What to Know About Pursuing a Master's in Financial Economics

Published November 10, 2023

Abstract graphic image Financial economics is a rapidly growing field that blends microeconomic and macroeconomic theory with statistics and econometrics for real-world financial decision-making. If you’re interested in advancing your career as a financial analyst, adviser, or consultant, a graduate degree program in financial economics can help you develop the in-demand specialized knowledge and skills employers value.

Read on to learn the core components of graduate study in financial economics and how a degree program can position you for success in the dynamic world of finance.

Why Pursue a Master’s in Financial Economics Program?

Professionals in financial economics identify economic trends and help maintain financial stability for public and private institutions—and for the overall economy. Studying financial economics at the graduate level can help you develop quantitative skills, economic tools, and the ability to conduct empirical market analyses. Through a financial economics master’s degree program, you will build a foundation in microeconomic and macroeconomic theory, statistics, and econometrics, with the opportunity to also study financial management, behavioral economics, the economics of derivatives, and other areas of interest.

Quantitative Skills

In financial economics, math isn’t an abstract concept—it’s a pragmatic tool that allows you to dissect market behaviors, identifying trends and quantifying risk. These skills are at the foundation of strategic financial decision-making in a world where data defines success.

Econometric Tools

Econometric tools empower you to unravel the intricate relationships between economic factors and financial outcomes. Proficiency in econometrics allows you to model market behaviors, forecast trends, and assess the impact of policies on financial landscapes.

Empirical Market Analysis

Empirical market analysis equips you to decode financial complexities with real-world data. It’s not just theory–it’s practical prowess. By dissecting historical market data, you uncover patterns, assess asset performance, and discern market trends.

Return on Investment

Pursuing an MS in Financial Economics positions you for accelerated career growth, as this specialized knowledge is in high demand across sectors. As global markets become increasingly complex, adeptness in quantitative skills, econometric tools, and empirical analysis will be ever more highly valued.

Areas of Interest

Financial economists may gravitate toward sub-specializations or areas of interest based on their career goals. Three common areas of interest are:

Investment Analysis

Gaining expertise in investment analysis allows you to assess asset values, forecast market trends, and make informed investment decisions. Understanding financial modeling, risk assessment, and portfolio optimization techniques will help open doors to roles such as financial analyst, portfolio manager, or investment consultant. In such roles, you will analyze securities, evaluate risks, and recommend strategies to maximize returns for individual investors, corporations, or financial institutions.

Risk Management

Risk management involves identifying, measuring, and mitigating financial risks, so you will need to master quantitative modeling, scenario analysis, and stress testing, and might pursue roles such as risk manager, credit analyst, or derivative trader. In such roles, you would assess potential hazards, devise strategies to mitigate losses, and ensure financial stability for organizations operating in dynamic markets.

Behavioral Finance

Taking a course or courses on behavioral finance allows you to understand the psychology of financial decisions by studying how biases, heuristics, and emotional factors influence choices.

Those with knowledge of behavioral finance excel as behavioral economists, investment advisors, or behavioral finance researchers. They analyze how psychological factors impact market trends, devise strategies to exploit behavioral anomalies, and offer insights that challenge traditional economic theories, shaping smarter investment decisions and market strategies.

Careers in Financial Economics

Where will a master’s in financial economics take you? Below are some job titles for financial economics graduates:

Economist

Economists analyze and interpret economic data and trends to provide insights into various aspects of the economy. The average salary for mid-level economists is $114,262, while senior-level economists earn $214,182 on average.

Data Scientist

Data scientists harness data-driven insights to navigate the intricate world of finance. They blend their quantitative skills, econometric expertise, and empirical analysis proficiency to make informed decisions. The average salary for mid-level data scientists is $102,805, while senior-level data scientists earn $176,645 on average.

Statistician

Senior statisticians takes a leadership role in statistical analysis and data interpretation within an organization. The average salary for mid-level statisticians is $98,189, while senior-level statisticians earn $163,055 on average.

Financial and Investment Analyst

Financial and investment analysts collect data, conduct research, and perform quantitative analyses of assets for public and private institutions. The average salary for mid-level statistician is $94,605, while senior-level data scientists earn $177,660 on average.

Other job titles tied to an education in financial economics are risk management analyst, capital market analyst, and portfolio manager.

Data Source: Industry, occupation, compensation, and projected growth data are supplied by Lightcast. Get more career and salary information using the Career Outlook tool on JHU’s MS in Financial Economics program page.

Find Out What You Can Do with an MS in Financial Economics

The MS in Financial Economics program offered by Johns Hopkins University’s Advanced Academic Programs division is designed to meet the needs of working professionals and offers an opportunity to learn from leading innovators and connect with accomplished peers.