<p>I liked microeconomics a lot, and I'm just wondering if there are any jobs out there that actually use the math, graphs, and theory we learned.</p>
<p>lmao, no. Unless you’re a professor or researcher or something.</p>
<p>Your job is likely to have nothing to do with what you actually learned, except for a few jobs out there (i.e. accounting/auditing, science labs, etc.). If you have a regular economics degree, it’s essentially as marketable as a political science, history, or english degree. You should load up on some accounting courses. This doesn’t include Haas people of course, just the regular economics majors. Some people I know were able to do Economics + Accounting, and got hired by Big 4. The rest I know either went to law school, teaching, or some other non-related field like insurance/underwriting work, sales, fashion, paralegal, tech jobs, marketing, etc.</p>
<p>If you go to a top college (like Berkeley), many people who major in Economics will go into finance (Wall Street), consulting, accounting, or other business fields.</p>
<p>In none of those jobs will you ever be drawing all those econ graphs (e.g. monopolistic competition! kinked demand!). But, you will be using many of the quantitative skills, like math, and the sort of general problem solving/reasoning skills you use in econ will be used in business. Maybe for finance you might have to know some macro (i.e. how the fed’s actions will affect the markets), but that’s it.</p>
<p>Look here:
<a href=“https://career.berkeley.edu/Major/Econ.stm[/url]”>https://career.berkeley.edu/Major/Econ.stm</a></p>
<p>Micro and macro economics are generally useful to know anyway (whether you are going into business, government, or academia), in terms of understanding why actors in the economy may be acting a certain way, and the potential effects of government and central bank policies.</p>
<p>Economics 136 may be specifically useful knowledge in the finance and investment field. Economics 119 may be of interest to those in marketing and public policy (as in, why seemingly identical in theory choice architectures may produce significantly different choices by the participants).</p>
<p>Most of the other upper division economics courses appear useful in very specific contexts, and may be interesting by themselves, but may not be applicable in general.</p>
<p>Look into economics/litigation consulting (i.e. Cornerstone Research)</p>
<p>They actually DO draw those graphs. Most of the partners and higher ups in those firms are some type of econ or math phd. The reason they draw those graphs is so they can present data and findings in a lawsuit. They have to do things like estimate damages caused from a corporation or prove that a corporation is monopolizing the industry or doing anti-competitive tactics.</p>
<p>Doesn’t Cornerstone Research require a very heavy quant background? Something a regular ol’ 100A/100B/140 econ major wouldn’t possess?</p>
<p>Why not just do 101A/101B/141/C103/104 and extra math and statistics if aiming for jobs that require a heavy quant background?</p>
<p>Cornerstone Research and the likes aren’t as quantitative as you think. As long as you are good at math and know economic concepts you should be good.</p>
<p>
</p>
<p>But will you actually learn why actors in the economy behave as they do & the potential effects of various policies, or will you merely learn what the economics community claims to know regarding how those actors will behave or what the effects of various policies will be? </p>
<p>Or put more broadly, what exactly do economists know anyway? Nor am I the only one. Queen Elizabeth II herself famously [asked[/url</a>] the faculty of the London School of Economics why they couldn’t predict the crash. Why do economists always seem to [url=<a href=“http://rodrik.typepad.com/dani_rodriks_weblog/2007/08/why-do-economis.html]disagree[/url”>http://rodrik.typepad.com/dani_rodriks_weblog/2007/08/why-do-economis.html]disagree[/url</a>], particularly when we need them their advise the most, when we’re trying to recover from the greatest financial calamity in 80 years? Why do so few economists ever seem to [url=<a href=“http://theeuropean-magazine.com/633-stiglitz-joseph/634-austerity-and-a-new-recession]revise[/url”>The European - Das Debatten-Magazin: The European]revise[/url</a>] their beliefs and admit that their favored theories were wrong even the in light of new and shocking evidence? Many people, including myself, now wonder [url=<a href=“http://noahpinionblog.blogspot.com/2012/03/did-krugman-insurgency-fail.html]why”>Noahpinion: Did the Krugman insurgency fail?]why</a>](<a href=“HuffPost - Breaking News, U.S. and World News | HuffPost”>HuffPost - Breaking News, U.S. and World News | HuffPost)exactly do we have an economics academic profession at all - and not only hand them the lifetime security of academic tenure, but, on average, pay them significantly more than we pay the engineering and science professors, when their lack of knowledge, when we needed them the most, has proven to be so [embarrassingly</a> unhelpful](<a href=“http://www.newappsblog.com/2012/01/its-embarrassing-for-the-fed-said-justin-wolfers-an-economics-professor-at-the-university-of-pennsylvania-you-see-a.html]embarrassingly”>http://www.newappsblog.com/2012/01/its-embarrassing-for-the-fed-said-justin-wolfers-an-economics-professor-at-the-university-of-pennsylvania-you-see-a.html)?</p>
