Strategy and Advanced Macroeconomic Indicators

Professor: Julien Moussavi, Beyond Ratings.

Objective: The aim of this course is to mobilize knowledge about economic and financial developments. The concepts will focus on growth, inflation, employment, hard and soft data, the economic cycle or the different economic actors.

Outline:

1. How to use the right indicators to assess economic growth, inflation and employment?

• The different measures of economic growth (slippage, annual average, etc.) ;
• Different smoothing techniques (seasonality, basic effect, etc.) ;
• The different measures of inflation (general, underlying, constant tax, etc.) ;
• Key concepts of the labor market (unemployment, employment, participation, etc.).

2. What are the economic indicators to follow in the short term?

• The various economic indicators (hard vs soft data) ;
• Signals to analyze from the financial markets (interest rate curves, equities, stress measures)
• Signals to analyze from the labor market (United States, euro area)
• Brief overview of economic surprise indicators (consensus, CESI)

3. How to analyze the reactions of the different economic actors according to the economic cycle?

• Overview of the different business cycles (Kondratiev, Juglar, Kitchin)
• The balance between supply and demand (short and long term)
• The different currents of economic thought (Classic, Keynesian, Monetarist)
• The reactions of the different economic actors (government, non-financial enterprises, households, banking sector, etc.).

 Prerequisites: Concepts addressed in the first two levels of Macroeconomics teaching. Concepts of statistics are also needed to understand the different publications of economic and financial data in the short and medium term. Lastly, a certain economic and financial culture is necessary in order to understand the conjunctural economic evolutions.

 Bibliography:

• Economic and financial press (Financial Times, Les Echos, etc.) ;
• BENASSY-QUERE, A., COEURE, B., JACQUET ; P., & J. PISANY-FERRT, 2017, Politique Economique, 4 édition, De Boeck Université ;
• BLANCHARD, O., COHEN D. & JOHNSON, D., 2014, Macroéconomie, Pearson ;
• ECB, Various, Financial Stablity Report ;
• IMF, Various, Global Financial Stability Report ;
• KING, M., 2017, The End of Alchemy: Money, Banking, and the Future of the Global Economy, W. W. Norton & Company.