100% Formative Assessment:12 short weekly mock MCQ testsSummative Assessment:1. Mid-term online multiple choice test (20%)2: End of term online multiple choice test (20%)3: Economic Analysis Project (60%)   <ul><li>Prior to the exam during weekly seminars and after marks are released.</li><li>General guidance during revision sessions, individual feedback on outlines, and comments / feedback after marks are released.</li></ul> BMAN10001 Economic Principles : Microeconomics Pre-Requisite Compulsory BMAN24431 has pre-requisites of: BMAN10001. Only available to students on: Mgt/Mgt Specialism; IMABS; IM and ITMB.Pre-requisite course units have to be passed by 40% or above at the first attempt unless a higher percentage is indicated within this course outline. N Weekly chapters from the online textbooks, weekly case studies, prepared for the course, and datasets. Further, the course will draw on relevant research papers including:  <ul><li>All About the Business Cycle: Where Do Recessions Come From? (link)</li><li>Inflation in the Aftermath of Pandemics and Wars (link)</li><li>The Impacts of Higher Interest Rates on UK Firms (link)</li><li>Chaney, T., Sraer, D. and Thesmar, D., 2012. The collateral channel: How real estate shocks affect corporate investment. American Economic Review, 102(6), pp.2381-2409.</li><li>Finance and Economics: Big MacCurrencies,” The Economist, Apr 27th, 2002 </li></ul> Lectures 33 Seminars 8 0 157 Pre-requisites: BMAN10001 Economics Principles: Microeconomics Dependent course units: BMAN31181Economic Analysis II: Corporate Development, Growth & Strategy Programme Restrictions: BSc Management and Management (Specialisms), BSc International Management, Core: BSc ITMB (Strategy & Economics) BMAN24431 is available to study abroad and exchange students admitted through the University of Manchester’s International Programmes OfficeProgrammes:Core: Mgt (IBE)Option: Mgt, IM, ITMB