economists （6do encyclopedia）

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Economists are professionals who carry out studies on the economic systems of countries, businesses, households and individuals. This field is central to the understanding and improvement of the world’s economic system. Economists meticulously use data and information to explain decisions made by governmental and business institutions, diagnose current issues and provide solutions to economic issues.

History

The emergence of economics as a field of study can be traced back to the industrial revolution of the 18th century in Europe and North America, where the need arose for a better understanding of the economic events and their underlying causes. The first established school of economic thought is the classical economics, which gained prominence in the late 18th century with the works of Adam Smith. Subsequent to Smith’s publications, economists have continually discussed, debated and refined theories in economic thought. Currently, there is a diverse range of economic theories and models used to understand and develop economic policy.

Education and Training

A thorough education and training is crucial for a career in economics. A bachelor’s degree in economics, business, mathematics or a related field is the primary qualification required for basic entry-level positions in the field. An advanced degree such as a Master’s or Ph.D. is necessary for individuals seeking higher-level positions or research opportunities.

Economics undergraduate programs typically provide coursework in micro and macroeconomics, econometrics, finance, economic theory, international economics, monetary policy, statistics and mathematics. Advanced studies cover topics such as game theory, environmental economics, and law and economics. The curriculum for a graduate program in economics emphasizes theoretical and applied research methodology, analysis, and interpretation of findings. Furthermore, research assistant and internship work experience provide an extensive practical understanding of economics’ real-world applications.

Areas of Specialization

Economics is a vast field with several areas of specialization such as labor economics, international economics, health economics, behavioral economics, public economics, monetary economics, environmental economics, industrial organization, economic development, and econometrics.

Labor Economics

This field explores employment issues such as wages and salaries, labor force participation, working conditions, and employment benefits. Labor economists also study the impact of government policies concerning labor regulations such as minimum wage laws.

International Economics

International exchange of goods and services, capital, and labor requires the cooperation of various governments and institutions worldwide. International economics explore the impact of globalization, trade agreements, and exchange rates on individual economies.

Health Economics

Health economics examines how healthcare policies affect the medical industry’s performance and accessibility. The research also emphasizes how macroeconomic choices, such as government spending and taxation, affect national healthcare budgets and procedures.

Behavioral Economics

This field incorporates psychology and economics to understand how demographics make economic choices. Behavioral economics is unique because it recognizes the behavioral biases and heuristics that people implement in making financial decisions.

Public Economics

Public economics concerns the government’s role in the economy, including regulatory interventions, tax policies, public spending, and the distribution of income and resources. The research examines the rationale behind government intervention, including optimal levels of taxation and spending on social welfare programs.

Monetary Economics

Monetary economists study the impact of monetary policies on national economies. They research how interest rates and the supply of money impacts macroeconomic variables such as employment, inflation and economic growth.

Environmental Economics

Environmental economists explore the relationships between economic growth and the natural environment. They study how resource allocation and sustainability are affected by development choices and market pricing.

Industrial Organization

This field examines market competition. Industrial organization studies analyse market structures, mergers and acquisitions, industry regulation, and the impact on consumer competition.

Economic Development

Economic development focuses on economic growth in low- and middle-income countries, emphasizing the role of structural and institutional conditions in the promotion of economic development. This field analyzes the challenges of poverty alleviation, political stabilization, and long-term economic growth.

Econometrics

Econometrics applies statistical methods in economics to study causal relationships between variables. Econometricians use complex mathematical models to analyse, interpret and forecast economic data.

Career Prospects

Economists’ career paths reflect individual areas of specialization. In general, economists are employed by government agencies, academic institutions or private companies. In the United States, many economists work for the Federal Reserve System or the Bureau of Labor Statistics. Investment banking and financial services companies value economists for their insights concerning securities, macroeconomics, and trends in industry sectors. Private non-profit organizations often use environmental and health economists to assist in policy research.

