Readers Question: Why do we Study Economics In School?
1. It’s good to study and improve the mind. At least, that is what I was told when I was learning ancient Greek and Latin.
Many employers are not looking for a specific degree but, the ability to learn, write and understand relevant ideas. I guess the idea is that if you have an A level in Economics (or other subject), you would be able to understand a firm’s business plans and be a competent employee.
2. Understand Practical Mathematics
I often teach students doing further Maths (double A Level Maths) but can they calculate a percentage? No! – Only differentiation and calculus. At least in A-Level economics, you should learn how to calculate a percentage.
3. Understand What is Happening.
The current crisis has shown that it is hard to separate our daily lives from Economics. Many people get confused over interest rates, inflation and government borrowing. But, these are issues which affect our daily lives and own financial well-being. Understanding economics helps comprehend what is happening and why we have lost our job.
4. Understand Graphs
Ask anyone what is happening to price level between June 2011 and Sep 2014, and the majority will say prices fell. But, a good A-level student will understand the difference between absolute changes and rates of changes. The answer is that prices are rising at a slower rate. I have seen TV news readers and newspaper columnists get confused over this issue.
5. Understand Two Sides of the Argument.
We live in a sound bite society, where the mass media often try to portray issues in black and white. – Medicare good / Medicare bad. In economics, you hopefully learn to appreciate there is more than one side of the argument and see issues from different perspectives. This gives a more balanced view of economic/social issues. A key element in economics is evaluation – understanding that the impact of higher interest rates depends on the economic circumstances.
6. The Economic Perspective
The standard of political debate can be depressing. Learning economics gives a different insight. e.g. understanding:
- the opportunity cost of spending more on health care/spending more on the military e.t.c
- The social benefit of taxing goods with negative externalities.
- The social benefit of subsidising goods with positive externalities.