Financial Economics
The Financial Economics Ph.D. Program is a joint degree offered through the Finance Department at the Kellogg School of Management and the Economics Department at the Weinberg College of Arts and Sciences.
As a student in the Financial Economics Ph.D. Program, you will have access to a broad array of faculty across a variety of disciplines within economics, tapping into the interdisciplinary strengths found within our Finance-Economics curriculum. Additionally, this program benefits by location — our Economics department, Ph.D. students, and research faculty are conveniently located within our new building, the Global Hub, just one floor down from the Finance department.
Some of the most active areas of current research are at the intersection of economics and finance. The aim of the Financial Economics program is to leverage the close ties and common research interests of the Economics Department and the Finance Department at Northwestern to train Ph.D. students interested in these interdisciplinary areas. You are required to do coursework in multiple fields in economics and finance, and are exposed to the most up-to-date models and methods in these fields. Faculty members from both departments supervise you as you develop your own research projects. You also benefit from close collaborations with students in both departments, and participate in weekly seminar series that draw faculty and Ph.D. students together for scholarly discussions across common research areas, including finance, macroeconomics, industrial organization, development economics, economic theory, and more. The program aims to produce scholars who can be successful in both economics and finance departments.
Active research areas
The study of finance aligns with numerous areas within economics: macroeconomics, public finance, econometrics, household finance, economic development and economic history. This is why broad training in economics is essential for those who wish to do innovative work that straddles both finance and economics. Some examples include the financing and investment decisions of firms, households and governments; the interplay between asset prices, capital markets and the macro-economy; and the role and limitations of financial institutions in facilitating access to credit.
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Financial Economics PhD students will collaborate with world-renown scholars within our Finance and Economics departments. They include elected fellows of the American Academy of Arts and Sciences, the Econometric Society, the Society for Financial Econometrics, and the National Bureau of Economic Research. They serve/served as directors of the American Finance Association and past-presidents of the Econometric Society and Western Finance Association. Several faculty serve/served in editorial positions at leading journals, such as the American Economic Review, Econometrica, Journal of Economic Theory, Journal of Finance and RAND Journal of Economics. Recent publications within top economics and finance journals include American Economic Review, Econometrica, Journal of Finance, Journal of Financial Economics, Journal of Political Economy, Review of Economic Studies, and Quarterly Journal of Economics.
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We seek students with strong training in mathematics and statistics and a solid background in economics, either through prior study or through work and research experience. Recommended coursework at an advanced level includes calculus, linear algebra, optimization, probability, and statistics. Prior research experience is not required.
There are two points of entry into the Financial Economics program: as a new graduate student at Northwestern or as a transfer student from either the Economics or Finance Ph.D. programs.
- New Graduate Student to Northwestern — Applicants submit one application to the Financial Economics Ph.D. Program that is reviewed by both Finance and Economics faculty, who then renders a joint admission decision. Students enter the program as a first-year Ph.D. student.
- Transfer Student — Economics or Finance Ph.D. students who are completing their first year of study and have satisfied all the requirements within Economics may apply for a transfer by contacting the Director of Graduate Study in the program they are currently enrolled in. Applications must be approved by both the Economics and Finance admissions committees. If the application is approved, the student will initiate a degree transfer request to The Graduate School.
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Coursework
In years one and two, you take three or four courses each quarter (fall, winter, spring). In the first year you complete the three core sequences in Microeconomics, Macroeconomics and Econometrics. In year two, you enroll in a minimum of nine approved courses including at least two courses from the sequence in asset pricing, at least two courses in corporate finance, two economics field sequences of at least two quarters each, and at least one course in economic history. You must maintain a minimum 3.0 grade point average (GPA).
Qualifying exam
At the end of year one, you are required to establish competence in the three core areas of study: Microeconomics, Macroeconomics, and Econometrics. This competence is satisfied by achieving a 3.0 GPA in each of the three-course sequences.
During the summer following your second year of study, you must pass a comprehensive qualifying exam designed to measure competence in both asset pricing and corporate finance or you demonstrate competence by maintaining a 3.6 GPA average across both course sequences.
Candidacy
As you transition from coursework to research, you are required to write an original research paper in the summer of your second year supervised by a faculty advisor. You present your completed research project to the faculty of the joint program in September following the summer quarter of your second year. At that time, your performance is reviewed by the faculty of the joint program, and upon successfully completing your coursework, and passing your qualifying exam and second-year paper, you are admitted to candidacy.
Third-year paper
A second paper is typically completed by the winter quarter of the third year and presented during the Economics 501 seminar in the spring quarter of the third year. The research paper has to be sufficiently advanced to be part of your dissertation.
Research, proposal, and dissertation
The main activity in years three and four is research toward a thesis of publishable quality, under the direction of one or more faculty advisors. A thesis proposal must be presented to the faculty committee no later than the end of the fall quarter of your fourth year of study. In your final year in the program, you must complete a dissertation demonstrating original and significant research and must pass a final oral examination (“defense”) on the dissertation.
Teaching requirement
To promote engagement with faculty and integration with the intellectual life of the department, students serve as research assistants and teaching assistants during years two, three, and four. Research assistantships (RAs) are an excellent lead-in to research; teaching assistantships (TAs) prepare you for teaching after obtaining your Ph.D.