Why Study Economics?
The field of Economics
As individuals, families, and nations, we confront difficult choices about how to use limited resources to meet our needs and wants. Economists study how these choices are made in various settings, evaluate the outcomes in terms of criteria such as efficiency, equity, and stability, and search for alternative forms of economic organization that might produce higher living standards or a more desirable distribution of material well being.
To illustrate the nature of economic inquiry, consider the provision of medical care. The nation does not now have—nor is it ever likely to have—enough doctors, nurses, hospitals, and medical equipment to treat every illness of every person to the fullest extent of existing medical knowledge. Medical care must somehow be rationed. Households must decide how much of their incomes to spend on medical care and insurance. Physicians must choose how much time to devote to their patients and which tests or treatments to prescribe. Students entering college must decide whether to pursue careers as physicians, nurses, or hospital administrators.
The "setting" of these decisions is shaped by government policies, such as those requiring certification of physicians, and immunization against certain diseases. Characteristics of market participants also shape the setting: How well informed are consumers about the prevention and the treatment of disease? Are hospitals run to maximize profits, or are they nonprofit institutions with other goals? Economists specializing in health care study how these factors influence the cost, availability, and distribution of medical care; and they attempt to determine how changes in the setting—for example, increasing government subsidies for preventive care—might affect the performance of the system.
The analysis of particular markets, such as those for medical care, communications, pollution permits, and higher education, is referred to as microeconomics.
The other major branch of economic analysis is macroeconomics, which focuses on the behavior of an economy as a whole. Macroeconomists study the determinants of aggregate output (gross domestic product), inflation, unemployment, and the balance of payments, again with an eye to identifying how changes in the setting might improve overall economic stability and growth.
Careers in Economics
A student of economics will have a good understanding of how markets function. This knowledge is useful for a variety of entry-level jobs in government, industry, or finance. Many large corporations and labor unions employ economists to prepare forecasts and to examine developments in national or local markets that may affect future costs and profits. A rapidly growing area of employment for majors, especially those who have strong analytical skills in mathematics and statistics, is management consulting. Another is banking, both commercial banking and investment banking. Governments at all levels, including international organizations such as the United Nations, are also significant employers of economics majors for positions involving analyses of revenues and expenditures, cost-benefit studies of programs in education, health, and transportation, etc.
Higher-level positions in industry or government usually require at least a master's degree. A doctorate is generally required for academic employment and for the top echelons in business or government. The study of economics also provides a good preparation for a professional degree in business or law. However, majoring in economics is by no means a prerequisite for admission to either business school or law school.
NORTHWESTERN'S Economics Community
The focal point of the undergraduate program in economics at Northwestern is the Department of Economics in Weinberg College. In addition to the 45 faculty in the Economics Department, approximately twice as many economists can be found in other departments on campus including in the McCormick School of Engineering and Applied Science, the Kellogg School of Management, and the School of Education and Social Policy. Many of these faculty in other schools and departments teach courses that have economics content.
Northwestern also has interdisciplinary research centers that conduct research and hold events that are of interest to economists. These centers include the Institute for Policy Research, the Transportation Center, and the Center for Mathematical Studies in Economics and Management Science.
Explore our UNDERGRADUATE Program
The Department of Economics offers a major, combined MA/BA, minor, and opportunities for interdisciplinary study with other Northwestern programs. Explore these options:
- Economics major
- Economics minor
- Economics combined BA/MA program
- Interdisciplinary options complementing economics