I have recognized that some b-schools offer PhD in "Financial Economics" (e.g. Chicago Booth, Columbia, Oxford Said and Yale), while others offer Phd in "Finance". Is there any actual difference between these two? If not then, why are they called by two different names?
What is the difference between "Finance" and "Financial Economics"?
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No difference. Any of the good finance PhD programs have students take the same first year courses as Econ PhD. Perhaps more emphasis is placed on the firm and less on conunsers in micro just as macro may make you prove more arrow-debreau equivalences or time series may focus more on forecasting than proof-writing. The big difference is in electives which are all chosen for you and generally fall into the area of asset pricing, corporate finance, or financial intermediation. But even there financial intermediation is contract theory, corporate is an applied micro class, etc...
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I have recognized that some b-schools offer PhD in "Financial Economics" (e.g. Chicago Booth, Columbia, Oxford Said and Yale), while others offer Phd in "Finance". Is there any actual difference between these two? If not then, why are they called by two different names?
From my experience Financial Economics is a term invented by Economists who want to appear as though they are doing Finance. In reality, they are not really doing finance, they are doing economics, but to compensate for their inferiority they claim that finance is just a subfield of economics.
On the other hand, Finance is Finance, which is what you see in the majority of articles published in JF, JFE and RFS.
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^ Um... Journal of Financial Economics???
Exactly. That dude is an idiot.
In truth there is zero difference. Financial econ is the study of financial markets, just as labor economics is the study of labor markets.
It just so happens that financial economics was found to be very helpful to the private sector and so that subfield, unlike the other subfields of econ, took on a life of its own.
As a rough analogy, think of astronomy branching off of astrophysics. you cannot do astronomy without invoking physics. Likewise, you cannot do finance without invoking econ.
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Financial economics is typically more selective to get into. Other than that, pretty much identical. It's a costly signal. You demonstrate that you were one of the people willing (and able) to get into the more selective program.
But, that's a signal about your quality 5ish years before the rookie market. It's pretty quickly subsumed by your productivity in the program.
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The only difference is that "Finance" is housed in the B-school while "Financial Economics" is housed in the econ department. B-schools are weird in that they like the control and the perception of exclusivity so they often do their own thing. It's the same reason why some B-schools offer a PhD in "Business Economics" to compete with the conventional Econ department. When I was going through grad school and wanted to focus on financial economics I took Asset Pricing and Corporate Finance in the B-school while the Finance PhDs took Time Series and Micro in the Econ department.
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Financial economics is typically more selective to get into.
Really?
At least the schools I know, yes. Financial economics is a joint program so both b-school and Econ dept have to like you, making it [at least matginally] harder to get into than either one individually.
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Then, why have major break-throughs made by economists' top econ journal articles, which are referenced in papers at top finance journals?
I have recognized that some b-schools offer PhD in "Financial Economics" (e.g. Chicago Booth, Columbia, Oxford Said and Yale), while others offer Phd in "Finance". Is there any actual difference between these two? If not then, why are they called by two different names?
From my experience Financial Economics is a term invented by Economists who want to appear as though they are doing Finance. In reality, they are not really doing finance, they are doing economics, but to compensate for their inferiority they claim that finance is just a subfield of economics.
On the other hand, Finance is Finance, which is what you see in the majority of articles published in JF, JFE and RFS. -
Just look at curriculum from schools which offer both programs (e.g. Chicago, MIT). Financial Econ PHD has slightly more pure Econ courses and places at both Econ and Finance departments. Anyone applying to Finance PhD solely aims for finance professorship (Or industry)