What is an Economist?
An economist is a professional expert in the field of economics who studies the relationship between societies’ scarce resources and their output, production, and consumption.
Economists are practitioners in the social science discipline of economics. Economics is the subject of studying the production, distribution, and consumption of goods and services in a market economy. An economy is simply the network or area of production, distribution, and consumption of goods within a defined region. This could be as small as a town or city, or as large as an entire country or continent.
Economics is rooted in the understanding of the two forces of supply and demand, and how they impact modes of production and consumption habits. Economists study these dynamics and publish research findings, which are used to influence a wide variety of policies, including:
- Fiscal Policy – Government spending and taxation laws
- Monetary Policy – Central bank activities such as setting interest rates and controlling money supply
- International Trade Agreements – Cross-border free trade or implementation of tariffs or quotas and other governmental impediments
- Corporate Strategies – Decisions regarding projects to take to maximize shareholder wealth
Economists generally hold advanced degrees, such as a Master’s degree or a Ph.D. They also usually specialize in a certain sub-field, which will be explained further below.
What Do Economists Do?
Economists perform varied duties, including:
- Conducting surveys and collecting economic data
- Analyzing economic data with mathematical models
- Synthesizing economic data and drawing results and conclusions to be used by various parties
- Presenting research results in reports or presentations
- Analyzing and forecasting trends in the market
- Advising parties such as governments, businesses, and individuals on decisions based on inferences drawn from economic data
- Providing general information and writing articles regarding economic topics and economic outlooks
- Recommending solutions to various economic issues
Generally, most economists are employed by the government since the government must make policies that are closely related to economics and how individuals and companies act. However, economists are also employed as professors in universities, as well as by corporations or as part of the media to inform the general public about economic outlooks.
Facts about Economists
According to the U.S. Bureau of Labor Statistics, these are some facts about economists:
- Median Pay: $105,020/year or $50.49/hour
- Typical Entry-Level Education: Master’s degree
- Work Experience in a Related Occupation: None
- On-the-Job Training: None
- Number of Jobs: 21,000
- Job Outlook, 2018-2028: 8%
- Employment Change, 2018-2028: 1,700
Fields that Economists Study
Economics comprises several sub-fields, including:
- Economic Policy
- Philosophical Theories
Economists can specialize in the sub-fields, or they can gain a more general understanding of how the sub-fields blend together in economics.
Macroeconomics is defined as the study of the economy as a large system and analyzes – from a high level – production, consumption, and investment interactions, as well as the factors affecting them. It includes studying, topics such as:
- Gross Domestic Product (GDP)
- Unemployment Rate
- National Income
- Overall Output
- Overall Consumption
- National Spending
- National Saving
- National Investment
- International Trade
From the topics above, you can gather that macroeconomics studies economies from a high-level, viewing the economy as a whole.
Microeconomics is defined as the study of the economy on an individual- or company-basis and analyzes – from a lower level – the decisions and allocation of scarce resources among individuals. While macroeconomics focuses on the sum of total activity, microeconomics focuses on smaller decisions made by individuals and companies.
The basis of microeconomics is that each individual makes rational decisions that maximize their utility. Utility is loosely defined as the “pleasure” that an individual receives from certain decisions.
An important assumption is rationality, in which economists assume that individuals possess stable preferences that are both complete and transitive.
Economic policy deals with the interrelation between economic theories and governmental policies. Since the government is tasked with looking out for the well-being of all individuals, the study of economics is very helpful in gauging how individuals interact and what their needs and desires are.
It helps in setting the systems surrounding government budgets, taxation, interest rates, money supply, and ownership laws, and in governing the labor market.
There are several philosophical schools of thought surrounding economics as well. Some of the most popular are:
- Capitalism – Known as the market economy, which allows the allocation of goods and resources by the capital markets and financial markets
- Fascism – Takes the middle ground between capitalism and socialism in which it promotes individual profit through government subsidies
- Socialism – Based on social or cooperative ownership of various means of production
- Communism – Based on public ownership or government ownership of all means of production
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