Conclusion

Economics is a constantly evolving academic discipline that aims to improve our understanding of the world economy. The field provides an essential framework for policymakers in decision-making roles, enhances an individual’s financial and budgetary management skills, and serves as a foundation for business executives. The above-described fields of specialization provide rich and diverse career opportunities in different industries. Ultimately, by deepening our knowledge of economics, we can create and sustain economic growth while promoting a more harmonious relationship between society and the natural world.

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Australia wage growth hits decade-high, quarterly gains miss forecasts

Reuters

23-05-17 02:11

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Wages in Australia grew at their fastest annual pace in a decade in Q1 2008, with the wage price index up 0.8% on the quarter, although this missed expectations for a 0.9% increase, the Australian Bureau of Statistics has said. Annual pay growth rose to 3.7%, compared with revised growth of 3.4% the previous quarter. However, with the central bank already hiking rates 375 basis points to an 11-year high of 3.85%, analysts believe it is unlikely policymakers will increase interest rates.

https://www.reuters.com/world/asia-pacific/australia-q1-wage-growth-rises-by-37-quarterly-gains-missed-forecasts-2023-05-17/

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Wall Street is split on cutting China’s GDP after April’s data miss

South China Morning Post

23-05-17 01:56

Standard Chartered and UBS economists have stuck with their forecast that China's GDP will rise by 5.8% this year despite weak economic data in April. Retail sales, industrial output and fixed investment grew more slowly than predicted in the country during the month. Meanwhile, JP Morgan Chase and Barclays lowered their forecasts due to a loss in economic momentum. JP Morgan put its full-year expected GDP growth at 5.9%, down from 6.4%, while Barclays set a target of 5.3%, down from 5.6%. It also cut its Q2 GDP estimate to 1%, from the previous three months, at an annualised rate. The Bank of China also withheld applying economic policy measures.

https://www.scmp.com/business/banking-finance/article/3220801/wall-street-banks-are-split-chinas-growth-prospects-after-aprils-data-missed-forecasts

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Five things to know about the US debt ceiling

The Sydney Morning Herald

23-05-17 01:43

President Biden is engaging with Republicans and Democrats in Congress to resolve the ongoing stand-off over the US' debt ceiling. The current limit of $31.4tn has been reached, and the Treasury Department is currently suspending investments in some federal pension funds while borrowing from investors to maintain the limit. The Treasury has warned it might stop borrowing altogether and rely entirely on tax receipts to pay its bills from 1 June. Global financial markets would be affected should the US default, potentially leading to a recession and job losses, while there are calls to eliminate the limit.

https://www.smh.com.au/world/north-america/five-things-to-know-about-the-us-debt-ceiling-20230517-p5d915.html

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Wages growth hits 10-year high but buying power still down

The Sydney Morning Herald

23-05-17 06:57

Australian workers have experienced the strongest annual wage growth in a decade, according to data from the Australian Bureau of Statistics, but the rise remains within the Reserve Bank's forecasts, setting fears the pay packets will lead to an interest rate rise next month. Wages have grown by 3.7% in the 12 months to March 2021, marking the largest increase since September 2012, but inflation has eased, meaning that, when factored in, real wages have fallen by 3.2% over the past year.

https://www.smh.com.au/politics/federal/wages-growth-hits-10-year-high-but-buying-power-still-down-20230517-p5d8yg.html

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Japan exits recession despite export slump

Financial Times

23-05-17 05:18

Japan has entered a period of recovery following Covid, creating an exit from its technical recession. While the recovery has caused stocks in the country to skyrocket, it is primarily driven by tourism and consumers spending. However, economists warn that exports and manufacturing in Japan are still weak, not to mention the global economy's substantial risks in a post-Covid world. Despite a modest recovery, there is still a cautious optimism that Japan has reached an inflection point whereby wages and higher spending could loom on the horizon, which has driven the foreign investment that fueled the country's post-Covid recovery.

From January to March, Gross Domestic Product (GDP) in Japan grew at an annualized rate of 1.6%, well above economists’ forecast of 0.7%. Q1 data indicates that household spending has increased, which accounts for over half of Japan’s GDP, boosted by domestic tourism after the Japanese government repositioned Covid similarly to seasonal flu. Business investment has also increased, rising to a bigger than expected 0.9%. However, goods and services’ export fell 4.2%, the first drop in six quarters influenced by the global underproduction of semiconductors.

