Personal and Household Finance: From Learning How to Become Rich, to Designing Public Policies

Financial education is lacking in most countries, developed countries included. The main goal of the course is to develop an integrated framework of household finance for private and public use. Students will learn how to maximize their intertemporal utility given their life-cycle income, how to become rich if they want to pay the price for it, how to save, borrow, and purchase property (and if they should do it at all), and more. In terms of public policy, students should leave the course with a holistic view of wealth and income inequality, how poverty restrict sound financial decision-making and how policies can improve social outcomes by reducing (or increasing!) income inequality.

The first goal of the course is to develop a sound integrated framework for individuals to manage their finances with a long-term horizon in mind (based on the permanent income hypothesis). Such a framework does include learning how to integrate bitcoin and other digital currencies and derivatives in long-term portfolios (although that is not the main focus of the framework). Secondly, we will analyze the impact of credit restrictions and hyperbolic discounting in household financial management in poor and middle-income countries. Finally, we will investigate the role of public policy in improving household financial decisions. Importantly, household finance is stuck in low-value equilibria where people's inability to save and invest efficiently lead to lower productivity growth and value added for all. In this final module, we will explain the determinants of wealth and income inequality and how economic policies can improve social outcomes.

Course leader

Carsten Sørensen - Department of Finance

Target group

This is a bachelor level course. CBS Summer University courses at Copenhagen Business School is open to all and welcomes domestic and international students as well as professionals.

Course aim

Understand intertemporal financial choices for poor and rich people.

Develop long-term financial strategies.

Grasp the fundamentals of pension fund, mortgages, digital currencies and other financial assets for long-term financial planning.

Develop critical perspectives on public policies on household finance in poor and rich countries.

Establish a solid cost/benefit framework for policies related to wealth and income inequality.

Credits info

7.5 EC
This is a 6-week course. You can combine up to two 6-week courses making 15 ECTS in total.
Find more information on our website.

Fee info

DKK 6000: Tuition fee for Open University students (EU/EEA/Swiss citizenship)
DKK 12000: Tuition fee for non-European students.