Ph.D. in Financial Economics

Pursue a Ph.D. in Financial Economics at Carnegie Mellon’s Tepper School. Focus on asset pricing, corporate finance, and market research.

The purpose of the Ph.D. program in financial economics is to educate students in the concepts and analytical techniques needed to understand and advance the frontiers of knowledge in financial economics. The program provides students with sound training in economics, finance and quantitative methods, as well as the opportunity to work closely with faculty on original research.

Financial economics deals with the pricing of capital assets and the financial decisions of individuals and firms. Much of its attention is devoted to the study of the effects of information, attitudes toward risk, taxation, macroeconomic fluctuations, and time on investors' investment choices and security market prices. Issues involving the behavior of firms are also of interest, including the importance of corporate dividend, capital structure, and investment policies to firm valuation.

The Ph.D. program in financial economics is designed to educate students in the concepts and analytical techniques required for basic and applied research in these and related areas. This training typically leads to academic careers at other major business schools and economics departments.

Carnegie Mellon is one of the few institutions at which the economics department for the university as a whole is housed in the business school. This creates an environment which is especially conducive to close integration between the various management studies and economics. The Tepper School of Business at Carnegie Mellon has long played a pioneering role in the application of new ideas and techniques in economics to financial problems.

Research Topics

Asset Pricing Theory

  • Market Incompleteness
  • The Effect of Incomplete Markets on Security Valuation
  • Risk Preferences
  • Asset Pricing and Investor Risk Preferences
  • Mortgage Valuation
  • The Valuation of Mortgage Loans

Tax Effects in Security Markets

  • Treasury Bonds
  • Tax Effects in the Relative Pricing of Treasury Bonds
  • Municipal Bonds
  • Term and Tax Effects in the Pricing of Municipal Bonds
  • Capital Gains Taxation
  • The Effect of Capital Gains Taxation on the Optimal Trading and Equilibrium Pricing of Financial Assets 

Corporate Finance

  • Corporate Control
  • Capital Structure And Corporate Control
  • Optimal Bankruptcy Law

Market Microstructure

  • Design of Financial Markets
  • Limit and Market Orders
  • Trading Strategies

International Finance

  • Risk Premia in Currency Markets
  • Lottery Bonds
     

Please visit our Ph.D. Student Profiles page to view the profiles of our current doctoral candidates.

Requirements for the Ph.D. in Financial Economics

Ph.D. students in Financial Economics must fulfill all of the general Tepper School Ph.D. requirements, in addition to any area specific requirements. 

The curriculum in financial economics reflects the close relationship between finance and economics. Students take most of the core economic courses, such as microeconomics, macroeconomics, econometrics, dynamic competitive analysis, and economics of contracts.

In addition, they typically elect courses from the mathematics and statistics departments and take the doctoral seminars in finance. Students are also encouraged to take Empirical Methods for Finance & Accounting.

Students take qualifying exams at the end of the third semester. The required exams are:  microeconomics (choice of 2 out of 3 questions), macroeconomics (choice of 2 out of 3 questions), econometrics (choice of 2 out of 3 questions) and finance (all questions. Typically, there are 4 questions).

Students with appropriate preparation prior to their entry to the program may choose to take the qualifying exams prior to the third semester, however, they must take the entire set of qualifiers as outlined above. For further information, visit the qualifying examinations page.

The purpose of the first and second year papers is to give students the opportunity to conduct original research. In many cases, these papers, and in particular the second year summer paper, lead to a thesis topic. Finally, you must attend the weekly Finance seminar. This is the only place where you can “see” research being done in public through the presentation and discussions. Also, attend seminars in economics, accounting, and others.