What is the difference between talking about economics and studying economics

There are careers that use specific knowledge of economics, for example banks, insurance, accountancy firms, businesses and in government. These jobs may involve identifying financial risks or making decisions about where a company or a government should invest its resources in the future, or even how to design a bidding platform for eBay. There are also roles for economists in think tanks and consultancies that advise governments and companies on public policy, such as how to deal with the Greek debt crisis.

More broadly, an economics degree helps prepare you for careers that require numerical, analytical and problem solving skills — for example in business planning, marketing, research and management. Economics helps you to think strategically and make decisions to optimise the outcome. Especially in demand are people who have studied Economics and Finance as they are particularly well-prepared for jobs in banking and the financial sector, such as in accountancy firms.

The well-developed methodologies used in the economics profession have helped the subject expand into providing tools for other disciplines, such as politics, law, health, education, management, and many others. Some worry that by using the approaches of economics, the assumption is being made that people are rational in the way they behave. To counter this, economists are bringing in insights from behavioural science, psychology, and neuroscience. This is a new field and is about analysing large volumes of data to identify patterns, and so help businesses or governments make better decisions.

Economics plays a role in our everyday life. Studying economics enables us to understand past, future and current models, and apply them to societies, governments, businesses and individuals. To understand why the study of economics is important, we first need to understand what economics is. Considered a social science, economics uses scientific methods to understand how scarce resources are exchanged within society. So, why is economics important? This inquiry into cause-and-effect relationships is key to influencing economic growth.

Economists will look at risks and benefits on people, the job market and society as a whole when advising how to allocate resources. There are many different areas of economics you can study.

You can look at these at macroeconomic large-scale or microeconomic individual levels. Applied economics is the term used to describe how economic theories can be applied to real-world situations. This looks at everything from costs and benefits to predicted human behaviour to make an informed decision.

Economists provide information and forecasting to inform decisions within companies and governments. This knowledge of economics — or economic intelligence — is based on data and modelling. Economic issues influence our daily lives. This includes issues such as tax and inflation, interest rates and wealth, inequality and emerging markets, and energy and the environment.

A broad subject, economics provides answers to a range of health, social and political issues that impact households and wider communities. Likewise, many of those employed by commercial banks, insurance companies, and other financial service providers have college backgrounds in finance. Apart from the finance industry itself, a degree in finance can be a pathway to senior management of companies and corporations.

Finance involves assessing the value of financial instruments, such as the determination of fair value for a wide range of investment products. Finance includes the use of stock-pricing models like the capital asset pricing model CAPM and option models like Black-Scholes.

Finance also includes determining the optimal dividend or debt policy for a corporation or the proper asset allocation strategy for an investor. It can also be argued that finance affects the markets with a seemingly constant stream of new products.

Although many derivatives and advanced financial products have been maligned in the wake of the Great Recession , many of these instruments were designed to address and solve market demands and needs. For example, derivatives can be used to hedge risk for investors, hedge funds, or large banks, thus protecting the financial system from harm in the event of a recession.

Economics takes a more theoretical look, while finance is more applied, however, both are connected disciplines, with some overlap. Economics is a social science that studies the production, consumption, and distribution of goods and services, with the aim of explaining how economies work and how people interact.

Although labeled a "social science" and often treated as one of the liberal arts, modern economics is in fact often very quantitative and heavily math-oriented in practice. There are two main branches of economics: macroeconomics and microeconomics.

Macroeconomics is a branch of economics that studies how the aggregate economy behaves. In macroeconomics, a variety of economy-wide phenomena are thoroughly examined, such as inflation, national income, gross domestic product GDP , and changes in unemployment. Microeconomics is the study of economic tendencies, or what's likely to happen when individuals make certain choices or when the factors of production change.

Just as macroeconomics focuses on how the aggregate economy behaves, microeconomics focuses on the smaller factors that affect choices made by individuals and companies. Microeconomics also explains what to expect if certain conditions change. If a manufacturer raises the prices of cars, microeconomics says consumers will tend to buy fewer than before.

If a major copper mine collapses in South America, the price of copper will tend to increase, because supply is restricted. Macroeconomics can be applied in tracking GDP, inflation, and deficits to help investors make more informed decisions.

Microeconomics could help an investor see why Apple Inc. Microeconomics could also explain why a higher minimum wage might force a company to hire fewer workers. When economists succeed in their aims to understand how consumers and producers react to changing conditions, economics can provide powerful guidance and influence to policy-making at the national level.

In other words, there are real consequences to how governments approach taxation, regulation, and government spending; economics can offer insight and analysis regarding these decisions. Economics can also help investors understand the potential ramifications of national policy and events on business conditions. Understanding economics can give investors the tools to predict macroeconomic conditions and understand the implications of those predictions on companies, stocks, and financial markets.

For those who choose to pursue a career in economics, academia is an option. Academics spend their time not only teaching students the principles of economics but also researching within the field and formulating new theories and explanations of how markets work and how their agents interact.

Economists are also employed in investment banks , consulting firms, and other corporations. The role of economists can include forecasting growth such as GDP, interest rates, inflation, and overall market conditions. Economists provide analysis and projections that might assist with the sale of a company's product or be used as input for managers and other decision-makers within the company.

Economics can be used by market participants to help understand the causes and likely outcomes of market events and the impact on various sectors, companies, and the overall business cycle. The applications include understanding how changes in national income, inflation, long-term economic growth, and interest rates impact the markets and ultimately stocks. An important area of focus for economists is determining how changes in monetary policy by central banks like the U.

Federal Reserve can impact the economy, both in the U. Financial Analysis. Career Advice. Your Privacy Rights.