Financial Economics Proposals
New Minor ………….…… p.1
New Concentration …..… p.14
Proposal for new Minor in Financial Economics, offered by the
Economics Department.
October 1, 2009
Dr. Patrick Bayer, Chair, Department of Economics.
I. Description and rationale
Part A: Describe the proposed minor, and explain how it fits into the educational
mission.
The economic turmoil in the financial markets over the past year has once again turned
the attention of many to how deeply such sudden change can affect myriad elements of
society. Duke does not currently offer undergraduates a targeted academic path to study
in-depth the economic subfield of “financial economics” – the subfield that investigates
the financial sector and its interaction with the “real” sector of the economy. In the
current curriculum, students learn about these subjects in scattered classes, largely in the
Economics Department. But clearly financial economics is a complex and very important
part of the modern world – and a university like Duke can make positive contributions to
its proper role in society. Through its teaching, its research and its engagement with the
financial services community, Duke should thus lead rather than lag in preparing our
students to meaningfully shape the financial sector of the economy – and to use their
knowledge to make a beneficial difference. The Department of Economics proposes a
Minor in financial economics as a way to increase all Duke students’ understanding of
the financial sector within the context of a broader liberal arts curriculum.
Given Duke’s long-standing liberal arts focus to undergraduate education, it is important
to view this proposed minor in financial economics as a new complement within a broad
curriculum rather than as the pre-professional training in finance that it is in
undergraduate business programs at peer institutions. While the enormous existing
student demand for classes in financial economics is undoubtedly driven in part by their
desire to ultimately find employment in the financial sector, our aim in meeting this
demand is driven by the broader goal of integrating financial economics into courses that
explore the relationship between the abstruse financial side of the economy and the more
visible “real” sectors of the economy. The importance of an understanding of this
relationship is perhaps most clearly demonstrated in the current crisis as it relates to home
mortgages and their impact on the macro-economy as well as the individual lives of
households caught in the midst of this crisis. But the connections to real issues at the
center of a liberal arts economics education reach far beyond this most obvious example.
In addition to traditional course offerings in financial economics, we can envision, for
instance, offering courses on:
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how the financial sector affects the disadvantaged and the urban
underclass
the role of micro-credit in developing economies
the role of the legal system in appropriately functioning financial markets
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How in disparities in educational opportunities, arise from the problem
of financial borrowing constraints
the interaction of formal financial markets with informal family
mechanisms for dealing with risk and uncertainty
the role of psychology in “behavioral finance”
the problem of retirement security in a global society
the cross-cultural notions of the ethics that govern financial institutions.
It is, in fact, difficult to conceive of any subfield in economics that does not have deep
connections to financial economics – and it is in these connections that we recognize the
potential of financial economics as a fertile component of a liberal arts education.
Ultimately, it is not to the Economics Department’s comparative advantage to impart preprofessional skills, but rather the advantage lies in developing skills that are valued in the
marketplace while providing a bigger picture framework -- one in which students see the
decisions made in financial sectors as intimately connected to broader intellectual
questions of deep social significance. In this sense, when properly framed as part of a
liberal arts education, a minor in financial economics is consistent with the students’
desire to gain more intimate knowledge of the financial services sector and with the
broader goals of a liberal arts curriculum. At the same time, we do not believe that
opportunities to gain a greater understanding of the financial sector ought to be restricted
exclusively to economics majors, but that there ought to be paths for students that have
acquired the necessary skills to gain such understanding even as their primary major rests
in another department. In fact, we believe that students will benefit a great deal more in
the long run from confronting the salient issues in the financial sector through programs
that frame these within the larger context in which the financial sector operates. In this
way, our students can be prepared to confront the challenges of our time while they
accumulate the knowledge that will permit them to effectively compete with students
from our peer institutions that take a narrower view of undergraduate finance education
via business-focused majors. Our approach furthermore fits well with Duke’s larger
strategic plan of equipping students to put their knowledge in the broader service of
society.
Our department, as outlined in its recent self-study, is well equipped to begin offering a
minor of this type. Unusual among economics departments around the country, our
department has a tradition of faculty strength in the area of financial econometrics
complemented by outstanding teaching in financial economics. And, with the support
infrastructure of the EcoTeach center, much initial logistical support is in place to begin
our effort in this direction prior to additional teaching and support resources coming on
line as the program expands in size.
