Concepts: Money supply, monetary policy, open market operations, GDP, commodity money, fiat money
Background: The mastermind of the heist (the “Professor”) argues that the European Central Bank (ECB) “made 171 billion euros out of nowhere” in 2011 and that the public did not call the institution a thief. Instead, the ECB called it “liquidity injection.” The professor also says, “I’m making a liquidity injection, but not for the banks. I’m making it here, in the real economy.” He rips up a banknote, explaining to inspector Raquel Murillo that “it’s nothing, it’s paper.” In Part 3 of the TV show, the professor tried to destabilize the economic system by using an airship to scatter 140 million euros above Madrid, in the form of €50 and €100 notes. The people rushed to gather the bills.
Question 1: What was the intent of the ECB when it created this money? Is it comparable to theft?
Question 2: Can this also stimulate the real economy?
Question 3: Why does the professor consider that these notes are “nothing”?
Concepts: Quantity theory of money, monetary policy, inflation, hyperinflation
Background: In Parts 1 and 2, the robbers invaded the Royal Mint of Spain, taking hostage 67 individuals, with a plan to print and escape with 2.4 billion euros.
Question 1: What are the unintended consequences of running the money-printing press? Why can’t the European central bank print a massive amount of money to stimulate the economy?
Question 2 (Let’s Use Data): Can the professor’s 2.4 billion euros plan create inflation in Europe? Money Heist was released in May 2017. To answer this question, you may use the value of Money Supply M1 for the Eurozone from the FRED website.
Concepts: Asymmetric information, moral hazard, principal-agent problem
Background: Gi-hun meets with his childhood friend Cho Sang-woo who is now wanted for financial crimes. Sang-woo is a former team leader at an investment back. He invested his clients’ money in derivatives and futures options, losing 650 million won. Song-woo later admits that he lost 6 billion won and used family assets as financial collateral.
Question: Cho Sang-woo is not the only “rogue trader” who lost millions of dollars and faced criminal charges. Research three rogue traders who made the news in the past thirty years. Show how it illustrates asymmetric information and the principal-agent problem.
Concepts: Debt financing, equity financing, bond, stock, human capital
Background: Starting a company is costly. Both Hakan and Memo are poor in the series and do not have the necessary funding to create their company. To find the money, Hakan tries to get a well-paid job at a large firm.
Question 1: What are Hakan and Memo’s financing options to make the initial investment?
Question 2: What would Hakan need to increase his chances of getting such a job?
Course Classification: Finance, Money and Banking, Macroeconomics
Concepts: debt financing, budget deficit
Background: Pili and Ioane’s grandfather is about to lose his house to creditors, as he failed to pay his bills. In this clip, Leilani (Pili and Ioane’s mother) discusses her father’s finances. She considers selling her apartment in New York to pay off her father’s debt.
Question: The grandfather is experiencing a budget deficit. Define this term and find other options to help the grandfather keep his house.
Course Classification: Finance, Money and Banking, Labor Economics
Concepts: debt financing, value of debt
Background: During a car ride, Ioane finds out Hana did not submit her application to the prestigious Juilliard School in New York.
Question: In this clip, we learn that Hana cannot afford college tuition, which encourages her to find the lost treasure. Research the most recent tuition fee for a year at the Juilliard School. Should Hana borrow money to pay tuition? Define the value of debt and explain.