What is the role of an economist? What do they do on a day to day basis?
If you’re thinking of becoming one, you might want to have a look at these insights:
Table of Contents
- An economist provides analytics with possible outcomes of scenarios for people to make decisions and enhance their chance to succeed in life
- An economist is a person who monitors the national economy
- Within a firm, an economist measures marginal cost, and marginal revenue per unit of production
- Data guys
- Economists conduct research by collecting and analyzing data on production, inflation, interest rates, and the likes
- Economists are employed in myriad jobs
- Frequently Asked Questions
Dr. Tenpao Lee, Ph.D.
Professor of Economics, Niagara University
An economist provides analytics with possible outcomes of scenarios for people to make decisions and enhance their chance to succeed in life
A few examples are:
The trade issue between China and the USA
President Trump proposed tariffs against China. Fundamentally, this will hurt imports from China.
However, a) imports from China may be a part of US exports and therefore hurt US exports in the global economy; b) the tariff may actually be paid by the American consumer if Chinese imports are not elastic in the short term (cannot find an alternative quickly); c) China may retaliate to hurt US exports to China; d) China may devalue its currency (RMB) to weaken the effect; and e) this policy is fundamentally against the values of the USA, i.e. free economy/trade.
As a result, there are so many factors that are beyond President Trump’s control to make this policy work. Will the tariff policy achieve President Trump’s goal or not? Nobody knows.
What we know is both China and USA will be hurt and recession is likely in the short term as we know trade/trade restrictions would benefit/hurt both countries.
Of course, current global supply chains will be interrupted and President Trump offers a chance to develop new global supply chains and China will re-evaluate its strategy of its role in the global economy with structural adjustments.
President Trump has complained that the Federal Reserve Bank should continue lowering the interest rate
The policy of lowering the interest rate, such as QE1, QE2, and QE3, will help a business grow, but hurt retired people and savers.
In reality, many businesses have borrowed more, and use the money to buy back their own stock rather than invest more to enhance their production. As a result, the stock market is doing good and earning per share have increased.
Moreover, the Fed may be running out of weapons if a recession or unexpected slow down happens. Therefore, the policy of a lower interest rate may or may not achieve its goals as Economists have learned from economic textbooks.
Economic goals may be contradictory to each other and cannot be achieved simultaneously
For example, you cannot have economic growth, lower inflation, and environmental protection together. A nation cannot have free capital flows, independent monetary policy, and a fixed exchange rate simultaneously.
Therefore, economic policy is virtually a value judgment (a choice) and an assessment of the overall net effect of the economy. As an economist, your job is to provide a comprehensive analysis of all positive and negative outcomes and let policymakers make the policy decisions.
Paul J. Morrow, Sr, Esq.
Associate Professor in the School of Business and Management, Husson University’s College of Business
An economist is a person who monitors the national economy
In a business setting, an economist works within the corporation at a variety of levels including estimating efficiencies and helping to determine what levels of production that are the most profitable. An economist at the macro-level measures gross domestic product (GDP), inflation, wage-price stability levels and more.
In addition, an economist determines whether the national economy is in a recession or economic expansion and provides guidance with recommendations regarding the health of the economic activity. This can be for a corporation, an individual country, and other global economic organizations.
In these modern economic times, an economist is very concerned with the activity of the Federal Reserve Bank regarding interest rates and the money supply. That’s because there is a virtual one to one correlation between the actions of the Federal Reserve Bank and the responding GDP of a nation.
Within a firm, an economist measures marginal cost, and marginal revenue per unit of production
The economist also helps determine the optimal level of price for a product within an economic market. He or she is constantly measuring and forecasting supply and demand at the per-unit level as well as the market level to determine optimal levels of productivity. This provides insight into employment.
Overall, the economist is indispensable to governments, businesses, and international deliberations. The peace and stability of a nation often depend on their economy. The profitability of the corporation depends on efficiency.
The economist is a professional who provides the kind of advice needed for countries and corporations to grow and prosper.
Economist | Managing Partner, John Dunham and Associates
I’ve been an economist for over 30 years, and have a wide range of different jobs in the public, private and non-profit sectors. While all of them have had different focuses, over the years I have found that there are 4 types of economists, each of which has a very different type of job. These are:
These folks teach economics to others (mainly folks who don’t want to learn economics) and do obscure research and write papers that nobody can decipher.
Most economists working for the government I call “data guys.” These economists collect, maintain, and analyze data about a specific commodity, country, market, etc.
For example, if you want to know everything about the milk market, you need to find the milk economist at the Department of Agriculture, or if you want to know everything about sales taxes in New York City, you have to find the sales tax economist at the Office of Management and Budget.
Once you do, they will impart untold knowledge about their specific topic. I would include chief economists at companies and trade associations in this category.
There are fewer and fewer macroeconomists working for banks, large trading companies, or certain consulting firms who specialize in forecasting the future. This is probably because most economists have the same orthodox views so their models really don’t differ by much.
Forecasters are the wizards that are seen on TV all of the time or quoted in newspapers pontificating about what the Fed is going to do next or how many jobs will be reported in the next Jobs Report.
