American president Donald Trump has gone into tariff-slapping mode: against his country’s allies as well as presumed arch-enemies such as China – his latest target in the alleged trade imbalance row.
He is slapping tariffs on just about everything, causing ire amongst friend and foe alike. Why is he doing that?
If you knew anything about economics, you might divine that answer.
Especially in today’s world, where grains of potential profit promptly scatter on the increasingly desolate beaches of Gross Domestic Product, to be pulverised by wave after wave of corporate inversion…
As a student of Economics, you would understand the dire forecasts engendered by rising nationalist sentiment, restricted trade initiatives and even the America pulling out of the Paris Climate Accord.
Yes, economists are modelling those hypotheses even as we speak!
As you can see by the 3 instances of current and ongoing events just mentioned, economics covers far more than just the laws of supply and demand and how people spend their money.
Mainstream society perceives economics as one of the dullest, least engaging subjects to major in, let alone carve one’s life work out of.
Economics is neither sexy nor high-profile, yet it is a science vital to the progression of humankind.
Wouldn’t you like to be on the forefront of a paradigm shift where the study and application of economic theory are concerned?
First, you have to know why it is crucial that economics study be well-regarded, more widely accepted and better understood.
Understanding economic principles gives you a better understanding of the world as a whole Source: Pixabay Credit: Geralt
The first step to mainstreaming economics study would be to point out the many facets of the discipline and its impact on everyone’s daily life.
From the cosmopolitan day trader in Knightsbridge to the subsistence farmer in rural China, macroeconomics and microeconomics hold sway over everyone’s existence.
You might argue that the Londoner, being moneyed, would fare better in an economic collapse.
However, economists factor the value of scarce desirables – prestige, power, wealth and income into their models. Based on variables including those and other empirical indicators, they would conclude that the Chinese farmer would weather a global financial downturn better than a London broker.
Economics is the study of making choices.
Far more than just being accounting and quantitative analyses, economics is a social science that studies human behaviour: at the individual level, group level; corporations, communities and internationally.
Thus, the farmer whose existence depends on environmental economics – the study of land and local resources, would be subject to less disruption than the affluent Londoner, whose economic status depends almost wholly on societal perception and values.
You may fear the ponderous math involved in economics study and practice.
Indeed: you will see extensive calculus and other higher math in your curriculum, especially if you are an undergraduate, working on your Bachelor of Science degree.
A Bachelor of Arts in economics is less demanding of mathematical skills, but you must still master a sizable quantity of maths, as well as statistical analysis.
However, your degree programme’s elective courses will delve into the fascinating realm of the human psyche to help you understand why people at all levels of society make the choices they do.
On the way, you will understand yourself, and the world around you, better.
In addition to understanding the choices you make, you will gain insight into how best to manage financial affairs.
By studying economic indicators you could make sound decisions on investments and mortgages. By tracking interest rates, you will better be able to weather winds of change in global markets.
In short: you will have the edge over that impulsive Knightsbridge dweller who felt compelled to display his status, rather than secure it.
Unintended consequences of financial decisions are far greater than those of a coffee spill! Source: Pixabay Credit: Steve Pb
Recently in the news: the government of Seattle, in the U.S. state of Washington, proposed levying a jobs tax on major corporations to alleviate homelessness.
Global companies headquartered there, such as Amazon and Starbucks, were incensed!
This tax initiative caused those billion-dollar enterprises to rethink hiring expansions, and even to talk about moving out of that region altogether.
Their abandoning that city would cause economic chaos: job loss – or, at least a cap on hiring should they decide to stay, as well as loss of revenue to the city’s coffers and loss of income for individual consumers.
Those are what is known as unintended consequences.
In principle, the idea of housing every homeless person desiring a home is laudable.
However, the unintended consequence of targeting the city’s largest employers for funding signals a potential reversal of economic growth for the city as a whole.
Likewise, economic issues post-Brexit are direly forecast: the uncertainty surrounding current negotiations might result in the UK not having a free-trade agreement by the date England’s departure from the conglomerate.
Wouldn’t you, as an economics major, jump at the chance of formulating an economic analysis of such a scenario, including economic problems our country would face if Scotland and Northern Ireland voted to remain as members of the European Union?
You might say that broader job requirement of the economist is to build models that uncover unforeseen consequences of political and financial decisions and help to find ways around them.
If your graduate study takes you into that wide range of economic research, you would have job security for life!
Far from the stereotype of tweed-wearing academics sporting eyeglasses, the economics degree holder may branch out into any of several career fields:
finance and banking
politics and public policy
sales and marketing
insurance and actuary
If office work does not appeal to you, you might continue your studies, completing your postgraduate work in political science, business economics or specialising in market research.
All of those adverts that pop up on your phone or tablet are a direct result of such research!
You may work abroad, using your knowledge of development economics, to compile statistics for firms wishing to invest in those countries’ growth.
Or, you might want to stay close to home and focus on labour economics – a hot topic just now.
Why is there such a pay gap between genders? Why do workers stay for years in unsatisfying jobs instead of seeking out what they would really like to do – like you’re doing?
And what economic factors go into making such choices?
Or you may select econometrics as your career vehicle of choice. Wouldn’t you like to sift through mountains of data to define simple relationships?
Then, being well-versed in economic principles and using applied economics, you could try to predict the outcome of real-life situations, such as the looming trade war and its true global economic impact.
Studying economics gives ample food for thought as well as introspection Source: Pixabay Credit: Dana Tentis
Confession time: prior to researching and writing this series of articles, I too was a true believer in economics being the academic world’s most boring field of study.
I not-so-seriously wondered: who could make a profession out of studying principles of economics and applying them to, say, the job market?
Now, having weathered a recession or two – not ageing myself here!, having travelled the world and seen abject poverty firsthand, and being of an analytical mindset anyway, I most certainly can see the value in studying economics.
Not that I would give up being a writer, but I would go so far as to say that, had I known then what I know now, I might have pursued economics courses.
For undergraduates wondering what school of study to apply to: please learn from my experience.
Shunning the study of economics because of a stereotype means denying yourself a wide variety of potential career fields, a deeper understanding of how the world works and the ability to discern fundamental machinations of society as a whole.
Many, if not most of the world’s most significant problems have an economic dimension – quoted from the Washington University Department of Economics home page.
From income disparity in developing nations to gender disparity in the field of economics itself: so few women choose this major! the sheer variety of study topics is astounding.
Indeed, this is a field of study wherein, once you scratch the surface, you will want to delve deeper into it, possibly hopping from one subspecialty to the next to find the one that you will wholeheartedly sink your teeth into.
Are you now eager to prepare in joining the wave of economists who themselves are creating waves: in public policy, in finance and in business; in global initiatives and in everyone’s quality of life?
Or do you just really want to understand why Mr. Trump seems to be provoking both enemies and allies?
Either way, majoring in economics would prod you to… maybe not the answers you seek, but an understanding of the underlying motivations that cause such disruptive situations and social ills in general.
See a guide to A Level economics here.
Understand the A Level syllabus here.
Look at the best revision materials for economics here.
Access past papers for economics exams here.