Economics is normally divided into two overarching fields: macroeconomics and microeconomics. The former looks at government monetary and fiscal policy, with an eye toward economic growth, the level of employment, inflation, and so on. This big picture view stands in contrast to microeconomics, which focuses on the behaviour of individuals, households, and firms. In microeconomics, price theory is central. Microeconomists have tended to study how prices are established, how they change, and how people and firms respond to such changes.
This description of the field, however, does it an injustice. For one thing, it hardly gives a sense of the range of what economists now study. Many years ago, a well-known economist said that ‘economics is what economists do.’ This is a vague definition, to be sure, but it usefully suggests that the focus of economics tends to change. This has certainly been true in recent years. Once Gary Becker (later to win a Nobel Prize) started studying subjects like discrimination, marriage, and human capital from an economics perspective, all bets were off. Virtually anything could be (and probably now is) studied by economists.
For another, it makes economics sound like an ivy-tower pursuit: economists, at one or more levels of remove from reality, performing analyses that might inform policy-makers’ judgments about whether to increase interest rates but would hardly be applicable to real-life people and firms. That is far from the case. Nowadays, economists don’t just opine about whether a country’s trade deficit is sustainable. They are more likely to be employed by a firm that is trying to decide how to set prices for dozens of products in as many markets or by an insurance company trying to determine how much sooner their policies will pay out if more and more policyholders become obese.
Numerous substantial trends continue to drive this field, including:
• The increase in computing power (which allows more involved models, using more and more data, to be run).
• More data becoming available as more economic activity is measured.
• The mining of psychology for insights into economic (or social) behaviour (ie the developing field of behavioural economics).
• Using game theory to solve problems in microeconomic fields.
• Applying economic techniques and thinking to an ever wider range of topics.
Economics degrees come in all shapes and colours. Many courses, especially in the UK, are designed to fit both those with strong economics and quantitative backgrounds and those without. Thus, those without a strong background can enrol for a two-year program, successful completion of the first year of which qualifies them for a diploma as well as entry into the second year. Those with a suitable background can simply enrol in the second year of the course, skipping the diploma year (called a ‘pre-master year’ elsewhere) altogether.
The staggering number of universities offering masters degrees in economics – along with the many variations on a theme at places – mean that candidates are spoiled for choice. Many economics courses emphasise financial economics, making an economics degree a close substitute for a finance degree.
In the past, a typical program would require a degree in economics, or in a closely related discipline – ie one that included a substantial portion of economics, such as finance. Increasingly, however, many universities are giving short shrift to the economics background of applicants in favour of their quantitative background. Thus, those with mathematics or physics degrees are sometimes preferred to those with economics degrees. At programs that are not so mathematically orientated, some calculus and statistics coursework is generally required, perhaps to the level of multivariable calculus and introductory econometrics.
Many programs also look for:
• Micro- and macroeconomics to intermediate level or higher
• Some programming ability
• linear algebra coursework
For students interested in real world economics rather than the theory of economics, a masters program in applied economics is the ideal choice. Applied economics looks at economics in relation to real situations, applying economic theories and principles to these real world situations. In contrast to masters in economics, the coursework of a masters in applied economics will focus more on method and application than on theory and proofs. There are various good options for studying applied economics at postgraduate level, for example the University of Bath offers an MSc in Applied Economics in which the student chooses from a selection of modules depending on what area of applied economics they want to specialise in. The pathway choices on this course are Banking & Financial Markets, Public Policy, Environmental Policy, and Behavioural Science. Meanwhile the University of Strathclyde offers an MSc in Applied Science where students can specialise in Fundamentals of Business Economics, International Trade & Policy, Games of Strategy, Environmental Economics, and Energy Economics.
An MBA in economics will usually take one year to complete on a full-time basis. There will be a selection of compulsory modules that all students will have to successfully complete, as well as a selection of optional modules to choose from. Compulsory modules will usually include Organisational leadership; Financial accounting; Financial management; and Marketing. Optional modules that students can choose from will probably include: International business; Microeconomics: Macroeconomics; Economic forecasting; and Econometric methods. Aarhus University in Denmark offers an MBA program with a strong focus in Industrial Economics which is a great choice for those interested in modern business management.
A PhD in Economics enables the student to delve deeper into this subject and choose a particular area of interest to research in greater depth. Studying this postgraduate course will advance a student’s business career as well as stand them in good stead for a career in academia.
Loughborough University offers a PhD in Economics as well as an MPhil in Economics – the PhD takes 3 years full time or 5 years part time to complete with the MPhil taking 2 years full time and 3 years part time. This PhD program is based on students spending the 3 (or 5) years undertaking individual research and is taught within Loughboroughs’s School of Business and Economics. As part of the program there is a weekly research seminar for the PhD students and they are also required to make presentations on their research.
The University of Birmingham also offers a PhD in Economics that takes 4 years to complete full time (3 years of the student has already completed an MSc at Birmingham Business School) which is only on offer as a full time program with a September start date. It is compulsory for all students to take the Research Methods in Economics module and in their first year they must also complete a literature survey and prepare a research proposal. Students on Birmingham’s PhD in Economics need to meet with their supervisor at least once every four weeks.Visit our BUSINESS STUDY ZONE
The days when economists generally worked for central governments or universities are long gone. The range of potential employers is staggering: economic and management consulting firms, central banks, international organisations, commercial and investment banks, government agencies, insurance firms, local governments, think tanks, non-profits/not-for-profits, real estate firms/estate agents, pension funds, and so on. The tools and methods economists learn are widely applicable indeed. In fact, given that many people who study economics end up taking jobs in finance, the ‘Finance’ career discussion is also highly relevant.
• Economic consultant
• Management consultant
• Financial analyst
• Competition analyst
• Pricing associate
• Distribution analyst
See also the starting titles of those with finance degrees insofar as an economics degree (especially if done with a finance focus) can be a ready substitute for a finance degree.
N Gregory Mankiw has written a whole host of introductory texts, any one of which would be a good choice. His Principles of Microeconomics (Thompson South-Western) is an elegant treatment of microeconomics. Other of his books cover macroeconomics or both micro and macroeconomics. A strong alternative is Paul Heyne et al’s The Economic Way of Thinking (Prentice Hall). It covers both micro and macroeconomics, although it is much stronger on micro.
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