The Economics Department constantly strives to improve the education our students receive. While education researchers have known that experimentation and practical experience are important aspects of the learning process for many students, our academic setting has made it hard for us to incorporate practical application into our on-campus courses.
That changes this year for our courses in the economics of financial markets. We’ve created a three-course sequence that will include not only the study of the theory and history of financial-market activity, but also practical applications of the theory to a host of market-related outcomes. With the generous funding of the Nasdaq Educational Foundation, we have created the template for a truly hands-on learning experience. Students completing the sequence will learn both the theoretical knowledge of financial markets and the practical experience of financial-market transactions.
What’s the innovation? Learning by doing.
- It is one thing to understand the theory of asset pricing, and another to incorporate that knowledge into bidding in a financial auction. Our students through participating in the bidding will deepen their understanding of asset pricing.
- Learning the theory of Federal-Reserve use of interest-rate targeting is only the beginning to understanding the connection of monetary policy and the real economy. Experimenting with quantitative modeling techniques provides depth of understanding crucial to any financial-market analyst.
The Nasdaq Educational Foundation shared our vision and has provided a three-year grant to fund its implementation. In appreciation we will call this the Nasdaq Initiative for Quantitative Financial Economics. Students completing the three-course sequence will receive a credential from the Economics Department indicating their achievement. You will find a short write-up of the credential requirements here.
We think this is an important and powerful approach to liberal-arts education. Incorporating practical exercises, quantitative simulations and creative experimentation will lead to better learning outcomes for most of our students. While we will demonstrate the value of the approach first for financial markets, we plan to extend it to other economic choices: health care, labor supply, industrial organization and consumer choice. And yes, completing these courses will provide our students with a nuanced understanding of financial markets that will be quite useful should they decide to become professionals in the field.
Innovating in education is critical to what we do. We, too, are learning by doing.
The photo above is a message that Nasdaq broadcast on their tower in Times Square. The world is learning about us!