Quantitative economics is a field of specialization in economics that uses complex mathematical and statistical procedures to study and analyze economic phenomena and theorems. It generally focuses on the measurable characteristics of financial systems. This branch of economics is an enhancement of econometrics.
Econometrics is considered the study of quantitative techniques or procedures that are used in the verification of economic methods or the quantitative measurements that are used to make economic decisions. Quantitative economics and econometrics use the data that is obtained from statistical methods to make financial and economic analyses. From this, it can be noted that statistics, econometrics, and quantitative economics are closely related and dependent on each other.
The following are the main topics that are studied within the specialty of quantitative economics.
This is the main analytical method of quantitative economics. It studies economic outcomes by looking at them as functions of one or more predictor variables. These variables are determined by the data or information that is intended to be achieved by the analysis. For example, if the economic information required is the average income, the average income would be considered to be a function of predictor variables like the education level, the amount of experience or the gender of the individuals in question.
This is a systematic approach to analyzing the benefits of alternative business options, activities, and transactions. It is aimed at determining the best option that gives the most result while also preserving the most savings. It is used to compare the total investments made in a financial venture to the full benefits to be gained by the venture while comparing with the next best alternative venture. It also incorporates techniques like cost-utility analysis, economic impact analysis, risk-benefit analysis and fiscal impact analysis.
This is the process of making predictions about the economic conditions of a future date. These economic projections or forecasts can be made on smaller levels like within individual financial systems and within companies or on larger scales of aggregation like country GDP projections, future unemployment rates or even debt levels of countries. All companies set targets according to economic forecasting.
Their production level increment decisions and remuneration or employment decisions are all based on economic projections that companies make. Government institutions and international organizations like IMF and World Bank make economic forecasts to estimate the amount of financial input to direct into specific industrial or development projects.
Statistics is the branch of mathematics that deals with the collection, organization, and interpretation of data. Comprehensive knowledge statistical methods of analysis are imperative to enable one to study quantitative measurements of economic data. The study of randomness, probability and analysis f stochastic data in financial systems in quantitative economics requires statistical modeling and tools.
Quantitative economics is anchored in empirical research of data and its relation to various economic theories. Therefore, for satisfactory evaluation and application of economic theories to arrive at economic decisions, it vital to be competent with the imperative research methodologies of data collection.
Quantitative economics studies require strong computer proficiency, especially in numerical data analysis software like spreadsheets, statistical, and financial software. This is because of the vast amount of data that requires analysis, manipulation, and interpretation in the activities involved. In advanced levels, one may also need basic block modeling and programming knowledge for purposes of incorporating new variables and theories in computer software models.
Quantitative economics and econometrics give support to economic theories by providing them with empirical proofs. Quantitative economics also helps to forecast future economic conditions to prepare individuals, organizations, and countries of economic situations to come. It helps to evaluate the results and impacts of the set economic policies. Quantitative economics and econometrics in summary help to determine the feasibility of government, or business decisions by evaluating the market conditions of a business.
Considering how important the aspects of this branch of economics studies, it is evident that the employment opportunities that come with it are also equally significant. The following are examples of some of the jobs that you can look forward to with a quantitative economics major.
As a financial analyst, you will be responsible for aiding individuals of companies to make financial decisions by using statistical methods of data analysis to determine the market trends in business and investment opportunities.
Economic forecasters predict economic situations to come helping governments and organizations to align their business and financial decisions accordingly.
These professionals analyze the risks involved in business ventures and suggest solutions that involve the least amount of risk to individuals and companies.
This was a brief overview of quantitative economics, what it entails, and the kind of opportunities that come with it. If you would like more information please visit quantitative economics homework help.