Part B: Relationship with other majors, minors, certificates, including areas of potential
overlap.
The potential of this minor raises several questions regarding its relationship with
existing areas of undergraduate focus. First, because training in financial economics is
currently offered within the economics major, to what extent will the new minor affect
our own department’s economics major? Second, how much of the student interest in
financial economics is related to interest in the business world more generally, and
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therefore how will the creation of a minor in financial economics impact the Markets
and Management (MMS) certificate? Third, how much of the interest in financial
economics currently resides among a subset of students majoring in mathematically
oriented subjects (like math, statistics and computer science), as well as students in the
Pratt and Sanford Schools?
With respect to economics majors, we are developing a parallel concentration in
financial economics within the major – thus creating positive spillovers for economics
majors. It is likely that some students who currently major (or double-major) in
economics in order to gain access to existing courses in financial economics may decide
to major in another department and complement that major with this new minor. Given
the substantial math and statistics pre-requisites in the proposed minor, our analysis
suggests that the number of economics majors is likely to decline by approximately 10%
(see part C of this section). Given the large size of the economics major, we do not view
such a potential decline in the number of majors as a major impediment to implementing
expanded opportunities for students in other departments. Instead we view the expanded
course offerings in financial economics that would result from the creation of a minor as
a net positive for those students who continue to major in economics.
Given the potential impact this minor would have on the MMS certificate, we have
engaged with the leadership of the MMS certificate to discuss its likely impact. Just as
the Department of Economics may see a modest decline in the number of majors from the
creation of a minor, it is possible that the MMS certificate would see a similarly modest
decline. But, just as we view the creation of new courses as a net benefit to the major, the
leadership of MMS views such expanded course offerings as strengthening their own
efforts. It is, in fact, natural for training in financial economics to emanate primarily from
the economics department, allowing MMS to focus on areas of comparative advantage
and leveraging the department’s efforts to strengthen their own programs.
Finally, if Economics is likely to experience a modest decline in the number of majors, it
is likely that other mathematically oriented majors will see an increase in their number of
majors as some students combine the minor in financial economics with major training in
math, statistics, computer science or engineering. Given the statistics and math prerequisites for the minor, it is furthermore likely that math and statistics will see a modest
increase in enrollments as students prepare for the new minor.
Part C: Discuss potential impact on existing undergraduate or graduate academic
programs at Duke. Talk about likely demand.
As indicated in the previous part, we anticipate a modest decline in the number of
economics majors, a modest decline in the number of students obtaining the MMS
certificate and a modest increase in other quantitative majors outside economics. At the
same time, we argue that the minor would result in an increased diversity of course
offerings that will strengthen the economics major as well as the MMS program.
Between 15 and 30 students from the Pratt School double major in economics in any
given year. 1 We think that the majority of these students would switch their economics
major to a financial economics minor. The number of other quantitatively oriented
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For the years 2005 through 2010, for instance, the numbers of Pratt double majors in
economics were 15, 14, 27, 18, 17 and 17(est.).
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double-majors (from math, statistics and computer science) has recently increased, from
about 4 in 2005 to an estimated 15 in 2010. Again, we think that some of these students
will switch their economics major into a minor in financial economics. At the same time,
it is likely that the financial economics minor would attract a number of quantitatively
oriented students from Pratt and other majors – in particular those students who currently
are on the margin of getting a double major with economics in order to take financial
economics courses but choose not to do so because of the larger number of pre-requisites
into the major. For those students, the financial economics minor would in essence lower
the barriers for obtaining access to material they would like to study but currently cannot.
The vast majority of joint majors from other departments would likely remain double
majors due to the higher math pre-requisites for the minor in financial economics and
presumably because many of them are attracted to the economics major by factors other
than the department’s course offerings in financial economics. Our overall conclusion for
the economics major is that we should therefore expect to lose between 15 and 30 majors
while attracting in the neighborhood of 50 new minors.
We are less able to predict precisely how the other affected areas are likely to be
impacted but, as suggested above, anticipate a modest increase in majors for some of the
more quantitative departments, a modest decrease for the MMS certificate – but with an
improved set of course offerings benefiting students in all of these areas.
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II. Detailed Description: Requirements and Curriculum
Students pursuing the financial economics minor will be expected to take a minimum of
five courses, two of which are required, while the remaining courses may be selected
from a menu of options. Pre-requisites for the minor include both mathematics and
statistics courses.
