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.
What is economics?
To understand why the study of economics is important, we first need to understand what economics is.
Collins English Dictionary defines economics as: “The study of the way in which money, industry, and trade are organised in society.”
Considered a social science, economics uses scientific methods to understand how scarce resources are exchanged within society. Economists study theories and techniques useful for developing policies in government as they have a deep understanding of how to create efficiency in today’s world.
American economist Thomas Sowell provides another useful definition: “Economics is the study of cause-and-effect relationships in the economy.”
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.
Economic theories
There are many different areas of economics you can study. You can look at these at macroeconomic (large-scale) or microeconomic (individual) levels.
There are four types of economic systems:
- Traditional economic system
- Command economic system
- Market economic system
- Mixed economic system
Economics in real life
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.
Importance of studying economics
So, why do we study economics? Here are five reasons why studying economics is important.
1. Informs decisions
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.
2. Influences everything
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.
3. Impacts industries
Firms of all sizes and industries have to rely on economics, whether that’s for product research and development, pricing strategies or how to advertise. This wide influence means studying economics can open up a variety of career options across all sectors of the economy, from agriculture to manufacturing, to banking and consultancy.
4. Inspires business success
Understanding how consumers behave is vital for a business to succeed. Economists use theories and models to predict behaviour and inform business strategies. For example, how to analyse ‘big data’.
5. International perspective
Economics affects the world we live in. Understanding domestic and international perspectives – historic and current – can provide a useful insight into how different cultures and societies interact. For international corporations, understanding the world economy is key to driving success.
Should I study economics?
An economics course will give you an in-depth understanding of core economic theory and how to apply it to the real business world.
You will also develop a range of transferable skills, such as:
- communication
- problem solving
- research
- numeracy
- time management.
Economics is a widely respected field of study and provides an alternative to an Accounting and Finance degree as it offers similar career opportunities for graduates. You could work in job roles within a range of industries, such as:
- Banking
- Finance
- Accountancy
- Business
- Government
- Consultancy
Study Economics at Durham
Durham University International Study Centreprovides a specialist pathway programme for international students. After successful completion of theInternational Foundation Year in Business, Economics, Accounting and Finance, students can progress to study BA (Hons) Economics at Durham University Business School.
Durham University offers a BA (Hons) Economics degree ranked 14th in the UK by the Guardian University League Table, 2020. The subject is also ranked top for graduate employment and further study in the HESA survey (2016/17).
Helen Dey teaches Mathematics at the International Study Centre. She shares what she enjoys about the subject and how its applied to the world around us:
“I love teaching maths, because it's the best subject in the world. I think it unlocks a lot of keys within science. One of my favourite areas is calculus. It explains a lot that goes on in the physical world, as well as economics and business, and science and engineering. Maths is something I want to share with the students and pass on my experience and knowledge.”
"I chose to study at Durham University because the University’s reputation speaks for itself. The years of success and good accomplishments made me want to go to this University. It’s quite hard to get into Durham, so it’s very challenging for me too. Studying here is going to have a huge impact on their future careers and their future in general."
Jad from Lebanon
Studying International Foundation Year in Business, Economics, Accounting and Finance
Aiming to study BA (Hons) Business and Management
Frequently asked questions
What is the study of economics?
The study of economics is not only about money, numbers or mathematics. It's another way of looking at the world. To truly understand economics, you will also study aspects of politics, history, psychology and sociology.
What are courses in economics?
Courses in economics are a way for you to study more about the subject of economics and prepare for a career in the industry.
Does economics have a future?
Economics isn't going anywhere. People well-versed in the subject will continue find job opportunities in various sectors such as banking, finance, business and consultancy.
Economics, at its core, is the study of the allocation of scarce resources. It encompasses a complex interplay of money, industry, and trade, shaping societal organization and influencing decision-making at individual, corporate, and governmental levels. The article touches on several key economic concepts, theories, and their real-world applications. Let's break them down:
1. Definition of Economics
- Collins English Dictionary Definition: Economics is the study of how money, industry, and trade are organized in society.
- Thomas Sowell's Definition: Economics explores cause-and-effect relationships in the economy.
2. Importance of Economics
- Influencing Economic Growth: Understanding cause-and-effect relationships is crucial for fostering economic growth.
- Allocation of Resources: Economists assess risks and benefits while advising on resource allocation.
3. Economic Systems
- Traditional, Command, Market, Mixed: These are the four primary types of economic systems that define resource allocation mechanisms within societies.
4. Branches of Economics
- Macroeconomics & Microeconomics: These branches respectively study large-scale economic phenomena and individual economic behavior.
5. Applied Economics
- Utilization of Economic Theories: Applied economics applies economic theories to real-world scenarios, considering costs, benefits, and predicted human behavior for informed decision-making.
6. Significance of Studying Economics
- Informing Decisions: Economists provide data-driven insights and forecasting to guide decisions in both public and private sectors.
- Ubiquitous Influence: Economic issues like taxation, inflation, wealth distribution, and environmental concerns affect daily lives and societal structures.
- Impact on Industries: Economics is fundamental to business strategies, product development, pricing, and advertising across industries.
- Business Success: Understanding consumer behavior through economic theories aids in strategizing for business success.
- International Perspective: Economics plays a pivotal role in shaping domestic and international relations, influencing global economies and cultures.
7. Reasons to Study Economics
- Developing Core Economic Understanding: An economics course imparts a deep understanding of economic theories and their real-world applications.
- Transferable Skills: It equips individuals with communication, problem-solving, research, numeracy, and time management skills.
- Diverse Career Opportunities: Economics offers various career prospects across sectors like banking, finance, government, and consultancy.
8. Economics at Durham University
- Programs Offered: Durham University provides specialized pathways for international students in Business, Economics, Accounting, and Finance.
- Degree Ranking: BA (Hons) Economics at Durham University Business School is highly ranked in the UK for its quality and graduate prospects.
9. Expert Testimonial
- Helen Dey's Perspective: Mathematics, especially calculus, is intertwined with economics, explaining real-world phenomena, and is an integral part of various fields, including economics, business, and science.
10. FAQs
- Nature of Economics: Economics delves beyond numbers, encompassing aspects of politics, history, psychology, and sociology.
- Courses in Economics: These are structured to deepen one's knowledge and prepare for a career in economics.
- Future of Economics: The field holds enduring value, providing ample job opportunities in sectors such as banking, finance, business, and consultancy.
By studying economics, individuals gain a comprehensive understanding of how societies, governments, businesses, and individuals interact within the complex web of resource allocation and decision-making.
