Choosing to Study Economics
We make economic decisions every day of our lives. Studying Economics helps us to understand those decisions, and better equips US for making the best of our lives.
What do economists learn?
Economists learn about the workings of the economy and about economic policy. They also study the way in which individuals, firms and governments make economic decisions. But economics is about much more than that! As you study economics, you will acquire skills and discover concepts that can be applied in many areas of life. Here are some examples:
- The notion of scarcity is at the heart of the study of economics. Choosing one course of action is often at the expense of an alternative. The economist’s concept of opportunity cost captures this, and is applicable in many decisions that we make.
- Economists also study the way in which people’s behaviour and decisions are shaped by the incentives that they face. By designing appropriate incentives, people’s decisions can be influenced. This may be especially important when formulating corporate policy.
- In many situations, the outcome of decisions represent a balance between competing forces. Economists are well-practised at recognising such equilibrium positions, and at exploring the consequences of imbalance (disequilibrium). For example, insights can be applied to stock market or labour market behaviour.
- Strategic interaction between rivals is a common feature of economic life; there is a branch of economics known as game theory that analyses strategic interaction between decision makers.
- Economic decisions are made under conditions of uncertainty because we can never predict the future. Economists are aware of this, and that people must form expectations about the future in order to make rational decisions.
Studying economics will also provide you with more general skills, encouraging independent thinking and nurturing numeracy, computing and IT skills.
What do economists do?
Because of the importance of economic decisions to many organisations, well-trained graduate economists are in high demand for a wide range of occupations. The skills that you will gain during an economics degree programme also add to your employability. Here are some examples of careers followed by economists:
Economists in government
The government needs to employ economists in many different departments. For example, the UK government employs more than 600 people as economists in 30 departments and agencies.
Economists monitor the performance of the economy, and of particular sectors. The design of economic policy would not be possible without the work of trained economists. This includes policies that affect the overall running of the economy (macroeconomics), for example, policies to influence the rate of inflation, of unemployment or the competitiveness of goods in international markets. Microeconomic measures are also needed to ensure that individual economic decision makers (producers, employers, consumers and employees) face appropriate incentives.
Policies need to be taken in the context of economic forecasts, which enable policy makers to anticipate problems that may be encountered in the future. Economists are needed to produce reliable forecasts of such future developments.
The Bank of England is an important employer of economists in the UK, but commercial banks and other financial institutions in the City also need economists to enable them to operate effectively. The Bank of England has the responsibility of setting monetary policy, independently of the Treasury. It thus has a team of economists working on forecasting the economy and designing appropriate measures to influence inflation in particular. In other countries, you will find similar openings for well-trained economists.
Economists in industry
Large private companies are other major employers of economists, engaged in market research, econometric forecasting and strategic decision making.
Indeed, in almost every area of the economy, we find economists at work. Not everyone who takes an economics degree becomes a professional economist — but the subject-specific and general skills acquired make them attractive as employees.
Why study Economics at postgraduate level?
Universities in the UK offer a wide range of Masters degrees in economics and finance. These programmes allow you to develop your skills, knowledge and understanding of economics to a deeper and broader level. Such programmes further enhance your earnings potential, and equip you for undertaking economic research — perhaps at doctoral level. There is great demand for economists with a Masters degree — especially those with statistical and econometric components.
Who would make a good economist?
If you have a lively interest in how the world works — and you have an enquiring mind with the capacity for analytic thought — then there is the potential for you to become an economist.
The universities to which you apply to study economics will want to know that you can fulfil these requirements. They may not mind whether or not you have ever studied economics, but they will want to know whether you are able to adopt an analytic approach. Some may insist you have studied mathematics to A-level (or an equivalent standard), as maths is an important tool of the economist. Others may look for evidence that you have studied an analytic subject.
And finally …
Studying economics offers a fascinating challenge. It can equip you for life, and enhance your employability.
Peter Smith, Editor of The Economic Review & Senior Lecturer of Economics at the University of Southampton