Hi, I'm Peter Navarro.

And I'd like to welcome you to Macroeconomics for Managers with Business Applications.

Let me start our journey together with this key insight,

which I've learned from over 20 years of

experience teaching at one of the top business schools in the world.

Whether you're getting an undergraduate degree in business,

or an MBA, you should be taught how to do two things very well.

You should be taught how to manage companies,

and you should be taught how to manage money and investment portfolios.

And in both cases, a solid foundation in the principles of macroeconomics is

critical to profits and success.

In terms of learning how to profitably manage companies,

one of the key lessons you will learn in this macroeconomics course,

is that a recession can be far more damaging to

your company's bottom line than any 10 competitors.

That's why in this course,

I will teach you how to use so-called,

leading economic indicators to forecast the business cycle.

If you learn how to forecast the business cycle,

you won't be caught by surprise by recession,

and you will be able to take better advantage of any new economic expansion.

Even more important, once you master the basics of economic forecasting,

we will also show you how to think strategically about

managing actual movements in the business cycle,

from economic expansion, to recession,

and back to expansion.

For example, on the strategic business cycle management front,

the knee-jerk reaction of many corporate executives during the middle of a recession is,

to cut back sharply on both advertising expenditures,

and the hiring of new personnel.

However, in many cases this is exactly the wrong business cycle management strategy.

Take the case of advertising.

Recession is actually a great time not to slash advertising expenditures,

but rather to increase such expenditures to both build your company brand,

and maintain reasonable sales levels in a softening market.

As for hiring new talent,

recessions are actually a great time to cherry

pick top talent from a deepening pool of labor,

as often desperate companies get rid of some of their best and brightest employees.

This hire, don't fire strategy can net your company some top talent at reasonable wages.

Now, what about managing money,

and investment portfolios that contain not just stocks,

and bonds, but perhaps assets like real estate.

Here, a solid foundation in

macroeconomic principles can be equally important and profitable.

One very key point here,

is that both the bond and stock markets are what economists call,

leading indicators of the economy and related movements in the business cycle.

For example, if an upward trending bullish stock market reaches a turning point,

and begins to move into a sustained and bearish downward trend,

that is a strong signal that a recession may be coming.

In a similar fashion,

if the bond market yield curve,

which depicts the relationship between short and long term government bond yields,

begins to flatten or even to invert,

that can likewise signal a possible recession ahead.

Now, here's another key point.

If you as a money manager,

or investment advisor clearly understand

the complex relationships that exist between the macro economy,

and the prices of assets like stocks,

bonds, and real estate,

and if you were also able to forecast the economy,

you will be able to make much better decisions about

the investment portfolios you construct for your clients.

For example, if your macroeconomic forecast predicts recession,

that may be a good time to move some of

your investment funds out of the stock market into cash,

or into the bond market,

which tends to move in the opposite direction of the stock market.

Of course, that kind of market timing is not what they

teach in traditional finance courses in business schools,

where you are more often taught to buy in whole.

However, modern money managers clearly understand

the importance both of improved market timing,

as well as the even more critical hedging and leveraging a business cycle risk.

So here is my bottom line as we start out this journey together.

This course in macroeconomics should be of immense value

to you whether your career path involves managing companies,

managing investment portfolios, or simply managing

your own personal finances.

The topics we will cover in this course,

will necessarily include the standard list of

problems analyzed in every macroeconomics principles course.

For example, inflation, unemployment,

economic growth, budget deficits, and trade imbalances.

Of course, we will also look very carefully at what is

in the toolbox of macro economists to fix such problems.

With such tools ranging from monetary, fiscal,

and tax policies to trade and regulatory reform.

But in this course you will also learn the basics of economic forecasting,

along with a set of business cycle management strategies,

that may be applied by business executives,

and money managers over the course of

the ups and downs of the business cycle and economy.

And that's why this course is so appropriate for students interested in

actually using economics in the real world of business and finance.

Hey, what a concept.

An education you can immediately put to work,

and one that might even help you find your first or next job.

So good luck in this endeavor.

I'm sure, that if you put in the time and effort to master the material in this course,

you will be paid back many times over on your investment.

Now, one last thing before you move on to lesson one in this course.

A few minutes now to jot down for your own personal review,

about what you expect to gain by taking this course.

Is it just for course credit,

or are you interested in managing a company?

Or perhaps starting your own company,

or perhaps you may be interested in managing investment portfolios for clients.

Or perhaps just managing your own finances better.

Do take a few minutes on this exercise before moving on.

From The Merage School of Business of the University of California,

Irvine, I'm Peter Navarro.

Macroeconomics: Introduction to the Power of Macroeconomics

Strategic Business Management - Macroeconomics

Meet the Instructors