A. Three Pre-requisite Courses (Required):
Mathematics skills and tools are essential pre-requisites to a thorough grasp of financial
theory and its applications. We impose additional, relatively high mathematics
requirements for the financial economics minor to compensate for the fact that these
students will not have as much economic intuition, since they will not be taking the core
economics theory courses. Because the students who pursue the minor will have more
mathematical training, they will be comfortable with the quantitative level of the
financial economics courses and hence able to focus their efforts on learning the
economic intuition behind the models. Their classmates who have an economics
background will be focusing more on mastering the technical tools, being more
comfortable with the economic ideas embodied in them.
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MATH 103: Multivariate Calculus. (Higher level math courses are also acceptable.)
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MATH 104: Linear Algebra and Applications
OR
MATH 107: Linear Algebra and Differential Equations.
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STAT 103: Probability and Statistical Infererence. (Certain higher level stats courses
are also acceptable.)
B. Two Financial Economics Core Courses (required):
Core courses for the minor include both introductory economics and introductory finance.
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ECON 51D: Economic Principles. Instructor: Fullenkamp, Leachman. Enrollment:
400 each semester. Pre-reqs: None.
This course introduces basic macroeconomic concepts such as inflation,
unemployment, and economic growth, as well as micro concepts such as preferences
and the relationship between supply, demand, and price. Students are also introduced
to different perspectives on monetary and fiscal policy. All of these concepts are
necessary precursors to the fundamental underpinnings of financial markets. This
course is open to all undergraduate students, with no pre-requisites.
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Econ XXX: Intermediate Economics For Finance. Instructor: Burnside, Rasiel.
Enrollment: 150 each semester. Pre-reqs: Econ 51D, Math 104 or 107 or Econ 105,
Stat 103. Currently under development.
This course integrates intermediate level micro- and macroeconomics with topics in
finance to provide a gateway course into both the financial economics minor as well
as the concentration in financial economics for majors. Students will either be strong
in their intermediate economics tool-kit (by having taken Econ 105 (and Econ 55 that
is a pre-requisite to Econ 105)) or sophisticated in their mathematical preparation (by
having taken Math 104 or 107). The former will most likely involve economics
majors who are interested in a concentration in financial economics and require
additional technical preparation for the concentration. The latter are most likely noneconomics majors who are pursuing a Minor in Financial economics and require
additional economic intuition to supplement their technical training.
C. Three Elective Courses:
These will be chosen from among a list of approved courses, some of which are
already taught within the department (see Appendix I for a list of existing and
proposed courses). Courses will include offerings in the three primary aspects of
financial economics: corporate finance, asset pricing, and time series econometrics.
Courses in all three of these areas are currently taught within the department.
The department also offers, or will add, courses in areas of finance that overlap with
other disciplines such as psychology and public policy. These include Behavioral
Finance (which integrates insights from psychology) and Public Finance (which
intersects with Public Policy).
III Proposed Bulletin Text
Minor Requirements: Economics 1A and 2A; or 51D. Mathematics 103 and either
Mathematics 104 or Mathematics 107. Econ XXX [Intermediate Economics For
Finance]. Three additional 100 level or above economics courses, to be selected from the
following: Economics 157, 166, 168, 183, 187, 200ES, 220, 225/Math 215, BME 120,
and others with approval of DUS.
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IV: List of Current Courses available for the minor
Pre-requisite courses
Mathematics 103, 104, and 107 are service courses offered by the mathematics
department each semester, with high enrollment caps. All of these courses are prerequisites for a number of different majors; adding these as pre-requisites for the financial
economics minor should not materially affect demand for these courses, especially since
the students most likely to be interested in the financial economics minor will likely take
these courses anyway as part of their major requirements.
Statistics 103 is currently a pre-requisite for the economics major. It is offered each
semester with high enrollment caps.
Required Courses
Economics 51D: Economic Principles. This is one of the largest courses in the university,
with enrollment exceeding 400 in some semesters. Students from a broad range of majors
take this class, and the class size varies considerably from semester to semester. The
economics department does not anticipate that the addition of 30-40 financial economics
minors will impose excess demand.
Economics XXX: Intermediate Economics for Finance. This course will apply
intermediate level micro and macroeconomic models to topics in financial economics.
Course to be developed. Expected enrollment: 100. See Section IIB for more details.
