Dear all,
I have recently completed the first draft of my statement of purpose for a Phd in Economics (~700 words).
For privacy reason, I deleted some names. Here's the question prompt:
1. Please state your purpose in applying for graduate study.
2. Please state your particular area of interest.
3. Plans for future occupation.
4. State other relevant materials.
Please take a look and comment on the SOP below and feel free to have comments.
Regard,
ytam1
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Economics is a mixed subject. At times it looks intuitive - even a layman knows the price of a commodity rises if there is a shortage; Yet it is also profound - not even the brightest minds can precisely determine the optimal resources allocation among countries. This intriguing nature motivates me to pursue a doctoral degree in economics. My objective is to study, in a rigorous and systematic manner, seemingly instinctive economic phenomena that would pave my path to work on unsolved problems, particularly in the field of macroeconomics and financial markets.
With this objective in mind, I studied economics and mathematics in college, during which I encountered professor X's course in mathematical finance. In the course, I learned the simplest version of the capital asset pricing model, applied it to thirty randomly chosen large-cap stocks, and concluded that it alone could not adequately explain the variations in stock returns. Although the result merely confirms the literature, it marked the first time I applied economics theory with data, and more importantly, it inspired my research interest in the financial markets. I later worked on an independent project, under the guidance of professor X, on the distribution of stock returns. By using computer simulations and intraday data, I found that a random mixture of Gaussian distributions could produce the non-normality of high-frequency stock returns. These projects reaffirmed my interest in the field, but, at the same time, I was eager to relate them to a broader context in macroeconomics and monetary policy.
For this reason, I have been working at the Federal Reserve Bank of Z as a research associate upon graduation in summer 2007 when the economic crisis began. The timing was perfect - because of the financial meltdown, a large fraction of my research projects at the bank was to relate the collapse in financial markets to the downturn in the boarder economy. The topic of these projects ranges from lending standard of subprime mortgages, their prepayment behaviors, to studying stock market liquidity, forecasting real outputs and equity returns, and their implications on monetary policies. In a project with professor Y for a policy meeting, I studied the effect of house price on inflation using vector autoregression, in which financial state variables such as term spreads are used as control. My forecast showed that a collapse on house price may not moderate inflation. This experience not only showed me a way to incorporate information from the financial markets into macroeconomic research, it also benefited me in technical aspects - gathering and cleaning data, reviewing literature, setting up formal models for estimation, and performing statistical tests, all of which are essential for graduate study.
Additionally, these projects reflected and shaped my attitude towards research. At one point, my research topic was to study the effect of uncertainty on economic models, which assumes randomness cannot be expressed in a definite probability distribution. The topic therefore inherently involves measure theory, a subject I had no prior exposure on. While I was given choice to defer the study, I chose instead to embrace it by taking relevant classes, even though a full-time workload of research duty is maintained. The implication of this experience is twofold. First, it provoked my interest in the topic, for I believe that uncertainty may play a significant role in the breakdown of some markets in the recent crisis. Second, it shows I had the dedication to successfully performing research in uncharted area, which is essential for studying at an advanced level.
I would like to join the University J's community, not only because of its nurturing and vibrant atmosphere, but also because of the world-class research environment and renowned doctoral program that excels in macroeconomics, monetary theory, and economics of uncertainty and information. In particular, I am interested in the effect of uncertainty on the economy and capital markets, and also in its implication on monetary policies. I am certain that the ample resources provide by the program, and the rigorous quantitative and analytical methodologies directed by University J's leading faculty will well equip me to succeed as a researcher.
Upon the completion of my degree, I plan to stay in the academia. After five years of studies at University J, I will be well equipped with tools and insights to engage in the frontier of both empirical and theoretical economic studies, and I intend to remain in an environment where productive and creative research is the most likely. In addition, it is important to pass on my knowledge to later students, for I believe some problems requires generations of people to breakthrough. University J is the ideal place to begin.
Yu Man Tam
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