Storytellers come in two types. First, the traditional old school economists like Adam Smith or Karl Marx or Alfred Marshall who develop and write about big-picture stuff. The way that we think about economics is a result of the theories developed by these storytellers. The other type of storyteller works for consulting firms, lobbying firms, or think tanks.
Their job is to develop stories around how specific markets or economic factors are impacted by all of the things happening in the world. These economists build models that look at micro-level issues – how will a tax impact sales, or how will a regulation impact job – and come up with a way to document and describe these impacts.
In the end, very few economists cross the lines between these four types. Sure there are professors who do consulting or forecasters that tell stories, but in the end, what an economist does on a day to day basis depends a lot on what type they are.
That was a question I started asking into my third course in my economics major in 1973.
Economists tell you what went wrong after it happened and how to prevent it in the future.
I had an intuition back then that businesses and investors sorely needed the means to anticipate major cycles in the economy – as their overwhelming tendency was to over-invest at the top of a cycle and under-invest at the bottom to their peril and to the economy.
Obviously, there are such cycles like the sun coming up in the morning or our annual seasons – so, there must be a cause behind them.
I quickly learned that economists were not in the prediction business – and lived in a more theoretical world. No one could understand them and they got so caught up in the complexity of endless indicators that they missed the obvious, “the forest for the trees.” And the worst most had no sense of humor.
So, I changed my major to business and ended up taking everything from manufacturing to marketing to accounting to finance to management to strategy. I went to Harvard Business School and then consulted to Fortune 100 companies at Bain & Company. I learned a lot about real-world business cycles.
But the big insights came when I started consulting to entrepreneurs. Ah, they were the ones creating the future. They were catering to the then young, innovative Baby Boomers. So, I had to study that generation and its new trends…
Long story short, through my real-world consulting – and much intense research on the side (that 10,000 hours of immersion from the Outliers book), I came up with a whole, a new methodology for forecasting the future – starting with the predictable things consumers do from cradle to grave in totally projectable generational cycles.
I found what I originally intuited: Our economy is far more predictable than we’ve been led to believe. The secret was that it’s the longer term that is most easily predictable – and that’s where the most important trends are
What do I do now: I help people see the predictable trends that will impact your life and family, your business and investments, over the rest of your lifetime… exactly what economists say no one can do!
I became an entrepreneur, not an economist.
And what does the chief economist at the Federal Reserve do now? Exactly what Donald Trump tells him to.
Mark Anthony Grimaldi
Economist | Co-Founder, Grimaldi Portfolio Solutions | Author, RetireSMART!
Economics is the study of the production, consumption, and transfer of wealth. There are two branches: Microeconomics studies economics at an individual, group, or company level. Macroeconomics studied national economies as a whole.
The broad discipline of economics helps societies understand historical trends and make predictions about what will happen to production and wealth in the coming years.
Economists conduct research by collecting and analyzing data on production, inflation, interest rates, and the likes
They use this research to monitor economic trends and forecast a range of issues, such as energy costs, exchange rates, business cycles, and employment, among others.
Typically, economists have bachelor’s degrees or higher in economics (with doctorates typically required for academic or government jobs). They have heavily quantitative backgrounds and use them to develop and apply mathematical models and statistical techniques. They also understand human and corporate behavior, so may have studied psychology and organizational behavior.
Economists are employed in myriad jobs
They may work directly for the government, looking at the effects of tax cuts, budget deficits, and welfare policies. They can also be government advisors, where they are employed by research firms and think tanks. They may be university professors, where they conduct research and train the next generation of economists.
They are also private-sector employees, working for investor advisory firms, consulting firms, and any other kind of company that if affected by the direction of the economy. In private sector roles, economists may analyze consumer demand and sales to help a company maximize its profits.
Economists’ contributions inform everything from household decisions to public policy, affecting our society’s health, education, environment, and immigration policies, and much more. As a practicing Economist for over 30 years, I always like to say “Every major decision in your life involves economics.”
Managing Director, DecisionBoundaries
The field of economics is a very wide social science concerning such disparate subjects as poverty reduction, healthcare policy, financial economics, and decision-making. But this one broad range of disciplines can be synthesized in one definition:
Economics is the science of scarcity and is concerned with how to best allocate those limited resources.
Over the last three decades, the economic sciences have moved to ever-higher specialization. While all Ph.D. level economists have a solid understanding of micro and macro-economics, the output of the monetary policy researcher is hard to follow by the urban policy economist and vice-versa.
Even though our work may seem arcane to most people (mathematics have played an increasing role in economic research since the adoption of physics research methodologies in the 1980s), we all do exactly the same:
We try to figure out ways to maximize a desirable outcome (ranging from corporate profits to national health), given a fixed resource constraint.
Frequently Asked Questions
How do I know if economics is right for me?
Deciding if economics is the right field for you can be difficult, but there are a few things you can consider to help you make that decision:
Interest in economics: Do you enjoy reading about economics and following business news? Are you interested in understanding how the economy works and how economic decisions affect people and society? If so, then an economics degree might be just right for you.