Elective Courses
Appendix I contains a list of existing courses that will be approved for the financial
economics minor, as well as a list of proposed new courses, some of which will be taught
by a new Professor of the Practice to be hired by the Economics department. It is
anticipated that the list of approved electives will change over time as offerings evolve.
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V: Description of New Courses to be offered for the minor
Some additional financial economics electives will be taught by a new Professor of the
Practice of economics, to be recruited to the department. See Appendix 1.
VI: Identification of Teaching Faculty
A. List of Faculty, including titles
Tim Bollerslev, Juanita and Clifton Kreps Professor of Economics
Craig Burnside, Professor of Economics
Tracy Falba, Associate Director of Undergraduate Studies
Connel Fullenkamp, Associate Professor of the Practice of Economics
Lori Leachman, Professor of the Practice of Economics
Andrew Patton, Associate Professor of Economics
Emma Rasiel, Assistant Professor of the Practice of Economics
Barbara Rossi, Associate Professor of Economics
CJ Skender, Senior Lecturer
George Tauchen, William Henry Glasson Professor of Economics
New Professor of the Practice of Economics
Arlie Petters, Benjamin Powell Professor of Math
Larry Boyd, Associate Director, Duke’s Center for Entrepreneurship and Research
Commercialization
All of these faculty members have indicated willingness to participate.
B. Teaching Responsibilities and how they may be impacted by the new minor
Since the courses these faculty will be teaching are applicable to their usual audience (i.e.
Econ majors) this imposes minimal costs on either those faculty or the department in
terms of teaching availability.
C. Estimate the need for new faculty, and funding sources.
We anticipate that will need one more Professor of the Practice to teach additional
financial economics electives. An initiative is underway to solicit five-year seed funding
for this position.
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VII: Administration
Program Direction: Professors Emma Rasiel, Connel Fullenkamp, and Thomas Nechyba.
Advising: Initially, this will be managed as part of the overall Economics advising team;
potentially in conjunction with new Professor of the Practice who would have specific
responsibilities in this regard.
Administrative Support: Initially, administrative support will be incorporated into the
EcoTeach Center, whose staff currently handle as many as 700 Economics majors.
Depending on the eventual size of the minor, it may be necessary to create additional
support. Should this prove to be the case, the new Professor of the Practice may be asked
to take on the role of administering the financial economics minor in conjunction with the
Ecoteach staff.
VIII: Available Funding
The Economics Department, in cooperation with A&S and Corporate Development, is
pursuing a proposal to solicit 5-year (external) seed funding for this effort. We anticipate
that such funding will be in place prior to the launch of the minor.
IX: Library Resources
Library resources currently used by students for the existing financial economics courses
will serve students opting for the proposed new minor.
X: Letters of Support
1.
2.
3.
4.
Letter of support from Dean of Trinity College
Letters from Chair and DUS in the economics department.
Letters from Chair and DUS in Statistics and Math
Letter from Associate Dean in Pratt
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Appendix 1: Electives for the Financial Economics Minor
Part A: Existing courses
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Econ 157: Financial Markets and Investment. Instructor: Rasiel, Patton or staff.
Enrollment: 60.
The structure and workings of financial markets. Topics include risk-return
relationships, aspects of portfolio selection, the capital asset pricing model, arbitrage
pricing theory, fixed income analysis, and aspects of derivatives.
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Econ 166: Global Capital Markets. Instructor: Rasiel. Enrollment: 24 (permission
of instructor required).
This course introduces students to the roles of various participants in the financial
markets, including investment banks, money managers, and so on. Students are
expected to stay current with business and finance news and issues. There are no prerequisites for this class; however, faculty consent is required for enrollment.
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Econ 168: Asset Pricing and Portfolio Management Instructor: Rasiel or staff.
Enrollment: 125.
Pricing models for asset classes such as bonds and equities, as well as derivative
securities including futures and options. on equity indices, currencies and
commodities. Portfolio risk analysis, speculation and hedging techniques.
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Econ 183: Managerial Accounting. Instructor: Skender. Enrollment: 75
The accounting model of the firm, transaction analysis, the use of accounting
information by management. Topics include procedures to process accounting data,
income determination, financial statement analysis, cost behavior, budgeting, and
short-run decisions. The construction and interpretation of corporate financial reports.
How a firm's performance is presented in the income statement, and how different
revenue and expense recognition practices affect this performance measure.
