How to Choose the Best Economics Program?

Answer 1

If you are interested in economics, then you may not know exactly what you are getting into. Economics is still a rather new discipline that hasn’t quite reached the level of Biology, chemistry, or physics in its precision. Instead, it’s closer to a social science like psychology. If you decide to study economics, then you will most likely learn a form of Keynesian economics. While this is undoubtedly the best course of action if you would like to obtain a professorship at a university or a position working for the government, it may not be the best field of study if you are interested in learning a sound theory.

A good alternative to mainstream economics may be an Austrian School economics program. This brand of economics has had a much better track record of accurately predicting events in the economy. While all of the Keynesian economists were scratching their heads over the housing bubble and credit meltdown, the Austrians saw it coming from a mile away.

There are a few fundamental differences between the Austrians and the mainstream economists. The Austrian economists think that GDP is a bogus statistic that doesn’t really reveal very much information. GDP is calculated by the formula C + I + G = Y, where Y is GDP, C is consumer spending, I is investment, and G is government spending. The Austrian School says that government spending shouldn’t be in the equation at all. It is really only a measure of taxation, which can only hurt the economy. They further say that C should be broken down into consumer spending and savings. Savings always represents either future consumption or future investment.

GDP doesn’t calculate savings at all, which is why Keynes said that saving is bad for the economy. The Austrian School recognizes that savings will eventually be spent in the future, so it is fallacious to say that saving hurts the economy.

Although this is merely one major difference between Keynesian economics and Austrian economics, there are a few others. You might want to take an introductory course in a few different approaches to find out which one makes the most sense to you.