An economist’s primary concern is the distribution of resources in a society. Economists collect data to help them understand the many financial functions of society and business through a variety of research methods. The financial economist, who focuses on economic variables, is one specialization in this field. Financial economists research historical trends in the money and banking systems with the goal of using their findings to develop financial success models. The financial economist might also look into interest rate changes and their consequences.
A financial economist may be required to conduct research in a particular field and present the results in an academic or professional setting. He or she might, for example, look at the profits from issuing a specific type of loan to a specific type of person and create a model based on what has worked in the past. He or she might then show the model to a client or submit it to an academic journal. He or she may be expected to analyze economic data, make financial recommendations, or develop financial gain methods based on historical analysis as part of the research.
A financial economist might, for example, research the history of a specific type of bond and use that information to create a new model for navigating today’s economic environment. He or she might also concentrate on commodities, stocks, interest rates, or derivatives, which are all important tools in financial economics. A financial economist is concerned with developing sound financial plans, so his or her work can benefit a wide range of organizations.
Many types of organizations require long-term funding or must balance risk and opportunity in any financial act, so a financial economist’s work could be used to support individual, corporate, state, or national decisions. A family’s decision to take out a specific type of mortgage, for example, might be influenced by financial economics. If a particular type of mortgage has worked for one family in the past, it may work for other families in the future. Furthermore, based on various models and historical financial data, financial economics may assist a bank in deciding whether or not to lend to a specific type of person.