Master of Financial Economics explained

A Master of Financial Economics is a master's degree focusing [1] on financial economics.[2] The degree provides[3] a rigorous understanding of theoretical finance and the economic framework upon which that theory is based.[4] The degree is postgraduate, and usually incorporates a thesis or research component. Programs may be offered jointly by the business school and the economics department.Closely related degrees [5] include the Master of Finance and Economics[6] and the Master of Economics with a specialization in Finance.[7] Since 2014 undergraduate degrees in the discipline have also been offered.[8]

Structure

Masters in Financial Economics[9] are usually one to one and a half years in duration, and typically include a thesis or research component. The nature of the degree differs by university. Generally, the degree is largely theoretical, and prepares graduates for research positions, for doctoral study in economics, or for roles in applied economics.[10] Some are positioned as professional degrees, preparing graduates for careers[3] [11] in investment banking and finance,[12] [13] and are comparable to the Master of Science in Finance, though with an increased weighting towards economic theory. In some cases, programs are substantially quantitative[14] and are largely akin to a Master of Quantitative Finance.

The curriculum is distributed between theory, applications, and modelling, with the emphasis on each differing by university and program, as outlined.

The programs require a bachelor's degree prior to admission, but do not (usually) require an undergraduate major in finance or economics; a typical requirement is exposure to (multivariable) calculus and differential equations, statistics and probability theory, and linear algebra. Many programs include a review of these topics as an admission- or preliminary course.[17] [21] [18] [22] [23]

Comparison with other qualifications

There is some overlap with programs in financial engineering, computational finance and mathematical finance; see Master of Quantitative Finance (MQF). These degrees aim to train practitioners and "quants" — i.e. specialists in derivatives, fixed income and risk analysis — as opposed to economists, and their curricula are therefore weighted toward stochastic calculus, numerical methods, simulation techniques and programming, and are quantitative (well) beyond the level of the Financial Economics degree. Entrance requirements are similarly more mathematical. On the other hand, coverage of financial and economic theory, and econometrics, while significant, is comparatively secondary.[24] As mentioned, some Financial Economics programs are substantially quantitative; these differ little from the MQF.

The overlap with general finance degrees, such as a Master of Science in Finance (MSF) or an M.B.A. in finance, is further limited, particularly where the Financial Economics program is theory oriented. These degrees are focused on financial management, corporate finance and investment management, and are practice oriented with limited exposure to the underlying economic theory. However, since these courses train graduates in the use of the models developed in Financial Economics, the theory is (sometimes) covered [25] in the context of a (basic) understanding of model assumptions. Similar comments apply to professional certifications such as the Chartered Financial Analyst (CFA) designation. The Master of Finance (M.Fin.) and M.Sc. Finance, as opposed to the MSF, have a significant [25] theory component (as well as quantitative component),[26] and largely overlap with the Masters in Financial Economics.

See also

Notes and References

  1. Sean McClung (2023). Which Concentration Should You Choose For Your Master's Degree in Economics?, INOMICS
  2. Cecilia Seiter (2023). Earning A Master’s In Economics: What To Know. Forbes
  3. Nic Paton (2008). The art of finding a specialism. The Independent
  4. Web site: U of T : Economics : Master of Financial Economics Program (MFE) . Mfe.economics.utoronto.ca . 2010-10-19.
  5. [American Economic Association]
  6. Web site: MSc (Econ) Finance and Economics | School of Economics and Finance, Queen Mary, University of London . Econ.qmul.ac.uk . 2010-10-19 . https://web.archive.org/web/20100306023128/http://www.econ.qmul.ac.uk/postgraduate/msc/financeandeconomics/ . 2010-03-06 . dead .
  7. http://www.businessandeconomics.mq.edu.au/postgraduate_coursework_programs/2011_programs_of_study/MASTER_OF_ECONOMICS_with_a_specialisation_in_FINANCIAL_ECONOMICS_2011.pdf Master of Economics with a specialisation in Financial Economics
  8. e.g.: Kent ; City London; UC Riverside; Leicester; Toronto; UMBC.
  9. https://www.aeaweb.org/resources/students/schools Alphabetical list of US graduate programs in economics
  10. http://business.slu.edu/programs-of-study/graduate-business-programs/ms-in-applied-financial-economics/ MS in Applied Financial Economics
  11. Georgina Torbet (2021). Top Career Paths: Financial Economics, INOMICS
  12. Web site: Economics Department, College of Liberal Arts and Social Sciences, Youngstown State University . As.ysu.edu . 2010-10-19 . https://web.archive.org/web/20111224055215/http://web.ysu.edu/gen/class/Graduate_Program_m51.html . 2011-12-24 . dead .
  13. https://le.ac.uk/courses/financial-economics-msc Financial Economics MSc
  14. Web site: MS in Quantitative Financial Economics . Spears.okstate.edu . 2010-10-19 . https://web.archive.org/web/20090315095354/http://spears.okstate.edu/finance/degrees/msqfe . 2009-03-15 . dead .
  15. https://web.archive.org/web/20110719120650/http://mit.econ.au.dk/vip_htm/akoch/outlineEC5010.pdf Outline for ‘Financial Economics’
  16. See for example: Macroeconomics for Financial Markets, University College Cork; MSc in Financial Economics, Oxford University; MSc in Financial Economics, Cardiff University.
  17. http://www.bbk.ac.uk/study/pg/economics/TMSECFIN.html Birkbeck Financial Economics (MSc)
  18. Web site: MCom (Financial Economics), University of Johannesburg. uj.ac.za. 2010-10-19. https://web.archive.org/web/20141122141204/http://www.uj.ac.za/EN/Faculties/ecofin/economics/coursesandprogrammes/postgraduate/Masters/Pages/MComFinancialEconomics.aspx. 2014-11-22. dead.
  19. Web site: City University, London - Modules: MSc Financial Economics . city.ac.uk. 2010-11-05.
  20. Web site: Financial Economics MSc - University of Glasgow . gla.ac.uk . 2018-01-25 . 2018-01-25.
  21. http://www.socialsciences.manchester.ac.uk/disciplines/economics/postgraduate/psmaths/ Manchester's "Pre-Session" Mathematics & Statistics
  22. https://www.idc.ac.il/en/schools/rris/graduate/Documents/mafe-brochure.pdf MA in Financial Economics, IDC Herzliya
  23. https://www.economics.utoronto.ca/index.php/index/graduate/courseDetails/4282 Mathematics and Statistics for MA and MFE Students
  24. http://www.columbia.edu/cu/senate/archives/resolutions_archives/resolutions/09-10/financial_economics_res.html Resolution to Establish a Program Leading to the Master of Science In Financial Economics
  25. https://www.usnews.com/education/best-graduate-schools/top-business-schools/articles/2015/02/09/determine-if-a-masters-in-finance-is-the-right-move Determine If a Master's in Finance Is the Right Move
  26. Web site: Master in Finance - Bendheim Center for Finance - Princeton University . Princeton.edu . 2018-01-25 . 2018-01-25.