Editorial: Economics in the time of madness

- Meghana Yerabati , Economics Association

2017-02-19

Technical

As a student of economics, one frequents many questions that push us to rethink the role of economics in the modern age. There are doubts regarding how economics is being studied as an exact science, such as this article denouncing the Nobel prize in economics. There is criticism regarding the methods of study employed in economics as classical theory tends to be outdated and leaves little room for alternative schools of thought. There is also disapproval in the failure of predictions of financial crises. Clearly, a study of economics as an exact science is not desirable, nor is a study of theory as a body of unestablished fact. How, then, does one go about understanding this discipline to suit modern needs?

In a college of engineering, technology and physical sciences that gives us a Master of Science (with Honours) degree in Economics as opposed to the usual Master of Arts degree that is widely prevalent in the country, this question becomes even more important. The author takes a look at how the courses should be designed, how an Arts degree differs from a Sciences degree in economics and the kind of skills our curriculum has to offer and others it painfully doesn’t equip us with.

Economics degrees can come in BA and BSc forms. The latter are likely to focus more on mathematics, statistical theory and techniques for the application of mathematics in economic theory. Of course a BA in Economics will still involve some mathematics, but usually combined with more qualitative modules, sometimes in related social sciences fields such as sociology and psychology.

According to the QS ratings for universities worldwide, the best undergraduate program in economics is the one belonging to the Massachusetts Institute of Technology whose course catalogue can be found here. Students have the option to take on intermediate and advanced courses in subjects of their interests and also have the choice of exploring different courses such as organizational, behavioural, health, labour economics, etc. An added advantage is the opportunity to minor in subjects such as law or mathematics. The coursework is equally challenging in mathematical, computational and theoretical aspects.

The coursework in economics must inculcate a strong foundation in critical thinking through the understanding of models, interpretation of data and a sound awareness of the world. All of these are essential skills to pursue a career in academia, global businesses, government, finance, consulting and law.

Perhaps, the greatest disadvantage of pursuing a MSc. Economics degree in a Sciences and Engineering college whose graduates work in the field of Finance and Analytics is that the social science aspect of it is not explored enough. But for those who are particular about becoming economists at policy houses, think tanks and global institutions, a better understanding and discussion of economic theory is a must. Being an economist is about using the scientific method of analysis all the while knowing it to be a mere abstraction of human behaviour. This does not mean we shouldn’t pay attention to economists, nor that economics is unworthy of a Nobel Prize. It just means it’s not a hard science like physics. Done properly, it takes account of culture, history, geography, institutions, individual and group psychology. Therefore, as John Maynard Keynes observed, an economist should be “mathematician, historian, statesman and philosopher in some degree”.

In a world having new challenges in the form of information economies and climate change, a greater level of critical thinking is essential so as to not fall into the dogma of existing theories and to have a broader perspective on the state of affairs in this day and age.