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Econ 187: Public Finance Instructor: Falba or staff. Enrollment: 30
Allocation and distribution of public funds. Use of and tradeoffs between taxation and
borrowing. Economic, social, ethical and demographic implications of federal and
state allocation decisions.
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Econ 195.12: Financial Risk Management Instructor: Fullenkamp. Enrollment: 30
This course investigates the main types of financial risks and the techniques used to
measure and manage these risks. Special attention will be paid to the instruments used
to manage risk, and the interaction between public policy and industry practice.
Implications for regulatory environment are also examined.
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Econ 195.49: Behavioral Finance. Instructor: Rasiel. Enrollment: 30
The field of Behavioral Finance uses psychology to explain so-called anomalies that
we observe in the financial markets—apparent mis-pricings and inefficiencies that are
not consistent with the classical economic models of rational behavior. Using some of
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the more popular and accepted theories of human behavior from the fields of
psychology and decision-making, we will characterize some prevalent features of
irrational behavior in the financial markets.
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Econ 200ES: Financial Derivatives / Financial Engineering. Instructor: Tauchen.
Pre-reqs: financial economics core courses
Pricing models for derivative securities including futures, and options on equity
indices, currencies and commodities, and interest rate and currency swaps. Uses of
derivatives for both hedging and speculative purposes.
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Econ 220: Time Series Econometrics. Instructor: Rossi. Pre-reqs: Econ 139 and
Linear Algebra or Instructor Permission Enrollment: 25
Empirical research in macroeconomics and international finance, providing students
with a series of econometric tools for empirical analysis of time-series and an
introduction to the current empirical research in macroeconomics, international
finance, and forecasting. Small project and simple empirical research required.
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Econ 225 / Math 215: Mathematical Finance. Instructor: Petters. Pre-reqs: Math
103, 104, 135 or equivalent, or consent of instructor.
An introduction to the basic concepts of mathematical finance. Topics include
modeling security price behavior, Brownian and geometric Brownian motion, mean
variance analysis and the efficient frontier, expected utility maximization, Ito's
formula and stochastic differential equations, the Black-Scholes equation and option
pricing formula.
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BME 120: Introduction to Business in Technology-Based Companies. Instructor:
Boyd.
Introduction to key areas of business, including finance, marketing, management and
intellectual property in the context of a technological start-up.
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Part B: Proposed new courses
The department anticipates hiring one new Professor of the Practice who will teach
additional financial economics courses that will serve as electives for both the financial
economics minor and the economics major. We anticipate that the new professor will
offer some of the following options. Other existing members of the Economics
department may also offer one or more of these courses as special topics from time to
time.
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Econ XXX: Intermediate Economics For Finance. Instructor: Burnside, Rasiel.
Enrollment: 150 each semester. Pre-reqs: Econ 51D, Math 104 or 107 or Econ 105,
Stat 103. Currently under development.
This course integrates intermediate level micro- and macroeconomics with topics in
finance to provide a gateway course into both the financial economics minor as well
as the concentration in financial economics for majors. See Section IIB for more
information.
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Econ 195.XX: International Finance. Instructor: Leachman. Enrollment: 40.
Currently under development.
This course analyzes how managers of international corporations do or should behave
in terms of hedging their international exposure. Emphasis is on the mechanics of the
foreign exchange market, reviewing spot, forwards, futures, swaps and options
markets: the main tools used to hedge exchange rate risk. The course constructs the
building blocks of international finance, and then introduces corporate aspects of
international finance, especially hedging techniques.
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Econ XX: Principles of Corporate Finance. Instructor: Staff. Pre-reqs: financial
economics core courses.
This course examines issues in corporate finance from the perspective of financial
managers who are responsible for making significant investment and financing
decisions. The concepts of net present value, uncertainty, and strategic concerns, are
used to analyze how investment and financing decisions interact to affect firm value.
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Econ XX: Microfinance in Developing Economies Instructor: Staff. Pre-reqs:
financial economics core courses
This course addresses the financial, legal and ethical issues of microfinance in
developing economies. The course begins with lessons from informal markets, the
role of women, the place of subsidies, impact measurement, and management
incentives. Issues of asymmetric information, principal-agent theory, and household
decision making in the context of microfinance will be discussed.
