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October 31, 2007
FOR IMMEDIATE RELEASE
CONTACT: Amy Lunday
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Johns Hopkins Announces Center for Financial Economics

Seeking to blend the studies of economics and finance, the Johns Hopkins University this fall has established the Center for Financial Economics, an innovative, comprehensive new program that ultimately will offer an undergraduate minor and major and train graduate students in financial economics, said Adam Falk, the James B. Knapp dean of the Krieger School of Arts and Sciences.

The Center for Financial Economics, housed within the Department of Economics, will provide sound and rigorous training in economics and finance and demonstrate how the two facets of the economy are integrated. The Krieger School is officially launching the CFE this fall, naming economics professor Jon Faust (pictured at right) as its inaugural director.

Faust, who joined the Krieger School's Economics Department in 2006, is an accomplished scholar and a leader in the field of finance who brings nearly 20 years of experience in the Federal Reserve System, most recently as assistant director of its international finance division. Falk said Faust is "perfectly positioned" to lead the CFE.

"His appointment as director will allow us to emerge into an exciting period in which we realize our vision for the Center for Financial Economics," Falk said.

Of Faust's appointment, Joseph E. Harrington, chair of the Department of Economics, said, "Jon is uniquely qualified, as his knowledge and understanding of financial markets is rooted both in a distinguished research record and his experience at the Federal Reserve Board of Governors in dealing with the functioning of financial markets. In the Federal Reserve System, he was at the nexus of research and policy, and this experience is a terrific background for developing the CFE."

Faust said he is excited to help launch this endeavor. "It's a really great opportunity to get an important institution off on the right foot," he said. "I think the CFE is a fabulous idea, and there will be a tremendous amount of student interest in it."

The center is founded on the principle that neither finance nor economics by itself is sufficient to understand financial markets and to operate within them. While at least one other university offers a similar educational approach (Princeton offers an undergraduate certificate in finance), Harrington said the CFE will go further by first developing a minor, and eventually offering a major and a PhD in financial economics.

"It is our goal that students who graduate from Johns Hopkins with this training will find themselves better tooled with a more complete understanding of financial markets than graduates of any other university," Harrington said. "This edge will serve their personal interests, as they will be more attractive in the job market, and societal interests, as they will be better equipped to make sound economic and financial decisions."

Coursework will include macroeconomics, microeconomics, corporate finance, investments and portfolio management, and more, and will incorporate some courses currently offered by faculty members in the Department of Economics, such as Laurence Ball, Stephen Shore, and Tiemen Woutersen. When fully funded, the CFE will include four faculty members, including the endowed Carl Christ Professor, for whom an active search is under way. Christ, a professor emeritus in the Department of Economics, is an award-winning teacher and influential scholar in the field of econometrics, having written three books and more than 100 other articles and publications. Fund raising for the center is ongoing.

The Center for Financial Economics is getting its start less than a year after the university's establishment of the Carey Business School, and Krieger School officials foresee opportunities to build a complementary and mutually supporting relationship, Falk said.

Former department chair Louis J. Maccini, who led the efforts to establish the CFE, said the integration of finance and economics will benefit both research and teaching. "From a research perspective, the center will enable faculty and doctoral students to share ideas and develop new insights on how financial markets operate in the economy as a whole," he says. "From a teaching perspective, the programs will provide students with depth in both finance and economics and with breadth in quantitative and communication skills that can best be accomplished in the context of a liberal arts education in a school of arts and sciences. This training will be advantageous to students in seeking jobs in finance and more broadly in achieving an education that will benefit their lives."

Faust will teach courses at the undergraduate and graduate level that focus on financial markets and their role in the macro-economy. He holds a bachelor's degree in economics from the University of Iowa, a master's degree from Oxford University, and a doctorate from the University of California at Berkeley. An ongoing advisor to the Federal Reserve Board, Faust consults regularly with central banks throughout the world and has held visiting faculty positions at Princeton University, Georgetown University, and at the Center for Applied Economics and Policy Research at Indiana University.

Faust is widely published in scholarly journals on a broad range of topics at the intersection of finance and macroeconomics, including isolating mechanisms through which derivative securities could cause disruptions in financial markets, and documenting patterns in the high- frequency response of financial markets to macroeconomic announcements. He is currently editor of the Berkeley Journals in Macro, associate editor of the Journal of Business Economics and Statistics, and he serves on the National Science Foundation's economics panel.