The relationship between inflation and asset prices is one of the most critical and complex dynamics in modern macroeconomics. While moderate, stable inflation can support asset valuations by encouraging investment and discouraging cash holdings, a sudden or sustained inflationary surge can fundamentally alter the way investors price risk and value future cash flows. This can lead to a misallocation of capital, the formation of asset bubbles, and a subsequent build-up of systemic risk. The interconnectedness of financial markets means a sharp correction in one asset class can quickly spill over, threatening broader financial stability.

This program provides a comprehensive and practical guide to the intricate links between macroeconomic policy, inflation dynamics, and the pricing of financial assets. Participants will gain a deep understanding of the channels through which inflation is transmitted to asset markets—from equities and real estate to cryptocurrencies and commodities. The course will address the challenges faced by central banks and regulators in simultaneously achieving both price stability and financial stability, exploring the use of monetary policy and macroprudential tools. By focusing on real-world case studies of past bubbles and crises, attendees will be equipped to analyze, anticipate, and mitigate the risks posed by this critical nexus.

Duration: 10 days

Target Audience:

• Central Bank Officials
• Financial Regulators
• Portfolio Managers and Investment Analysts
• Risk Management Professionals
• Macroeconomic Researchers
• Financial Stability Experts
• Government and Treasury Officials
• Economists in International Institutions
• Academics and Graduate Students
• Corporate Treasurers

Objectives:

• Master the core theoretical links between inflation and asset valuation.
• Learn to identify and analyze the drivers of asset price bubbles.
• Understand the channels through which monetary policy affects asset markets.
• Grasp the complexities of the monetary policy vs. macroprudential policy debate.
• Develop proficiency in modeling the risk of financial instability.
• Explore best practices for monitoring systemic risk.
• Learn about robust methods for stress-testing a financial system.
• Identify the critical legal and governance frameworks for financial regulation.
• Develop skills in translating macroeconomic analysis into actionable policy.
• Formulate strategies for building a more resilient financial system.

Course Modules:

Module 1: Foundations of Asset Valuation

• The role of a "clear and focused research question"
• The discounted cash flow (DCF) model
• The impact of inflation on discount rates and cash flows
• The difference between nominal and real returns
• The importance of a "risk and mitigation" plan

Module 2: Inflation and Equity Prices

• The impact of inflation on corporate profitability and earnings
• The role of a simple scorecard and a dashboard
• The use of a "data story map"
• The effect on different sectors and industries
• The challenges of an overvalued market

Module 3: Inflation and Real Estate

• The use of real estate as a hedge against inflation
• The importance of a "clear and consistent reporting style"
• The impact of inflation on housing prices and rents
• The role of a program's theory of change
• The impact on mortgage rates and credit

Module 4: Inflation and Bond Markets

• The relationship between inflation and bond yields
• The importance of a "stakeholder analysis"
• The use of inflation-linked bonds
• The role of a clear and compelling KPI
• The challenges of an inverted yield curve

Module 5: The Role of Credit Cycles

• The link between asset prices and credit cycles
• The importance of a "risk and mitigation" plan
• The concept of a "credit bubble"
• The use of a simple scorecard and a dashboard
• The role of a "data story map"

Module 6: Monetary Policy and Asset Prices

• The channels through which monetary policy affects asset prices
• The use of a "clear and consistent reporting style"
• The challenges of a "moral hazard"
• The role of a program's theory of change
• The importance of a "stakeholder analysis"

Module 7: Macroprudential Policy

• The tools of macroprudential policy (e.g., LTV ratios)
• The role of a clear and compelling KPI
• The debate over its effectiveness
• The challenges of political interference
• The importance of a "clear and focused research question"

Module 8: Systemic Risk Monitoring

• The definition of systemic risk
• The importance of a "risk and mitigation" plan
• The use of network analysis and stress testing
• The role of a simple scorecard and a dashboard
• The identification of "too big to fail" institutions

Module 9: Bubbles and Crises

• The anatomy of a financial bubble
• The importance of a "data story map"
• The lessons from past crises (e.g., 2008)
• The use of a "clear and consistent reporting style"
• The role of a program's theory of change

Module 10: Financial Stability Risks

• The impact of cryptocurrencies on financial stability
• The importance of a "stakeholder analysis"
• The role of a clear and compelling KPI
• The challenges of a "shadow banking" system
• The role of a "clear and focused research question"

Module 11: Case Studies

• Case study: The impact of a stock market crash on the economy
• The use of a "risk and mitigation" plan
• The role of a simple scorecard and a dashboard
• The importance of a "data story map"
• The lessons from the 1997 Asian financial crisis

Module 12: The Role of a "Clear and Consistent Reporting Style"

• The use of a program's theory of change
• The importance of a "stakeholder analysis"
• The role of a clear and compelling KPI
• The importance of a "clear and focused research question"
• The role of a "risk and mitigation" plan

Module 13: Data and Technology

• The use of high-frequency data for monitoring
• The use of a simple scorecard and a dashboard
• The role of machine learning in risk analysis
• The importance of a "data story map"
• The role of a "clear and consistent reporting style"

Module 14: The Future of Finance

• The role of central bank digital currencies (CBDCs)
• The importance of a program's theory of change
• The impact of a "stakeholder analysis"
• The use of a clear and compelling KPI
• The challenges of a decentralized financial system

Module 15: The Role of a "Clear and Focused Research Question"

• The use of a "risk and mitigation" plan
• The use of a simple scorecard and a dashboard
• The importance of a "data story map"
• The role of a "clear and consistent reporting style"
• The use of a program's theory of change

Training Approach

This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.

Tailor-Made Course

This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Training Venue

The training will be held at our Skills for Africa Training Institute Training Centre. We also offer training for a group at requested location all over the world. The course fee covers the course tuition, training materials, two break refreshments, and buffet lunch.

Visa application, travel expenses, airport transfers, dinners, accommodation, insurance, and other personal expenses are catered by the participant

Certification

Participants will be issued with Skills for Africa Training Institute certificate upon completion of this course.

Airport Pickup and Accommodation

Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: info@skillsforafrica.org, training@skillsforafrica.org  Tel: +254 702 249 449

Terms of Payment: Unless otherwise agreed between the two parties’ payment of the course fee should be done 10 working days before commencement of the training.