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By Becky Huang and Angela Mao

[Wellesley Women in Business (WWIB) sat down with Professor Cho for a light and fun discussion of his work at Wellesley.]

2012-11-27 22.41.22   cat2   cat1

WWIB: You mentioned in your bio that your teaching objective is “to give students the necessary tools not only to think analytically about economic issues, but also to use these principles in their everyday lives.” Could you tell us your favorite economic principle that can be used in our everyday lives?

Professor Cho: I’d say the supply and demand model. It’s so beautiful because it takes five minutes to learn the model, and it works in many different markets. For example, with reference to the WSJ article on Italy, Berlusconi is gaining influence in the Italian government. He is considered destabilizing to the euros zone and the financial markets. Now that Italian bonds are more questionable, the price of bonds drops because demand drops, and interest rate goes up. Higher interest rate entails higher interest cost as the bonds are now riskier. The supply and demand model can be applied in so many different contexts.

WWIB: I understand you used to be in consulting. Could you tell us about your work experience in that field?

Professor Cho: I did Economic consulting, which I think from the point of view a recent Wellesley grad, would be a good job among many others. You will be in an environment with bright people and using economic/econometrics to address real-world questions.

I learned a lot in the year I spent consulting; but ultimately wanted to teach as I always enjoyed it as a graduate student. Besides grading p-sets and tests, teaching is by far the best job for me (Editor’s note: he gave two thumbs up for this one!).

WWIB: Could we get a personal finance tip from you?

Professor Cho: I don’t give financial advice, since I think it’s pretty difficult to pick stocks that outperform the market average. Moreover, I don’t spend time looking at corporate financial statements. Many economists subscribe to this view, and it is one implication of the efficient market hypothesis. I wouldn’t give you a stock pick. If I was to get any piece of advice, I would suggest that if you had any extra funds in the near future, you might think about putting that money in some interest-bearing asset so that you can earn a rate of return. The key is to start early, and it’s OK to start small. The earlier you start, the more compound interest is on your side. Instead of being in a checking and saving accounts, you could try something different. Personally, I did that as an undergraduate with the extra income I had from my student loans and thought of it as a learning experience.

WWIB: So, there’s no way to get any stock pick from you?

Professor Cho: Only from my cat, Munchy. (I call her this because if you look at her face, she has a munchy face!) Anyway, my cat picked a stock, PRGO, for the Financial Markets class. I don’t even know what PRGO, but it is doing very well, maybe 3rd place in the class (Editor’s note: everyone picked a stock to follow in Professor Cho’s Financial Markets class).

WWIB: Can you tell us a finance joke or two?

Professor Cho: How many financial economists does it take to change a change light bulb? One, because the earth revolves around him or her. What about this: If it ain’t broker, don’t fix it!