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Michael Stoff, Director 305 East 23rd St, CLA 2.102, (G3600) Austin, TX 78712-1250 • 512-471-1442

Spring 2006

T C 357 • Financial Markets in Latin America

Unique Days Time Location Instructor
42650 M
2:00 PM-5:00 PM
CBA 4.338
Brandl

Course Description

Recently the United Nations estimated the population of Latin America and the Caribbean to be 534 million people. The region's population is growing at an annual rate of 1.46%. As UNFPA (United Nations Population Fund) pointed out: "The region's economy has not kept pace with population growth in the past few years, and development needs remain pressing." This lack of economic growth is critically important for people of the region because, as the UNFPA explained, access to reproductive health information and services in the region is closely tied to income. With a regional GDP per capita of about $2800 in 2004 (compared to $40,100 in the U.S.) a lack of economic growth in the region negatively impacts health conditions, education levels, political stability, and the general welfare of the people in the region. This course examines one of the main contributors to economic growth: financial market development. The role of financial market development in economic growth remains controversial. For decades economists assumed financial markets develop after economic growth takes place. More recently economists have come to believe financial market development is an important necessary condition for economic development to take place. Just as economists have come to the realization of the important role financial market development can play in helping poorer nations, there has been a political backlash against financial market development of poorer nations. The anti-globalization movement has called for the stopping of financial market development in places like Latin America. It is within this context that we will examine the financial markets in Latin America. We will examine the inner workings of financial markets to see how they can play a role in creating a better life for the people of Latin America. We will also examine the financial market failures that have gripped the region over the last two decades. Finally students will examine and offer their input on suggested reforms of the financial markets in the region. NB: the course assumes no prior training in the field of finance or accounting.


About the Professor Dr. Michael Brandl is a Lecturer in the Finance Department in the McCombs School of Business, where he teaches MBA and Executive MBA courses in economics and financial markets. After receiving his Ph.D. from the University of Houston, he taught in the Texas A&M system prior to joining the University of Texas. Dr. Brandl is also an Affiliated Faculty member at UT's Teresa Lozano Long Institute of Latin American Studies and is a guest lecturer at UT's LBJ School of Public Policy. He is currently working on economic development projects in Bolivia, Argentina, Brazil, and India, as well as East Austin and the 3rd Ward in Houston. His work centers around the role private equity markets can play in encouraging economic development in these various economically depressed areas.

Grading Policy

There will be an in-class, closed notes mid-term exam and a closed notes final exam. In addition students will prepare and present a written report at the end of the semester and are expected to engage in class discussions/debates. Mid-term exam: 30% Final exam: 40% Written/oral report: 20% Class participation: 10%

Texts

Wolf, Martin (2004), Why Globalization Works Isard, Peter (2005), Globalization and the International Financial System Inter-American Development Bank (2005), Unlocking Credit Narayanan, M.P. and Vikram K. Nanda (2004), Finance for Strategic Decision Making Beim, David O. and Charles Calomiris (2001), Emerging Financial Markets

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