The expectation is for a modest recovery for Japan, with economists and investors closely watching the impact of a global economic slowdown or any future Covid-related measures that may present themselves. Yet, solid performance in consumer spending and tourism validates that there are still bullish signs of life in the Japanese market, which is the largest in Asia.

https://www.ft.com/content/ff28fdd1-bc05-4229-8abf-84ede5617280

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A billion new air conditioners will save lives but cook the planet

Japan Times

23-05-17 05:03

Demand for air conditioning is rising fast in countries experiencing population growth, rising incomes and higher temperatures, such as India, Indonesia, China and the Philippines. While this will have positive effects on public health and economic productivity, it could also have negative results for greenhouse gas emissions, as one of the coolants used by most air conditioning units is responsible for causing major climate damage. Efforts by wealthier, more temperate countries to regulate air conditioning have led to improvements in energy efficiency and reduced energy use from cooling appliances. However, purchasing a unit remains costly for many people in hot, poorer nations.

Most people in countries where demand for air conditioning is highest still largely rely on coal-fired power and can only afford the cheapest, least energy-efficient units. This presents a significant risk to climate stability, which, if unaddressed, could have devastating consequences for people and the environment.

The majority of global air conditioning demand continues to come from developed countries, but this is changing as more people in emerging economies embrace these appliances. By one estimate, there will be one billion more air conditioning units in the world by 2020, which could reinforce damaging climate trends and make it more difficult to mitigate the effects of global warming.

https://www.japantimes.co.jp/news/2023/05/17/world/billion-air-conditioners-save-lives-cook-planet/

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Yanis Varoufakis is back — and he has a plan

Financial Times

23-05-17 11:19

Yanis Varoufakis, leader of MeRA25 party and ex-Greek finance minister, has proposed his “Dimitra” plan, which permits Greek citizens to make payments without bank fees. Despite his plan being described as an alternative transaction platform, the economist founder of DeFi Advisors, Michael Nikoletos, warns it could potentially create “a parallel currency system” in the Greek economy. While Varoufakis is unlikely to win the parliamentary elections, his close following suggests a left coalition may be in for consideration. Proportional representation is said to give him prime negotiating power as coalition governments are formed.

https://www.ft.com/content/f3f12866-8476-4367-a74f-e5039f39c16c

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China home prices rise at slower pace as demand ebbs

Nikkei Asia

23-05-17 10:51

Chinese home prices rose in April for the fourth consecutive month, but the gains have slowed, indicating pent-up demand is fading. New home prices rose 0.4% compared to 0.5% in March, according to the National Bureau of Statistics. Investments, sales and imports sharply contracted in the wake of the coronavirus outbreak, leaving economists concerned that there may be a greater need for policy stimulus to secure economic recoveries.

https://asia.nikkei.com/Business/Markets/Property/China-home-prices-rise-at-slower-pace-as-demand-ebbs

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As Greek elections loom, parties vie for votes of 'lost generation'

Reuters

23-05-17 13:15

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Ahead of Greece's election on May 21, political parties are turning to social media platforms TikTok and YouTube to win over young voters frustrated by years of crises that have cost them their youth. Many young voters remain undecided and feel political pledges do not reflect the issues resilient in their minds, such as economic growth and inflation. Economists argue the scarring effects of lost income, skills and productivity, as well as a shrinking population worsened by the exodus of skilled young Greeks during the crisis, could spell problems for state finances down the line.

https://www.reuters.com/world/europe/greek-elections-loom-parties-vie-votes-lost-generation-2023-05-17/

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FirstFT: Sunak considers following US lead on Chinese investment curbs

Financial Times

23-05-17 22:19

UK Prime Minister, Rishi Sunak, has said that he is considering following the US's lead by imposing new restrictions on domestic companies investing in critical industries in China. US President, Joe Biden, has been drawing up a plan to limit investments in key parts of the Chinese economy, which is yet to be announced. Sunak also mentioned that placing further export controls on China would also be discussed at the G7 gathering. Meanwhile, Sunak has backed away from his promise to ban Confucius Institutes from operating in Britain in an attempt to improve UK-China relations.

