Nov 30, 2018 at 12:00am ET By Joanna Hughes

If you watch the news at all, you probably hear the word 'economy' tossed around a lot. But if you’re like many people, you may not understand what economics is and why it matters so much. Here’s a closer look at the discipline, along with why it’s an essential area of study.

The 411 on Economics

According to the American Economics Association (AEA), “Economics can be defined in a few different ways. It’s the study of scarcity, the study of how people use resources and respond to incentives, or the study of decision-making. It often involves topics like wealth and finance, but it’s not all about money. Economics is a broad discipline that helps us understand historical trends, interpret today’s headlines, and make predictions about the coming years.”

Economics may seem obtuse in the abstract. However, it has very powerful real world implications.  Specifically, according to the AEA, economics can help us answer many big questions, such as why some countries are rich while others are poor; why men earn more than women; how data can help us make sense of the world; what causes recessions; and why we ignore information that could be used toward better decision-making.

Economics Help provides several examples of times when economics come into play, including dealing with shortages of raw materials; working out how wealth is distributed and redistributed within society; determining the extent to which the government should intervene in the economy; and using principles and measures such as opportunity cost, social efficiency, forecasts, and evaluation.

Friedrich August von Hayek once proposed, “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” In this sense, economics lies at the intersection of the natural sciences and the humanities: applying a quantitative, data-driven approach to human behavior. “As such [it] is one of the most important and relevant skills for the world today, helping us choose wisely when it comes to our personal social and professional lives,” asserts Financial Express.

Economics Is Everywhere

Indeed, economics promotes understanding of and insight into problems specific to our times, including everything from education and the environment to health care and national security.

“One of the principal jobs for economists is to understand what is happening in the economy and investigate reasons for poverty, unemployment and low economic growth. For example, in a political debate such as – Should, the UK leave the EU? There are many emotional arguments made about immigration. Economic studies can try and evaluate the costs and benefits of free movement of labor. Economic studies can try to examine the economic effects of immigration. This can help people make a decision about political issues,” says Economics Help.

And then there’s the degree to which fintech, blockchain technology and cryptocurrency are influencing the global economy, with the World Economic Forum recently suggesting blockchain may be the key to solving some of the world's most urgent environmental problems

Becoming an Economist

The list of skills required of economists is a long one, comprising analytical skills, communication skills, critical thinking skills, maths skills, writing skills, and more. But economists are much more than the skills they possess. They are also game-changers.

“At the heart of economics is the modeling of individual decision-makers in a way that allows one to analyze how different parties benefit from a given way of organizing things, and how the society as a whole comes out,” asserts Helsinki Graduate School of Economics (HGSE), an initiative of the University of Helsinki and two other Finnish universities, Aalto University and the Hanken School of Economics. This alliance gives students the benefit of a wide range of courses to choose from and a large number of top researchers.

With research groups in diverse fields including public economics, microeconomics, macroeconomics, labor economics, data science, industrial organization and econometrics, and boasting a breadth and depth of coursework, HGSE gives students the resources they need to take on some of the biggest economic challenges we face as a society.

If you are interested in pursuing studies in this field, meanwhile, you will find no better place to do so than the the University of Helsinki, which strives to produce “outstanding research with maximum academic and social impact, to educate the next generation of world-class economists, and to offer excellent training across disciplinary borders.”

Still think of economists as more in their ivory towers than on the front lines? Look no further than the 2018 Nobel Prize in Economic Sciences, which recognized two economists for their work in tackling two of the most pressing issues of our times: technological innovation and climate change. The organization said, “The contributions of Paul Romer and William Nordhaus are methodological, providing us with fundamental insights into the causes and consequences of technological innovation and climate change. This year’s Laureates do not deliver conclusive answers, but their findings have brought us considerably closer to answering the question of how we can achieve sustained and sustainable global economic growth.”

In fact, testament to the strength of the teaching and research at the University of Helsinki, the 2016 Nobel Prize in Economic Sciences was awarded to a graduate of its B.S. Mathematics program, Bengt Holmström. 

Want to be on the forefront of such world-changing work? Then apply to the University of Helsinki's master's programme in economics 

Joanna worked in higher education administration for many years at a leading research institution before becoming a full-time freelance writer. She lives in the beautiful White Mountains region of New Hampshire with her family.

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