What is Economics?
According to the Oxford English dictionary, economics is “the branch of knowledge concerned with the production, consumption, and transfer of wealth”. Put simply, choose to pursue economics at university and this is what you’ll be studying. Arguably, economics ultimately underpins everything we humans do and studying the way in which people and markets interact can explain why people and governments act in certain ways.
Economics can be subdivided into two different categories – Macroeconomics, and Microeconomics:
Looks at Economics from a broad point of view, analysing the economic output of entire countries, their position in the international marketplace and how they allocate their limited resources to maximise production and encourage growth for future generations.
Focuses on the actions of individuals and industries within the economy; the interaction between buyer and seller, how people and companies respond to price changes and how this impacts demand, in essence analysing the parts which make up the economy.
As an economics student you’ll learn how the individual choices made (macroeconomics) impacts production and consumption levels of a whole nation (macroeconomics).
Economics in practice
Economics is a social science* and economists apply the scientific method in their research:
- They describe and measure their observations e.g. how interactions determine the price of certain products over time.
- Economists then propose an explanation for such observations, as scientists do by developing hypotheses and constructing models.
- Economists will test hypotheses and models against data from the real world.
- If the model works, and after some tailoring, economists can use it to predict future buying behaviour.
*meaning economists must use real-world data and cannot create controlled experiments in order to examine the effect of different variables.
The role of the professional Economist
Once you come out the other side of your degree, you’ll be able to use your knowledge, investigative and model-building skills to advise everything from private businesses, all the way through to the government, having a real impact on economic policy. In essence an economist serves to reduce the risk of decision making for a body, using models to predict behaviour in response to potential decisions.