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 up wealth, 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 consumption of scarce goods and services." Money is a scarce good that is unevenly distributed. Just why this is the case and the 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 the macro-level (countries). Business Economics has developed itself into a sub-science within economics. Business economics is concerned with predominantly the economic problems of businesses. In this sense, some regard business economics as a form of micro economics. It is also sometimes referred to as the interface between business administration and economics. There are other areas of economics with specific questions, such as development economics, feminist economics and economic geography. All of the above questions and areas have in common that they concern making choices and the consequences thereof. As an economist, you learn to ask questions. And to answer these questions, you do research. This research can be 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 the consequences of such. back to top [bw]

Everything is economics!

Economics is the science that studies choice behaviour. We make choices about 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 so much 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 money once. They ask themselves if they can bring in more money via taxes or whether they should borrow for this purpose. Should they invest in education or the military? Or should they simply pay off the national debt? There are just as many questions as there are answers and directions within the science of economics. Economists search 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 construction sector? (Meso-economics) How can the rapid economic growth of the "Asian Tigers" in the 1980s and 1990s be explained?) What is the influence of a new performance measurement system on the profits of an organization? (Business Economics) back to top [bw]

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 studies are conducted. Experimental and case studies are called for. And so forth. When you study Economics and Business Economics, you learn which type of research to undertake to answer your questions. You also learn to report 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 everything is 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 across the 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 single cause to be pointed to. The decision of parents to send their children to school or not depends upon the family situation but also upon factors in the village and the country in which the family lives. A family in a poor country may already have difficulties acquiring enough food for the family and may therefore simply not be able to send a child to school. The availability of a good school may also be a problem. Is there a school in the area with enough good teachers? What happens if the government does not spend any money on schools and education? What happens to the futures of the children and the country under such circumstances? The decision to send a child to school 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 and their 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 test these. 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, you can add these to your growing database. Combine this information with information on the countries, and it is possible to answer all the questions at all levels. In such a manner and with the aid of statistical analyses, you can determine which factors play a role in choice behaviour and when. These insights can be of interest to not only economists but also to government agencies, organizations and development workers. With the newly gained insights, they can spend money on measures which really make a difference. And this will hopefully lead to education for everyone, democratization and development. back to top Example 2: The steering of employees in companies A completely different type of study concerns the manner in which managers in companies apply business economic instruments such as a budget system to steer employees. Why is a certain system chosen? How is the system implemented and what are the effects on processes within the company? Is the desired efficiency achieved? Is the system used as it is intended or is the new system only a pretty label for the outside world while little has, in fact, changed? To gain insight into these matters, the qualitative case study is a good research method. On the basis of interviews, observations and the analyses of documents, data is collected. This information can then be summarized, incorporated into databases and analyzed. This can lead to new insights and/or the extension of existing theory. A very thorough knowledge of the existing literature and theories is essential for use of this research method. back to top [bw]

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 Business Economicsis 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 in business, government or international organizations. Summarized briefly, there are five reasons to study Economics and Business Economics.

1. You will be in the middle of current events. The problems which you study as an economist are always topical. Just think of the credit crisis, government stimulation 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 will know the economic policies of local, national and European governments. As an economist, you are - thanks to your scientific education - particularly well-prepared to evaluate government policy and contribute solutions for societal problems. 3. You will have a surprisingly broad career perspective. 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 national governments; for large or small business enterprises; for public organizations; or for international organizations. 4. You will be prepared to look across boundaries. As an economist, you will be prepared to look across boundaries. This is because economists learn how the economies of other countries function. Economists know how countries interact with each other and the role which international organizations can play in this. Economists know the lay of the land in Brussels and the European Union. Economists in Nijmegen also cross the boundaries of their own field of study by learning about how lawyers, sociologists, political scientists and managers view economics. You will also be given an opportunity to study in a foreign country and taste other manners of studying economics via excursions abroad. 5. You will be able to contribute to society. As an economist, you are qualified to make a critical and scientifically well-founded contribution to the governance of society. As an economist, you can see through society, know how to distinguish hypes from real trends, see the connections between international and European dimensions of policy, make the relevant comparisons with other countries and distinguish - in particular - sound reasoning from hollow rhetoric. You are critical because you are qualified to make an independent judgement. You are scientific because your analytic skills have been shaped by the rules of scientific investigation. And this expertise makes you a very attractive party for employers.