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Econ XX: Global Asset Allocation. Instructor: Staff. Pre-reqs: financial economics
core courses
The course begins with an overview of global economies and global financial market
risks and returns. Theoretical and practical issues in active asset allocation are
examined, including the Black-Litterman approach to using mean-variance analysis
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for global portfolio optimization. Both long-term, strategic asset allocation and
short-term, tactical asset allocation issues and strategies are presented, simulated and
critiqued.
Econ XX: Asset Pricing under Asymmetric Information. Instructor: Staff. Prereqs: financial economics core courses, Econ 55
This course builds on information economics and decision theory. The first building
blocks covered include decision making under uncertainty; von Neuman and
Morgenstern expected utility functions, concept and measures of risk aversion,
Jensen's inequality, certainty equivalents, risk premia and stochastic dominance.
Principal-Agent problems, including adverse selection and moral hazard, are
examined and basic signaling and screening models are introduced.
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Econ XX: Fixed Income Securities. Instructor: Staff. Pre-reqs: financial economics
core courses
This course explores key issues in fixed income, financial engineering, and risk
management. It develops tools for valuing and modeling the risk exposures of fixed
income securities and their derivatives, with the ultimate goal of deploying these
instruments in a corporate or financial risk management setting.
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Econ XX: Corporate Restructuring Instructor: Staff. Pre-reqs: Principles of
Corporate Finance
This interdisciplinary course examines the finance, economics, law and business
strategies that underlie major corporate restructuring transactions. These transactions
include: mergers, acquisitions, tender offers, bankruptcy, leveraged buyouts,
leveraged cash-outs, sell-offs, spin-offs, equity carve-outs, share repurchases, and
liquidations.
•
Econ XX: Global Asset Allocation. Instructor: Staff. Pre-reqs: financial economics
core courses
The course begins with an overview of global economies and global financial market
risks and returns. Theoretical and practical issues in active asset allocation are
examined, including the Black-Litterman approach to using mean-variance analysis
for global portfolio optimization. Both long-term, strategic asset allocation and shortterm, tactical asset allocation issues and strategies are presented, simulated and
critiqued.
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Econ XX: Venture Capital and Private Equity. Instructor: Rasiel, staff. Pre-reqs:
financial economics core courses
The financial, legal, and economic issues relating to financial contracts between
venture capitalists and their limited partners, as well as the firms they invest in. The
course addresses not only how venture capitalists provide capital to start-up firms in
growing industries, but also how private equity markets provide capital to help
established medium-sized firms (often family businesses) grow and restructure.
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Proposal for new Concentration in Financial Economics,
offered by the Economics Department.
October 1, 2009
Dr. Patrick Bayer, Chair, Department of Economics.
I. Cover Letter
We articulated in our proposal for the creation of a Minor in Financial Economics (as
well as our 2008 Self Study) (1) the need for a greater set of undergraduate opportunities
to study financial economics at Duke, (2) a vision for how to integrate such opportunities
into a broader liberal arts curriculum and (3) an explanation for the unique opportunity
that our department has to accomplish this given its faculty and infrastructure resources.
With the proposed creation of a Minor in Financial Economics, all Duke undergraduates
with sufficient quantitative training will have the opportunity to combine their chosen
major field of study with a minor field in financial economics. While the course offerings
for this minor will also be available to economics majors, the Minor degree will not itself
be available for economics majors. The current proposal for a Concentration in Financial
Economics therefore emerges from this asymmetry created by the formation of the Minor
in Financial Economics; i.e. the fact that only non-economics majors would be able to
pursue a formalized degree focused on how the financial sector operates within the
broader economy. The creation of a similar formalized track within the economics major
in the form of a Concentration in Financial Economics would remedy this asymmetry –
offering majors the same opportunity to formally focus on the financial sector in their
studies.
We therefore view the proposed Minor degree and the proposed Concentration within the
economics major as complementary and built around a similar rationale and
infrastructure. The difference between the two paths lies primarily in the different types
of preparation that those pursuing a Minor and those pursuing a Concentration bring to
their studies. Due to the more stringent quantitative requirements for the Minor, the
students who pursue a Minor in Financial Economics would enter the program with
strong technical and quantitative skills but less economic intuition. Due to the greater
number of intermediate level economics requirements that economics Majors will have
taken, those who enter the Concentration would be more prepared in terms of economic
intuition. Through a common gateway course, both Majors and Minors will have an
opportunity to build on their respective strengths before entering the elective course work
for their respective paths focused on Financial Economics.