<p>From what I can tell, the real reason to study economics is that you will surely encounter plenty of other people in your life - particularly in the media and politics - that will invoke economics-based jargon to support their favored political position, and it is then useful to be able to speak that same language, akin to if everybody around you spoke Klingon, then you probably ought to learn Klingon. But whether economics provides you with scientifically reliable knowledge about how the world actually works is an entirely different question.</p>
<p>^Much of that can be said of the humanities (i.e. philosophy).</p>
<p>Some economic theories and laws are useful. Economists largely agree on some issues (i.e. much of microeconomics, I believe). Macro is much more controversial, obviously. The majority of economists are Keynesian, but again, there are varying factions within that.
I think economics does have value because some theories and laws do have predictive power</p>
<p>But remember: Economics is not a science.
It is 100% impossible to run a controlled experiment that tests only one variable. You can only use history as evidence. In that respect, economics is somewhere in between the humanities and social sciences.</p>
<p>Microeconomics does not appear to be all that controversial, and can be tested experimentally in some cases (or reasonably well controlled “natural experiments” can be observed).</p>
<p>Macroeconomic theories and models are mainly derived from observation of noisy systems. Without alternate universes in which to try different macroeconomic policies, experimental testing of macroeconomic theories and models is rather difficult, to say the least. This does not mean that they are necessarily wrong or useless, but the limitations on experimentation need to be accounted for when considering them. Of course, politics comes in, where opponents of a given policy like to claim that some “better” outcome would have occurred if their policy were followed instead of the actual policy, even though there is no way of knowing without an alternate universe where their policy can be followed experimentally.</p>
<p>
</p>
<p>The key difference is that the humanities professors never claim to have precise scientific knowledge about the world. But economics academics make such bald-faced claims all the time - e.g. that their ‘evidence’ indicates that such-and-such stimulus package or tax cuts must produce X amount of GDP boost and Y number of jobs, or zero GDP boost and zero jobs. </p>
<p>The practical upshot of that is the President is advised by the Council of Economic Advisors, which is staffed, naturally, by academic economists. He is not advised by a Council of Humanities Advisors… or even a Council of Political Science Advisors composed of former academics. {He obviously has many regular political advisors, but practically none of them are actual academic political scientists.} Ben Bernanke, the 2nd most powerful person in the US - and certainly the most powerful unelected American - was a Princeton economics professor just prior to becoming the Chair of the Fed, a mere 7 years ago. Similarly, the 2nd most powerful man in the UK, Mervyn King, was formerly an economics professor at LSE, and the most powerful man in the EU, Mario Draghi, was formerly an economics professor at the University of Florence. Nobody is proposing to hand that sort of unelected power to a former humanities professor. Economics theories and policies are heavily cited throughout the mass media and the political process, and those theories are highly influential in international geopolitics. In contrast, few if any humanities theories are ever cited, or even known, by the mass media and political leaders. Surely the reason that the economics profession has itself been able to amass so much political power to influence world affairs in a way that the other social sciences or humanities have not is because of its claims to scientificity. </p>
<p>
</p>
<p>Even agreement is not by itself a mark of validity, if people are agreeing upon something without evidence. </p>
<p>As a case in point, if there’s probably one policy that economists agree upon, it is the notion that free trade benefits society as a whole. And - full disclosure - I too happen to believe that free trade benefits society as a whole. But at the same time, I fully concede that there is very little evidence that rigorously proves that to be the case. Economists can point to mathematical identities that spring forth from the axiom of comparative advantage, and a few comparative empirical studies that show that nations that participate in free trade tend to exhibit faster GDP growth than those who don’t. But that’s still not rigorous proof that free trade benefits society as a whole, perhaps because it isn’t exactly easy to define the phrase “benefits society as a whole”. Yes, I’m well aware that economists attempt to define benefits in terms of Pareto efficiency, but it is not at all clear whether the most ‘efficient’ system is the most beneficial to society. </p>
