Personal Finance: Making Better Decisions and Building a Better Financial System

ECON 70 Subject & Catalog Number

Description

People face a daunting array of problems in managing their financial lives.  Taking out student loans, managing bank accounts and credit cards, financing a home purchase with a mortgage, and saving for retirement are all major challenges.  There is evidence that many people lack the skills they need to meet these challenges.  This course has three goals.  The first objective is to give participants a basic grounding in financial literacy: principles of finance that we can use in our own lives.  The second objective is to introduce research on the ways in which households use the financial system, emphasizing common financial mistakes and financial products that seem prone to misuse.  We will learn to read papers from the academic economics literature, focusing on the papers’ central ideas and empirical findings.  The third objective is to explore ways in which the financial system can be improved to make it easier and safer to use.  We will discuss the role of financial advisers, technological solutions (“fintech”), and public policy interventions including disclosures, default choices (“nudges”), and regulations restricting access to financial products.  

The course has no prerequisites.