What is Financial Economics?
Financial Economics is a specific field of economics that involves the application of economic principles to financial markets, corporations, banks, and central banking policies. In general, financial economics is the study of choices consumers, business managers, and government officials make to attain their goals given that they have limited or scarce resources. Like the broader area of economics, financial economics includes the study of the theories behind production, consumption, and distribution of goods and services. These studies attempt to clarify how the use of natural, technological, and financial resources affects the lives of human beings. But more specifically, financial economics focusses on investment and market analysis, portfolio analysis, corporate finance, impacts of interest rates on investment, and the impacts of Federal Reserve Bank policy on inflation, unemployment and economic growth.
Why should a prospective student consider majoring in Financial Economics?
Every day our lives are impacted by economic forces, both near and afar, making financial economics personal and interesting. The study of financial economics helps students understand these forces and provides the tools to assess their impacts. It provides a framework for analyzing how individuals or families, businesses, and governments make decisions as they face trade-offs. Students majoring in financial economics develop strong analytical and quantitative reasoning skills that enable them to make good financial decisions. They also come to understand personal as well as corporate investment strategies. Such skills are valuable in all walks of life.
What interests and values are related to Financial Economics?
Students of financial economics have an aptitude for quantitative and analytical reasoning. They employ logical and rational thinking to find solutions to various problems. Students of financial economics often value intellectual growth. They are curious and have an express interest in securities, bonds, investment and market analysis, portfolio analysis, corporate finance, impacts of interest rates on investment, and broader economic factors such as inflation, unemployment and economic growth. Financial economics students usually enjoy exploring financial analytics, portfolio management and financial strategy development.
What Career fields are related to Financial Economics?
The financial economics major combines economics with the tools of finance to prepare students for careers in financial institutions (e.g., commercial banks, Federal Reserve), capital markets, and the treasury/investment functions of a business. Some specific careers include: financial analyst, securities and investment analyst, securities trader, investment banker, bank manager, portfolio and investment advisor, etc.