What is economics? This is a question that has been bouncing around my head these past few months, especially in light of the Covid-19 situation and the accompanying zeal with which the Federal Reserve unleashed its monetary policy throughout the United States economy. As a discipline, economics operates in a bit of a weird and undefined area. Its reputation certainly does not have an aura of mechanical difficulty that one sees in mathematics or science, nor does it seem to have the polished sophistication of the humanities. This lack of a clear identity has also probably contributed to its general unpopularity within highschool curricula. This is an unfortunate case that I hope resolves as time passes. There are many reasons why economics, especially now, should be a focus for students early in their academic careers: economics is practical, interdisciplinary, and contemporary.
One common criticism of secondary school education is the lack of classes focused on “adulting.” How does one pay bills? What is a loan? When are taxes due? Why should I sacrifice part of my paycheck for a 401k? It took me until after college to pay attention to these questions. The only reason why I have an IRA account is because my parents forced it upon me. Thank goodness for that! Gaining insight into many of these financial complexities, like any investment, should bring benefits in the long run.
Studying economics demands students to take into account a plethora of concepts and perspectives; while students are expected to utilize mathematical concepts, they are also expected to evaluate how society can be organized or how society should operate. This one of the first lessons they learn, the concepts of positive economics and normative economics. The first asks students to stick to facts, measurements, graphs, and equations, to determine the flow of resources. The second focuses the students to consider what these implications could mean, to philosophize whether our society can be better or whether it even should change at all.
Most importantly, the modern era is the age of mass trade and business. As the world becomes more globalized, having an understanding of currency, trade deficits, and capital allocation will continue growing to be an attractive skillset. On a closer to home scale, having an understanding of economics can help individuals plan out their own business models. Economics is simply too great a part of our daily lives to ignore. Bill Clinton’s famous campaign slogan “It’s the economy, stupid,” has never not been true.
I write this short blurb mainly in reflection of the unprecedented times that we live in. Covid-19 has placed the world on what is, hopefully, a temporary slow-down. The economy is undergoing the demand shocks reverberating throughout various sectors, and it really feels like no one knows what will happen next. At least, that is how I feel. Time will tell whether or not the US government has taken the correct approach to this pandemic. What I do know is this: we need to keep a close and reflective watch on this period in time. This will be one for not only the history books, but it will also be a case study in economics to come.