Duke MA Economics

Statement of Purpose

Economics, outside the school of economics, is often related to the management of assets or even strategic understanding of stock investment. This was the generic questions I would often receive from my colleges in the military. It is true the economists have conjured up sophisticated theories like the “Fifty Percent Principle” and the “Rational Expectations Theory” where claimed the players in economy will act in a way that conforms to what can be logically be expected in the future. However, as I became more subject to these questions, I began questioning the role of business.

At Berkeley College, I majored in business administration management. In fact, even as a business management major, I had exhausted my efforts in the subjects of accounting and math, as I believed the numerical analysis and predictions were more logical and acceptable – tutoring peers in subjects like Financial Accounting, Managerial Accounting, and Microeconomics. Furthermore, in late 2008, I lived in the height of the subprime mortgage crisis. For me, this was unacceptable – in school I was bombarded with how people act rationally and how markets strive to prosper, always supported by lengthy historical documents on the evolution of the market, the market had collapsed. I must have been missing something from my studies.

Therefore, I sought for answers in economics – in fact, enrollment in courses like Macroeconomics had given me hopes that the only possible way to go beyond the vulnerable human factors was to better understand the governing numeric behind economic activities. Therefore, with this firm belief in economics in helping me to better understand the market, I decided to major economics, with emphasis on math at University of Wisconsin-Madison. At UW Madison, I manifested my knowledge in economics, especially opening my eyes on macroeconomics by enrolling in various courses like Macroeconomics Theory – in particular Issues in International Finance course helped me to add logical and mathematical details to understanding the financial impact of the subprime mortgage. Here, I realized the importance of failures of both the risk management and mathematical financial modeling on the outcome as well as imperativeness of ethical decision making and financial modeling.

As I slowly manifested my interest in economics, I wanted to apply my knowledge in a more practical context, so, I began to take active part in the Korean Economic Student Association, both as a member and a vice-president. Here, we initiated a research among many on discussing the effects of reducing government expenditure by the Korean government would have on the economy, especially those on family finances as well as whether the determination of the international oil prices based on AD-AS curve could be explained and predicted by the theories learned in class. The more issues we exposed ourselves through the lens of economics, the more understandable the world economy could be accepted.

Therefore with this affirmation, I proposed entering the Investment Simulation Project with couple of members of the Association. The project was set in a virtual reality using the actual web program used by Woori Investment and Securities Company. Based on our analysis of the market, as the Korean economy was slowly recovering and the volume of Korean exports of aviation products is continuously on a rise, we decided to invest in the stocks of Korean Airways (we excluded Asiana as they were facing liquidity problems resulting from excessive M&A agreements and strategies). Through this investment simulation project, I was able to grasp a bigger comprehensive understanding of economic phenomena as well as the inter-relationship between policy and international trade and finance. However, more importantly, I was able to gain firsthand practical experience on the validity of mathematical strategies, including the Theory of Probability and the Game Theory.

The project produced great learning: in fact it helped me to dream about my future as an analyst of Securities Company in Korea. However, at the same time, this experience has helped me realize my current limitations, especially in area of theories of finance, analyzing financial statements, valuation skills, and other professional knowledge required to succeed in this particular field. Therefore, I would like to expand my knowledge and pave the foundations for my future through the distinguished graduate program at Duke, through the Master of Arts in Economics.

In graduate school, I would like to direct my studies on building greater skills in determining asset pricing. We all remember the global catastrophic effect of the subprime mortgage crisis. But, what many do not know is that this all stem from inaccurate pricing of assets – becoming the cause for collapse of the financial markets. This understanding was solidified through my undergraduate studies and I strongly believe that greater theoretical understanding of the asset pricing model through mathematical analysis would help me to analyze, predict, and even prevent these financial crises from occurring in the future. Furthermore, expanding my studies on portfolio theory, and asset management based on optimized and rational asset pricing is another interest of mine as it would help me to devise many workable solutions to help individuals, corporations, communities, and even countries to effectively respond to the ever changing dynamics of the international financial markets.

To this end, I believe the Master of Arts in Economics is ideal. First and foremost, the flexibility of the program premised on robust quantitative approach to economics would be ideal building the necessary academic pillars for my future studies. In particular, through the Financial Derivative (ECON 674) I look forward to solidifying my understanding of futures and options, while the Selected Topics in Economics would help me to apply my theoretical knowledge to the pressing issues of today, adding practical validation and experimental spirit to the theoretical knowledge. In fact, the offering of extensive courses on various topics of economics through the lens of economic theory and microeconomics, coupled with analytical approach would be ideal in preparing myself for a future in asset pricing. In addition to these curriculum offerings in class, I am excited to utilize the experimental learning spirit hosted through various venues like case study events, internships, and distinguished speaker series would provide strong incentives and foresight into my future, where I would learn the wisdom and experiences of current leaders to better design my future.

Now, I stand at a critical juncture in my professional career, and I believe the Master of Arts in Economics will provide the ideal foundational training necessary for me to grow and excel as a professionally analyst upon graduation.