Our guide to economics
Hotcourses Editor

Our guide to economics

First published date December 04 2013 Amended date December 04 2013

Why are some countries richer than others? How do different economies work? Why does the price of milk rise one year and not the next? Economists try to answer these questions and many more. By studying the science of economics and applying economic theories, they examine why goods and services are produced, distributed and consumed in the ways they are – and the impact this has on society. Because economics is all around us: it’s in the decisions we make when we go shopping, it’s in the revenue created from tax, it’s in our savings, our blow-outs – it’s everywhere. Studying an economics course opens the door to a fascinating science that can be applied to almost everything we do!


Macroeconomics vs microeconomics

Sound like a mouthful? It’s actually quite simple. ‘Macro’ means large in Greek and macroeconomics applies to countries and regions as a whole – rather than focussing on the actions of individuals. So issues that affect a country and its economy, like high inflation, low unemployment, a rising GDP or a decline in manufacturing, all come under this umbrella.

Meanwhile, microeconomics looks at the buying and selling behaviours of individuals and businesses. It analyses the impact a person’s spending patterns has on markets and industries. Of course lots of individual actions add up to have big impacts, and issues like high inflation affect how a person spends their money, so macroeconomics and microeconomics are intrinsically linked and all economics courses cover both strands.


The range of economics courses

·         Undergraduate and postgraduate: As you’ve probably gathered, economics is a big old subject – and the variety of courses on offer reflects this. Full-time and part-time degree courses will provide you with a deep understanding of economics, and can lead to further study like a Master’s or PHD. A good economics degree is very highly regarded by employers across different industries. If fact if you’re keen to study a degree, but you’re not sure what you’d like to do afterwards, economics could be an excellent a choice.

·         Introductory courses: If you’re interested in economics and want to broaden your horizons, there are plenty of short and part time courses available. These courses will introduce you to the main principles of economic theory and explain what terms like ‘quantitative easing’ actually mean! And if you work in – or are looking for a career in – business, finance or the government, an introductory course in economics can prove very useful too.

·         Online courses: There’s a great variety of these course for people interested in studying economics. Through studying online you can complete a GCSE or A-level in the subject or even work towards a diploma. 


Economics and careers

When was the last time you met an economist? Probably not that recently. Careers in economics aren’t very common, but they do exist! Many economists stay in academia and are employed by a university. They will have completed a PHD and a post-doctorate and will go on to pursue their own economic theories, while writing papers for economic journals, giving talks at conferences and lecturing students. Other economists are employed by large corporations to give advice on how best to maximise a company’s profits – these careers can be highly lucrative. Then there are government economists who determine a government’s economic policy. In Britain, these people will work for the HM Treasury department, among others, and advise ministers on how to set budgets, spend money and make savings. Finally, the Bank of England is home to (arguably) the most influential economists of all – the people who set Britain’s interests rates, which determines how much it costs to borrow money.


Famous economists

1.Steven Levitt and Stephen J. Dubner: In 2005, a book called Freakonomics: A Rogue Economist Explores the Hidden Side of Everything exploded onto the scene – and soon became a bestseller. The book is a collection of essays, with each one analysing a social trend not normally covered by economists. Using economic practices, Levitt examines why some drug dealers have surprisingly low earnings and argues that legalising abortion leads to a reduction in crime. The book is a great starting point for anybody interested in economics.

2.Friedrich von Hayek: You may not have heard of him, but his theories are still widely debated today! The Austrian-born economist (who later became British) was awarded the Nobel Prize in Economic Science in 1974 for his contribution to ‘free market’ economics. In other words, Hayek believed that government intervention was bad for industry, and that by setting interest rates low (and encouraging people to spend) a ‘boom and bust’ cycle would occur resulting in economic debt and recession.

3.John Maynard Keynes: Just as Hayek wanted markets free of government intervention – Keynes argued for the complete opposite. He argued that governments should spend money on infrastructure and provide low cost loans to get the economy moving. Keynes is regularly described as Britain’s most famous economist, and his book The General Theory of Employment, Interest and Money, is one of the founding texts of macroeconomics.

By Rebecca Hobson