<p>{Note, my support of free trade is more philosophical/ethical in nature - I think people should be free to transact with whoever they want around the world. It has nothing to do with any “scientific” claims regarding the merits of free trade.} </p>
<p>
</p>
<p>Really? That’s rather interesting considering that the Keynesian resurgence has been stymied for now, which even Keynesian standard-bearer Paul Krugman has lamentably [conceded](<a href=“The Macro Wars Are Not Over - The New York Times”>http://krugman.blogs.nytimes.com/2012/03/23/the-macro-wars-are-not-over/</a>). If anything, economics academia seems to be dominated by ‘freshwater-school’ anti-Keynesians, even [after</a>](<a href=“Economics Professors Are Unshaken by Financial Crisis - The New York Times”>Economics Professors Are Unshaken by Financial Crisis - The New York Times) the crash. </p>
<p>
</p>
<p>Do you have any particular ones in mind? How many useful, non-obvious, reliable prediction rules does economics provide? </p>
<p>
</p>
<p>In fairness, I will say that if there is one branch of economics that probably is approaching a true science, it is that of experimental economics - which overlaps with much of behavioral economics - and which by definition does indeed attempt to run a controlled experiment that isolates and manipulates one or at most a small subset of variables. </p>
<p>The main difficulty with experimental economics is its generalizability and aggregatability. Can we really simply aggregate the experimental outcomes of individual decision makers to describe the behavior of complex systems such as markets, firms, or even entire national economies? That’s far from clear. </p>
<p>
</p>
<p>I think you meant to say that it is between the humanities and the sciences. Economics, for better or worse, has been deemed ‘Queen of the Social Sciences’, such that other social sciences, particularly poli-sci and sociology, are now starting to emulate. But then economics cannot be between humanities and the social sciences, because that would imply that economics is between humanities and itself. </p>
<p>But I would actually argue that, if anything, modern-day economics has now become an admixture of applied mathematics and philosophy. Plenty of economics journal articles nowadays are practically indistinguishable from mathematics articles, complete with theorems, proofs, lemmas and postulates. </p>
<p>But mathematicians don’t sternly pronounce that their theorems somehow ‘prove’ that some political policy will benefit society. Economists have no such reticence.</p>
<p>
</p>
<p>I would actually argue that numerous aspects of microeconomics have now become highly controversial, precisely because of the rise of experimental economics. The predictive power of much of game theory - which serves as the foundation for much of micro - is now increasingly being called into question because experimentalists have shown that, at least in the lab, individuals do not actually always seek to maximize their outcomes in the game. Even such experiments upon individuals playing simple games as the Dictator Game and the Centipede Game exhibit wide deviations from the Nash Equilibria. </p>
<p>And that is surely micro’s greatest weakness. Micro does indeed exhibit far greater consensus than does macro, but only because most ‘advances’ in modern micro are purely mathematical and theoretical in nature. There are likewise relatively few controversies in mathematics academia, for once a theorem is rigorously proven, then short of a logical error, there is nothing left to dispute. </p>
<p>The real issue is whether the micro theories actually describe reality, and that’s an entirely different question. Mathematical theorems - including mathematically-based microeconomic theorems - are unfalsifiable by their very nature, but unfalsifiable statements - while perhaps able to generate a consensus - are by definition unscientific. Mathematicians don’t claim that all of their theories are scientific descriptions of reality.</p>
<p><a href=“or%20reasonably%20well%20controlled%20%22natural%20experiments%22%20can%20be%20observed”>quote</a>
[/quote]
</p>
<p>Then allow me to give you a version of the Russ Roberts [challenge](<a href=“Sociology - Cafe Hayek”>A 1975 Sears Catalog - Cafe Hayek) regarding instrumental variables, which is a superset of econometric tools to establish causation, of which natural experiments is a member:</p>
<p>Name me some topics in microeconomics for which there was a serious debate - with serious proponents on both sides - that was resolved by virtue of a published paper that exploited a natural experiment to establish causal identification, such that the proponents of one side had to concede that they were wrong. </p>
<p>Can anybody name even one? I know that I can’t. </p>
<p>
</p>
