What is Economics and Business Economics?

Definition

 According to the van Dale, economics is "the science that has the human pursuit of wealth as its object of investigation." But what does this really say? To start with, it says that man pursues wealth. When you look upwealth, you then read that this is a "state of societal prosperity". We could next look up prosperity , but - intuitively- economics is about money while the dictionary does not say a word about this. Luckily, Wikipedia does. According to Wikipedia, "Economics is a social science that studies the production, distribution, and consumptionof scarce goods and services." Money is a scarce good that is unevenly distributed. Just why this is the case andthe consequences of an uneven distribution of income and wealth are the central questions in the science of economics. And these questions can be asked at the micro-level (household), the meso-level (industry) and themacro-level (countries).Business Economics has developed itself into a sub-science within economics. Business economics isconcerned with predominantly the economic problems of businesses. In this sense, some regard businesseconomics as a form of micro economics. It is also sometimes referred to as the interface between businessadministration and economics.There are other areas of economics with specific questions, such as development economics, feministeconomics and economic geography. All of the above questions and areas have in common that they concernmaking choices and the consequences thereof. As an economist, you learn to ask questions. And to answer these questions, you do research. This research canbe conducted in a variety of manners, and just how you do that is what you learn in Nijmegen. As an economist,you can ask questions about all sorts of things as long as the question has to do with choices and theconsequences of such.

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Everything is economics!

Economics is the science that studies choice behaviour. We make choicesabout all kinds of things and every day. Individuals do this.Shall I invest in yet another study?  Shall I file for divorce or stay? Shall I save for a Nintendo Wii or pay in instalments?  Shall I deposit my money in a foreign

savings account? Shall I buy a cheap pair of jeans or a pair that has not been made using child labour?  Businesses also make the same types of decisions on a continual basis. Should we lower the price due to somuch competition? Should we merge with company Y?  Is contracting out our financial administration abroad cheaper than doing it ourselves? Politicians, organizations and governing bodies also make choices because they can only spend their moneyonce. They ask themselves if they can bring in more money via taxes or whether they should borrow for thispurpose. Should they invest in education or the military? Or should they simply pay off the national debt? Thereare just as many questions as there are answers and directions within the science of economics. Economistssearch for explanations which provide an answer to such questions as the following.

  How does the price of a product affect the behaviours of people/families/consumers? (Micro-economics)

  What is the effect of a stagnating housing market on the constructionsector? (Meso-economics)

  How can the rapid economic growth of the "Asian Tigers" in the 1980sand 1990s be explained?)

  What is the influence of a new performance measurement system onthe profits of an organization? (Business Economics)

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Economic research

 

To answer such questions, a great deal of research is conducted in the field of economics: Theoretical research as well as empirical research with actual data. Small- and large-scale studiesare conducted. Experimental and case studies are called for. And so forth. When you study Economics andBusiness Economics, you learn which type of research to undertake to answer your questions. You also learn toreport your research results in a clear and understandable manner in order for others to benefit from your findings. And this is important because policy-makers, directors and politicians have also noticed that everythingis about economics. But they obviously cannot answer every question themselves.So how do things go in practice? Two examples.Example 1: Education in developing countries

Imagine that you are interested in really big questions. Just as the United Nations, for example, you ask yourself why it is the case that not all children in the world go to school. Why is education so unevenly distributed acrossthe world? Why do many girls not go to school? And what are the consequences of girls not going to school for the position of women in society, democracy and economic growth?If you contemplate these questions, you will quickly see that they are not easily answered. There is not one singlecause to be pointed to. The decision of parents to send their children to school or not depends upon the familysituation but also upon factors in the village and the country in which the family lives. A family in a poor countrymay already have difficulties acquiring enough food for the family and may therefore simply not be able to send achild to school. The availability of a good school may also be a problem. Is there a school in the area with enoughgood teachers? What happens if the government does not spend any money on schools and education? Whathappens to the futures of the children and the country under such circumstances? The decision to send a child toschool thus depends upon a number of factors occurring at different levels. And research must keep this in mind.If you want to know more about the factors which generally influence whether a child goes to school or not,survey research is best undertaken. It is, namely, impossible to undertake in-depth interviews with children andtheir parents in all developing countries.The next step is to delve into the literature and read what others have found. You pose hypotheses and try to testthese. You need not assemble your own data at this point; rather, you bring together the findings of others.Figures on schools, teachers and so forth are also available. If you find those on the internet, for example, youcan add these to your growing database. Combine this information with information on the countries, and it ispossible to answer all the questions at all levels. In such a manner and with the aid of statistical analyses, youcan determine which factors play a role in choice behaviour and when. These insights can be of interest to notonly economists but also to government agencies, organizations and development workers. With the newlygained insights, they can spend money on measures which really make a difference. And this will hopefully leadto education for everyone, democratization and development.

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Example 2: The steering of employees in companies

 A completely different type of study concerns the manner in which managers in companies apply businesseconomic instruments such as a budget system to steer employees. Why is a certain system chosen? How is thesystem implemented and what are the effects on processes within the company? Is the desired efficiencyachieved? Is the system used as it is intended or is the new system only a pretty label for the outside world whilelittle has, in fact, changed? To gain insight into these matters, the qualitative case study is a good researchmethod. On the basis of interviews, observations and the analyses of documents, data is collected. Thisinformation can then be summarized, incorporated into databases and analyzed. This can lead to new insightsand/or the extension of existing theory. A very thorough knowledge of the existing literature and theories isessential for use of this research method.

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Why study Economics and Business Economics?With an economics study, you lay a broad basis for a variety of directions in the future. Economics and BusinessEconomicsis a socially relevant study which provides insight into the choice behaviour of individuals,organizations and government bodies. You have a good career perspective, and you can find employment inbusiness, government or international organizations.Summarized briefly, there are five reasons to study Economics and Business Economics.

 

1. You w il l be in the middle of cu rrent events. The problems which you study as an economist are always topical. Just think of the credit crisis, governmentstimulation plans or the privatization of health care. All of these receive widespread discussion. But also think of European cooperation, development aid, the World Trade Organization and the environmental effects of economic growth.2. You wil l know the economic p ol ic ies of local, nat ional and European governments.

 As an economist, you are - thanks to your scientific education - particularly well-prepared to evaluategovernment policy and contribute solutions for societal problems.3. You wil l have a surpr is ing ly broad career perspect ive.

Economics graduates work in the most diverse functions. You can work as an economic advisor, policy-maker,researcher, business economist, accountant or financial specialist. You can work for local, regional or nationalgovernments; for large or small business enterprises; for public organizations; or for international organizations.4. You wil l be prepared to look across bo undaries.

 As an economist, you will be prepared to look across boundaries. This is because economists learn how theeconomies of other countries function. Economists know how countries interact with each other and the rolewhich international organizations can play in this. Economists know the lay of the land in Brussels and theEuropean Union. Economists in Nijmegen also cross the boundaries of their own field of study by learning abouthow lawyers, sociologists, political scientists and managers view economics. You will also be given anopportunity to study in a foreign country and taste other manners of studying economics via excursions abroad.5. You w il l be able to contr ibute to s ociety.

 As an economist, you are qualified to make a critical and scientifically well-founded contribution to thegovernance of society. As an economist, you can see through society, know how to distinguish hypes from realtrends, see the connections between international and European dimensions of policy, make the relevantcomparisons with other countries and distinguish - in particular - sound reasoning from hollow rhetoric. You arecritical because you are qualified to make an independent judgement. You are scientific because your analyticskills have been shaped by the rules of scientific investigation. And this expertise makes you a very attractiveparty for employers.