Strengths in math and data analysis: Economics involves a lot of quantitative analysis, so a solid foundation in math and statistics is essential.
Critical thinking skills: Economists must be able to analyze complex information and develop logical arguments based on their findings.
Communication skills: Economists must be able to clearly communicate their findings and recommendations to policymakers, stakeholders, and the general public.
Career goals: Consider what kind of career you want to pursue. Do you want to work in academia, government, nonprofit organizations, or the private sector? Different careers require different skills and qualifications.
The best way to find out if economics is right for you is to explore the field through coursework, internships, or informational interviews with economists or other professionals in the field.
Talk to people who work in the fields or industries that interest you and ask them about their experiences and what they like about their work. This will help you determine if economics fits your interests, skills, and career goals.
How has globalization affected the field of economics?
Globalization, which refers to the increasing interconnectedness of economies and societies around the world, has had a significant impact on economics. In fact, it has become one of the most discussed topics in the field.
This has led to an increase in international trade and the spread of ideas and technologies across borders. As a result, many countries have been able to significantly increase their economic growth and development.
However, globalization also has its downsides. For example, it has led to increased competition between countries, in some cases resulting in the displacement of workers in certain industries.
In addition, some critics argue that globalization has contributed to income inequality, often leading to greater economic benefits for the wealthy.
Despite these challenges, many economists agree that globalization has had a positive impact on the world economy. Facilitating the free movement of goods, services, and capital across borders has promoted economic growth and development in many countries.
At the same time, however, policymakers must be careful to ensure that the benefits of globalization are distributed equitably and that those negatively affected by its impact receive the support and assistance they need to adapt to the changing economic landscape.
What courses go with economics?
Economics is closely related to many other disciplines, and many courses can complement an economics degree or career. Here are a few examples:
Mathematics: A strong foundation in mathematics is essential for a degree in economics. Courses in calculus, linear algebra, and statistics can help you develop the quantitative skills needed to analyze economic data and models.
Political Science: Economics and political science are closely related because economic policy is often influenced by political decisions. Courses in political science can provide insights into the political and social contexts that influence economic outcomes.
History: Economic history provides an important context for understanding contemporary economic issues. Courses in economic history can help you understand how economic systems and institutions have evolved over time.
Computer Science: As economics becomes increasingly quantitative and data-driven, knowledge of programming languages such as Python or R is a great asset. Courses in computer science can help you develop these skills.
Environmental Science: Environmental economics is a growing field that explores the relationship between economic activity and environmental sustainability. Courses in environmental science can help you understand the scientific and ecological principles that underlie this field.
In addition to these subjects, economics, sociology, psychology, and anthropology courses can also complement an economics degree or career, depending on your interests and career goals.
The courses you choose will depend on your interests and career aspirations, but studying a range of disciplines can help you develop a well-rounded perspective on economic issues.
Is it hard to study economics?
Studying economics can be challenging but ultimately depends on an individual’s interests, skills, and prior knowledge. Economics requires a solid foundation in mathematics and statistics, as well as critical thinking and analytical skills.
Economics courses cover a broad range of topics, including microeconomics, macroeconomics, econometrics, international trade, and finance, among others.
Understanding these topics requires students to develop a strong understanding of economic theories and concepts, as well as the ability to apply these theories to real-world situations.
In addition to the academic requirements, studying economics requires a significant amount of reading, writing, and research. This can be time-consuming and demanding, but it is essential to learning how to think and communicate like an economist.
While studying economics can be challenging, it can also be incredibly rewarding. Economics is a fascinating field that offers insights into some of our time’s most pressing social and economic issues.
With hard work and dedication, anyone can succeed in studying economics and go on to make a valuable contribution to the field.
Are economists in demand?
Yes, economists are in demand in a variety of fields and industries. Here are a few reasons why:
Government agencies: Economists are in demand in federal, state, and local governments, where they provide policy analysis and advice on economic issues.
The government is one of the largest employers of economists, with positions in agencies such as the Bureau of Labor Statistics, the Federal Reserve, and the Department of Commerce.
Nonprofit organizations: Economists are also in demand at nonprofit organizations such as think tanks and advocacy groups, where they conduct research and analysis on economic issues.
Many of these organizations focus on issues such as poverty reduction, economic justice, and environmental sustainability.
Private sector: Economists also work in the private sector, particularly in industries such as finance, consulting, and data analysis. Economists in the private sector may work for banks, investment firms, consulting firms, or corporations, providing economic analysis and advice.
Academic institutions: Economists are in demand at universities and research institutions, where they teach and research economics. Many economists hold tenured positions at universities where they teach undergraduate and graduate courses and conduct research in the field.
International organizations: Economists are in demand in international organizations such as the World Bank, the International Monetary Fund, and the United Nations, where they provide economic analysis and advice on global economic issues.
Economists are in high demand because of their expertise in analyzing economic data, developing models and theories, and providing insights into how policies and decisions affect economic growth and development.
As economic issues remain central to policy and public debate, demand for economists will likely remain high.
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