ECON 438 - Seminar: Market Failure in Financial Markets

Semester Offered: Second Semester
Credits (Range): 3 Hours
Attribute: 3 SS, WR

The seminar will examine the theoretical framework used by economist to understand many financial phenomena such as credit rationing, bank runs and panics, and solvency problems. Market failure, a situation where market equilibria fail to be Pareto optimal, often occurs when asymmetric information, market power, externalities, and/or public goods are present. Market failure explains why financial intermediaries exist and provides an economically defensible justification for financial markets regulation. Enrollment limit: 10.
Instructor: A. Ortiz Bolanos
Prerequisites & Notes
ECON 253 (Intermediate Microeconomics) is required. ECON 211 (Money, the Financial System and the Economy) and/or ECON 313 (Games and Strategy in Economics) are also highly recommended.