Many parents settle for Economics as a non-science field of study for their children. Students too claim that they are aiming for a “career in Economics”. But Economics is not a professional course and there are no entry-level jobs for “economists”. It is a Social Science subject just like Physics or Biology are Science subjects and can at best be a gateway to some work fields. Here is a quick primer on Economics and the pathways it opens.
What is Economics?
Economics analyses the behaviour of people, institutions and countries to create models that measure and predict optimal prices, actions and outcomes in almost any situation. Some tools of economic analysis include price, demand, supply, opportunity cost, marginal utility and assumptions.
An economist’s way of thinking can help one structure almost any decision by putting important factors, stakeholders and options in a neat model. This approach can be used for just about anything: building a house, planning a party, investing in stocks or even writing a movie script.
Fields of specialisation
Economics is a highly academic subject and, to be considered an “economist”, one needs to do a doctorate. Typically, undergraduate courses do not require you to specialise, but here are some of the broad fields that you may consider if you hope to be an economist.
Microeconomics studies the action of individuals and firms to determine prices, production, and consumption in single markets. Demand and supply, game theory, monopolies, oligopolies and nudge theory are some highlights of this field.
Macroeconomics studies the interactions of institutions like governments, banks, countries and corporations. It predicts and optimises economic output, inflation, interest, foreign exchange rates, and trade.
Development Economics analyses the impact of policies, schemes, subsidies, and world events on developing and low-income countries. The goal is to advise governments, banks and institutions to develop policies and schemes that create the fastest or most equitable growth. Leading research areas are poverty, inequality and growth theories.
Econometrics applies statistical tools and models to analyse data to test and optimize models and relationships between economic factors.
A simple analysis may be the impact of price changes on demand across brands, products and regions. A more complex analysis may be the impact of offering free education on employment and wage levels in the country.
Behavioural Economics combines elements of economics and psychology to understand and predict real human behaviour. Are people more likely to donate money for education or healthcare? When does a monetary incentive motivate people compared to an emotional incentive or disciplinary action?
Career options
Investing and Finance: Finance professionals swear by a background in economics when it comes to understanding the factors impacting the value of a company or product, and in making and using models for decision-making. Courses in Finance, Risk Management or even Data Analytics help build a career as investment analysts or investment bankers. With cryptocurrencies and blockchain changing the face of financial transactions, micro-economists will find many growth opportunities.
Data Analytics: Econometrics training is very useful in data analysis careers especially in policy making, think tanks, finance and investing. Several undergraduate courses combine Economics with Data Analytics to analyse data to create results across government, fintech, marketing or even technology careers.
Government and Policy Making: Economists with advanced training in macroeconomics, development economics and international economics are well equipped to use these skills for careers as policy makers and economic analysts working with governments, think tanks or multilateral organisations like the World Bank, IMF or WTO.
Academics: Economics commands the fastest-growing research budgets across universities and governments since the research often uses real data to highlights issues and propose solutions to current and proposed policies.
Business: Economists are equipped to plan pricing strategies, advertising and marketing strategies as well as to write to please the media. A degree in Economics combined with a business degree would open all management careers.
The writer is founder and CEO, Inomi Learning, a career and college guidance firm. info@inomi.in
