As individuals, families, and nations, we confront difficult choices about how to use limited resources to meet our needs and wants. Economists study how these choices are made in various settings, evaluate the outcomes in terms of criteria such as efficiency, equity, and stability, and search for alternative forms of economic organization that might produce higher living standards or a more desirable distribution of material well being.
To illustrate the nature of economic inquiry, consider the provision of medical care. The nation does not now have—nor is it ever likely to have—enough doctors, nurses, hospitals, and medical equipment to treat every illness of every person to the fullest extent of existing medical knowledge. Medical care must somehow be rationed. Households must decide how much of their incomes to spend on medical care and insurance. Physicians must choose how much time to devote to their patients and which tests or treatments to prescribe. Students entering college must decide whether to pursue careers as physicians, nurses, or hospital administrators.
The "setting" of these decisions is shaped by government policies, such as those requiring certification of physicians, and immunization against certain diseases. Characteristics of market participants also shape the setting: How well informed are consumers about the prevention and the treatment of disease? Are hospitals run to maximize profits, or are they nonprofit institutions with other goals? Economists specializing in health care study how these factors influence the cost, availability, and distribution of medical care; and they attempt to determine how changes in the setting—for example, increasing government subsidies for preventive care—might affect the performance of the system.
The analysis of particular markets, such as those for medical care, communications, pollution permits, and higher education, is referred to as microeconomics. The other major branch of economic analysis is macroeconomics, which focuses on the behavior of an economy as a whole.
Macroeconomists study the determinants of aggregate output (gross domestic product), inflation, unemployment, and the balance of payments, again with an eye to identifying how changes in the setting might improve overall economic stability and growth.
Why Study Economics?
A student of economics will have a good understanding of how markets function. This knowledge is useful for a variety of entry-level jobs in government, industry, or finance. Many large corporations and labor unions employ economists to prepare forecasts and to examine developments in national or local markets that may affect future costs and profits. A rapidly growing area of employment for majors, especially those who have strong analytical skills in mathematics and statistics, is management consulting. Another is banking, both commercial banking and investment banking. Governments at all levels, including international organizations such as the United Nations, are also significant employers of economics majors for positions involving analyses of revenues and expenditures, cost benefit studies of programs in education, health, and transportation, etc.
Higher-level positions in industry or government usually require at least a master's degree. A doctorate is generally required for academic employment and for the top echelons in business or government. The study of economics also provides a good preparation for a professional degree in business or law. However, majoring in economics is by no means a prerequisite for admission to either business school or law school.
A two-quarter introductory survey, ECON 201 and 202, is the starting point for most economics students. The first quarter concentrates on macroeconomics, the second on microeconomics. These courses are very popular. Half of all Northwestern students, regardless of School, enroll in ECON 201.
Economics students are required to take, at a minimum, the Math Department Course MATH 220 Differential Calculus of One Variable Functions. However, students are strongly advised to continue their study of the calculus through the entire first-year calculus sequence. Many students, especially those considering advanced work in Economics, take additional mathematics courses. Students also take a course in probability and statistics.
The next step in an economics degree is a set of four intermediate courses that provide the tools for advanced and applied work. Most students take these courses in their sophomore year or the spring quarter of their freshman year. There is a two quarter sequence (ECON 310-1,2) in intermediate microeconomics, a course (ECON 311) in intermediate macroeconomics, and a course (ECON 281) in econometrics, the study of the use of statistical methods to analyze economic data.
In their junior and senior years, students apply the tools they have learnt to a variety of economic problems. The Department offers a wide range of courses each year, and economics majors have to study at least six of these areas. Courses are offered in economic history, macroeconomics and banking, the labor market, taxation and public spending, competitive strategy, economic regulation, the environment, and the economics of education, health care and transportation. In addition, there are also advanced courses in economic theory and methods.
Students can also obtain honors in economics. Normally this is accomplished by enrolling in a seminar series in the senior year and write, under faculty guidance, a thesis. The Department also offers the ability to obtain a combined BA and MA degree.
Details on the requirements for a Major and Minor in Economics, and more information on the Honors and BA/MA programs can be found in this section of our website. If you have additional questions regarding the undergraduate program, email us at email@example.com.
The Economics Community at Northwestern
The focal point of the undergraduate program in economics at Northwestern is the Department of Economics in the Weinberg College of Arts and Sciences. In addition to the forty-five faculty in the Economics Department, approximately twice as many economists in total can be found in other departments on campus including in the McCormick School of Engineering and Applied Science, the Kellogg School of Management, and the School of Education and Social Policy. Many of these faculty in other Schools and departments teach courses which have economic content.
Northwestern also has interdisciplinary research centers that conduct research and hold events that are of interest to economists. These centers include the Institute for Policy Research, the Transportation Center, and the Center for Mathematical Studies in Economics and Management Science.
More than half of Economics students complete a double major. The most popular other majors taken in conjunction with economics are Industrial Engineering in the McCormick School of Engineering and Applied Sciences, Political Science, History, Mathematics, and Psychology. Economics also has majors who are pursuing their degree in the Schools of Communication, Education, Journalism and Music.
Many undergraduates study economics in conjunction with an interdisciplinary major or minor. The International Studies adjunct major entails course work in the social sciences and humanities and draws on economics for the study of international trade, comparative economic systems, and developing nations. Urban Studies adjunct majors often do their required companion major in economics.
For students of high mathematical ability, the honors program in Mathematical Methods in the Social Sciences (MMSS) offers a unique opportunity to obtain rigorous training in the formal analytical methods of contemporary social science research. MMSS students must complete a major in one of the social sciences, and here again economics is a popular choice.
The minor in the Harvey Kapnick Business Institutions Program combines course work in economics with other areas to examine the ways in which business institutions shape societies and are shaped by them.