https://www.ft.com/content/fdc660d9-0dc3-4d3d-b077-a3cbee78521e

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ASIA Japan leads the way, China feels the heat

Reuters

23-05-17 21:48

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Asian investors are eyeing several significant economic indicators from Japan and Australia on Thursday, as well as an interest rate decision from the Philippines. However, the main hope for a rebound in Chinese markets could be the prospect of a US deal on the federal debt ceiling, which has boosted stocks and the dollar. The mettle of that claim may be tested, however, after the poorest set of Chinese economic indicators in over six months caused a 1% decline on Wednesday. Nonetheless, Japan is on a high after Q1 GDP growth outperformed expectations and the Nikkei rose over 30,000 points for the first time in 20 months.

https://www.reuters.com/markets/asia/global-markets-view-asia-graphic-pix-2023-05-17/

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Failure to spot inflation dents central banks’ credibility

Financial Times

23-05-18 04:20

Central banks globally have been accused of failing to spot the degree to which inflation rates would rise and stick, despite record monetary and fiscal support. Almost all rate-setters failed to foresee inflation rising and then overestimated the pace of decline. Advanced economies are experiencing the most vigorous and enduring outbreak of inflation in a generation. The Bank of England is currently holding a “Festival of Mistakes” to celebrate lessons learnt from financial disasters of the past, instead of what some suggest should be more recent errors. Central bankers failing to identify soaring inflation have not only left themselves risking financial instability due to being forced to raise rates faster than is usual but threatened the credibility of institutions that rely on trust to steer the economy toward sustainable growth.

https://www.ft.com/content/1b0203bf-ad58-4189-ad90-38b59b24f236

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Morning Update: Sending B.C. cancer patients to U.S. for care will triple costs

The Globe and Mail

23-05-18 11:08

British Columbia (B.C.) will have to pay three times the cost for cancer patients who undergo radiation therapy in private US cancer centers due to long waiting times and outdated equipment in B.C.’s clinics. The Canadian Ministry of Health reportedly sends around 50 breast and prostate cancer patients each week to two clinics in Bellingham, Washington where they will receive five fractions of radiation therapy. Such a treatment would cost $3,854 in a regular Canadian clinic compared to $12,277 in private US cancer centers. However, this cost does not include other expenses such as travel, accommodation, and meal expenses for the patient and caregiver, which easily amounts to thousands more. Health-policy experts argue that the arrangement with private US cancer centers is the best option to provide quick relief to a pressured Canadian healthcare system as the long waiting periods can cause anxiety and delays in care for patients. Patients who receive urgent treatment are less likely to see their cancers metastasize, thereby relieving pressure on the healthcare system in the long term, according to health-policy experts.

https://www.theglobeandmail.com/canada/article-morning-update-sending-bc-cancer-patients-to-us-for-care-will-triple/

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Mortgage debt a ‘ticking time bomb’ as renewals come up, economists warn

The Globe and Mail

23-05-18 10:00

Canada's mortgage debt is a ticking time bomb and the pain for borrowers has barely started, warn economists from Desjardins Capital Markets. The bank's policy of more-or-less flatlining mortgage payments is storing up trouble and when refinancing time comes, holders will need to find bigger payments at the same time as prices soar. First-time buyers are in the line of fire with the Desjardins team forecasting an average 15% payment increase. Variable mortgages could be exposed to violent increases of up to 40%, they said. At this time, 40% of Canadian mortgages are variable loans.

https://www.theglobeandmail.com/business/commentary/article-mortgage-debt-crisis-renewals/

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Robert Lucas was a giant of macroeconomics