<p>And then given the at-best limited reliability of the pronouncements of macroeconomists, that raises the question of why society continues to accord so much power, respect, and pay to the economists. Like I said, economists (including macro) tend to be among the most highly paid faculty at any university outside of a professional school (e.g. med school). They’re certainly paid far more than the science and engineering faculty who actually have built an impressive corpus of rigorous knowledge of the world. Why? Macroeconomists enjoy access to the President and other world leaders that is matched by practically no other academic discipline, not even political science. Why?</p>
<p>Most economics majors do not become central bank governors, economics advisors of presidents and other politicians, or even Wall Street investment bankers, etc…</p>
<p>As to why economics faculty may be well paid, it is likely that your favorite type of employer (Wall Street investment banks) likes people with the same credentials.</p>
<p>
</p>
<p>The economics profession clearly has the sort of access to the corridors or power that no other academic discipline could ever hope to match. That’s all the more curious considering how little empirical reliability economics has, certainly relative to the natural sciences and engineering. Can economists build anything of comparable scope and reliability to the computer that I’m using right now to type this post? Heck, except for the aforementioned sub-branch of experimental economists, economists don’t even have as much reliability as the psychologists do, who can at least boast of a bevy of results validated by laboratory experiments. </p>
<p>Yet the President is not being advised by the Council of Psychological Advisors. There are no elite, prestigious NGO’s such as the IMF, World Bank, Federal Reserve, or ECB that provide high-paying jobs to armies of psychologists. </p>
<p>See below.</p>
<p>
</p>
<p>Really? Even if that was true, it seems as if Wall Street investment banks like to raid the faculty of mathematics, statistics, physics, and engineering as well. Yet you don’t see those departments raising their faculty salaries in response. So why only the economics departments? </p>
<p>Moreover, like I said - and I think nobody would seriously dispute, not even the economists - much of the economics discipline nowadays has become largely indistinguishable from mathematics. This is especially true of the sub-branch of pure economics theory, which - for better or worse - tends to be the most prestigious subbranch of economics, at least as measured by citations. {Far more theorists are cited by empiricists than are empiricists cited by theorists, and indeed Larry Summers, John Bates Clark winner and perennial Nobel Memorial Prize contender once famously lamented in his 1991 SJE paper that “[empirical] results are rarely an important input to theory creation or the evolution of professional opinion more generally” and “I invite the reader to try and identify identify a meaningful hypothesis about economic behavior that has fallen into disrepute because of a formal statistical test.” }</p>
<p>Yet even the economic theorists - which are basically just mathematicians, would surely concede that they are not as skillful in mathematics as the pure mathematics faculty are. That is to say, a randomly selected mathematics professor is far more likely to be able to produce a paper accepted for publication in an economics journal than is a randomly selected economics professor able to publish in a math journal. Yet economists are nevertheless paid far more than are mathematicians. Why? </p>
<p>Again, the core reason that economists enjoy this sort of power and prestige that other disciplines do not is that economists have savvily marketed the notion that they possess unique and valuable, ‘scientifically validated’ knowledge of important world affairs. Mathematicians discuss transfinite numbers and Diophantine geometry that, frankly, nobody other than them really cares about. But economists claim to possess scientific knowledge about tax rates, government spending, trade policy, financial markets, bank regulation, and other topics that actually matter to people. It is therefore appropriate to ask whether they in fact have this knowledge, and if they don’t, then why should society continue to accord them so much power?</p>
<p>Anyway, to answer your original question, while obviously the typical economics major won’t become a central banker or a Presidential advisor, what the typical economics major will enjoy is fluency within the economics-jargon-laden political environment that we live in today. Analogously, foreigners should learn to speak English simply because English has now become the lingua franca of science, business, and entertainment throughout the world. 100 years ago, scientists and engineers throughout the world had to learn German because that was the lingua franca of science. </p>
<p>But that has nothing to do with the inherent ‘validity’ of English, German, or any other language. It simply has to do with the fact that certain languages are more embedded within the power structure of the world than are other languages. I similarly agree that people probably should learn economics simply because economics is likewise well-embedded within the power structure of the world than are other academic disciplines. But again, it has nothing to do with the inherent validity of economics.</p>