A PhD prepares you to do independent research at the frontier of what economists know. In fact, a key requirement for earning a PhD is that your dissertation provides new knowledge that moves out the frontier of the profession.
A PhD is required if you want to do research and teaching at a university. For many top jobs in government, at consulting firms, or large companies, a PhD is required.
PhD vs MA? Top PhD programs are typically free because they offer their incoming class TA-ships (sometimes RA-ships) and a small stipend for 4-6 years. (Note: MA programs typically do not provide financial support).
There is no specific timeline for earning a PhD. You will earn a PhD when you complete the coursework, pass the qualifying exams and complete a dissertation. A PhD typically takes 5-6 years to complete with 80% of programs requiring 50-60 hours of studying per week according to the AEA. MA programs are typically either a 1 or a 2 year program.