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II. New Listing in the Undergraduate Bulletin
For the BS Degree with Concentration in Financial Economics
For the B.S. Degree
The Bachelor of Science degree in economics signifies achievement of proficiency in
quantitative skills and experience in applying these to economics. Students who contemplate
graduate study in economics are urged to develop skills in intermediate calculus (Mathematics
103), linear algebra (Mathematics 104), differential equations (Mathematics 131), and advanced
calculus (Mathematics 139). Students interested in graduate work in business administration may
wish to focus less on mathematics and more on computer science, statistics, and quantitative
economics.
Prerequisites: Economics 1A and 2A; or 1D or 51D. Economics 55D. Mathematics 32 and
102; or 103 or any higher-level mathematics course with Mathematics 103 as a prerequisite.
Statistics 103, Statistics 104/Mathematics 135, Statistics 112, Statistics 113 or Statistics
114/Mathematics 136. Statistics is a prerequisite for Economics 139D and many 100-level
economics courses and therefore should be taken by the fall of sophomore year. Prerequisites for
the major, as well as requirements, may not be taken pass/fail.
Requirements: Three core courses: Economics 105D, Economics 110D and Economics 139D.
Economics 139D should be completed no later than the spring of sophomore year since most 100level economics courses have Economics 139D as a prerequisite. Five electives chosen from any
additional non-core economics courses at the 100 level or above, with the exception of
Economics 151, Economics 182, and Economics 888.
Substitution of similar courses in other departments at Duke for courses in the Department of
Economics used toward major requirements is not permitted. A maximum of two transfer and/or
study abroad credits may be counted toward major requirements. (The only exception applies to
study abroad credit from the full year program at the London School of Economics, from which a
maximum of four transfer and/or study abroad credits may be counted toward major
requirements.)
The Department of Economics maintains online resources to guide economics majors and
minors: http://www.econ.duke.edu/ecoteach/undergrad/
For the B.S. Degree with Concentration in Financial Economics
The Economics department also offers a B.S. Degree with a concentration in financial
economics. Certification of this concentration is designated on the official transcript. Students
who wish to pursue this designation must complete the requirements for the B.S. Degree with the
addition of the following requirements.
Requirements: Economics XXX: Intermediate Economics for Finance. 2 Three electives chosen
from among the following 100 level economics courses: Economics 157, 166, 168, 181, 183, 187,
200ES, 220, 225/Math 215 and others with approval of DUS.
III Current Listing in the Undergraduate Bulletin
For the B.S. Degree
The Bachelor of Science degree in economics signifies achievement of proficiency in
quantitative skills and experience in applying these to economics. Students who contemplate
graduate study in economics are urged to develop skills in intermediate calculus (Mathematics
103), linear algebra (Mathematics 104), differential equations (Mathematics 131), and advanced
calculus (Mathematics 139). Students interested in graduate work in business administration may
wish to focus less on mathematics and more on computer science, statistics, and quantitative
economics.
Prerequisites: Economics 1A and 2A; or 1D or 51D. Economics 55D. Mathematics 32 and
102; or 103 or any higher-level mathematics course with Mathematics 103 as a prerequisite.
Statistics 103, Statistics 104/Mathematics 135, Statistics 112, Statistics 113 or Statistics
114/Mathematics 136. Statistics is a prerequisite for Economics 139D and many 100-level
2
A full description of this course is included in the Proposal for a Minor in Economics submission.
16
economics courses and therefore should be taken by the fall of sophomore year. Prerequisites
for the major, as well as requirements, may not be taken pass/fail.
Requirements: Three core courses: Economics 105D, Economics 110D and Economics 139D.
Economics 139D should be completed no later than the spring of sophomore year since most 100level economics courses have Economics 139D as a prerequisite. Five electives chosen from any
additional non-core economics courses at the 100 level or above, with the exception of
Economics 151, Economics 182, and Economics 888.
Substitution of similar courses in other departments at Duke for courses in the Department of
Economics used toward major requirements is not permitted. A maximum of two transfer and/or
study abroad credits may be counted toward major requirements. (The only exception applies to
study abroad credit from the full year program at the London School of Economics, from which a
maximum of four transfer and/or study abroad credits may be counted toward major
requirements.)
The Department of Economics maintains online resources to guide economics majors and
minors: http://www.econ.duke.edu/ecoteach/undergrad/