Economist

23-05-18 09:28

Robert Lucas, the economist who developed a statistical theory to explain how new government policies would change pre-existing economic models, passed away recently. The Lucas critique stemmed from a test Lucas applied to macroeconomic theory, which showed that relationships between employment and higher inflation in the US economy would become unstable if policymakers attempted to act on them. Lucas continued to research dynamics for the remainder of his career, focusing on how work effort evolves over time and how future predictions for industry spending are formulated. Lucas adopted the “rational expectations hypothesis", which assumed that actors in his models would expect what the model itself predicted. Rational expectations were not the same as flawless foresight, but they “eliminated the main intellectual basis" for fiscal and monetary fine-tuning of demand, he argued.

https://www.economist.com/finance-and-economics/2023/05/18/robert-lucas-was-a-giant-of-macroeconomics

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An Untested Oil Price Cap Has Helped Choke Revenue to Russia

NY Times

23-05-18 09:00

The US and Germany led global economic officials in a campaign to impose a cap on Russia's oil prices on the global market. The G7 nations were brought on board in June 2021. The cap appears to be diluting Moscow's attempts to sell oil at prices higher than leading contemporaries, resulting in falling revenues that are increasingly putting pressure on the country's spending effort in times of trouble. Nonetheless, some are sceptical about the long-term impact and efficacy of the tactic, stating that the data is unreliable and easily exploitable, with some concerned that claims of success have made the Biden administration reluctant to adjust their tactics, leading to consistent evasion and a consistent supply of crude oil at a premium. Either way, this policy is a significant escape hatch to removing Russian oil from the global market and deterring buyers from making deals with the country while highlighting the financial gain and market disruption nations need to consider when associating with Russian oil. Emerging markets and lower-income economies have seen the most significant benefit of reduced oil prices amidst an ever-changing global market.

https://www.nytimes.com/2023/05/18/business/g7-biden-oil-price-cap-russia.html?searchResultPosition=4

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‘Vicious feedback loop’: The Bank of Canada hiked rates to push inflation down — but it’s also driving inflation up

The Toronto Star

23-05-18 09:00

Statistics Canada has warned sticky inflation could be difficult to manage with rising mortgage costs, as more Canadians renew their mortgages at higher interest rates. The Consumer Price Index (CPI) reached 4.44% higher than it was a year ago, with mortgage interest and rent being the main driving contributors. As mortgage costs are slowly filtered into the CPI, they will continue to be included in inflation, discouraging the country's central bank from lowering interest rates. Ron Butler, a mortgage broker, said that if the Bank of Canada was to increase the prime rate by another 25 basis points "it would drive up mortgage costs further and we'd be in the exact same situation". Another factor contributing to the sticky inflation is the extending of amortization periods by homeowners, which keeps monthly costs in check but comes with high-interest rates for a more extended period.

https://www.thestar.com/business/2023/05/18/mortgage-costs-jump-28-per-cent-in-april-driving-an-inflation-feedback-loop.html

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U.S. existing home sales post second straight monthly decline

Reuters

23-05-18 14:04

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US existing home sales fell for the second straight month in April, with prices rising in roughly half of the country, which together with possibly higher mortgage rates could delay a housing market recovery. Sales fell in all four regions and tumbled 23.2% on a YoY basis in April. Additionally, shortage of building materials and persistently tight housing supply are making it difficult for prospective buyers to enter the market. First-time buyers accounted for 29% of sales, up from 28% a year ago, all-cash sales made up 28% of transactions compared to 26% a year ago while distressed sales, including foreclosures, represented only 1% of transactions.

https://www.reuters.com/markets/us/us-existing-home-sales-post-second-straight-monthly-decline-2023-05-18/

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U.S. weekly jobless claims fall more than expected

Reuters

23-05-18 12:50

US jobless claims slipped by 22,000 to a seasonally adjusted 242,000 last week, beating expectations, according to the US Labor Department. The figure for the previous week was 264,000 following a surge in claims for unemployment insurance in Massachusetts. The state's own Department of Unemployment Assistance said it had encountered "an increase in fraudulent claim activities"; however, unadjusted claims in Massachusetts fell by 14,042. Economists polled by Reuters had estimated 254,000 new filings.

https://www.reuters.com/markets/us/us-weekly-jobless-claims-fall-more-than-expected-2023-05-18/