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Core Competencies

Submitted by dfto on Wed, 07/11/2007 - 1:28pm

3.1 Objectives of a Bachelors Degree in Arts

An undergraduate degree in economics is intended to provide a classical liberal arts education with an emphasis on economics. Consistent with that tradition, graduates in economics are expected to have:

1. Analytical Reasoning skills that involve determining and bringing to bear relevant information and concepts to deduce logically consistent arguments or theories.

2. Critical thinking skills that involve the ability to critically understand and logically appraise the arguments of others.

3. Statistical skills that involve the ability to define and test an hypothesis using appropriate data and statistical tools, as well as understanding the strengths and limitations of statistical analysis.

4. Computer skills that involve the ability to use computers to gather data, perform analysis, and present arguments.

5. Information and communication skills that involve knowing where to find information, including electronic sources; understanding the reliability of different types of information; and being able to express complex ideas clearly in writing and verbally.

The development of these abilities provides students with the ability to think creatively—they are the skills required to be able to generate new knowledge or, what is the same thing, solve a problem. The process of research or problem solving encompasses the following steps.

(i) Formulating a Question: This involves learning how to recognize an interesting phenomena not previously understood and/or recognizing phenomena for which existing explanations are inconsistent.

(ii) Applying Analytical Skills to Generate Hypotheses or Explanations: This involves determining and bringing to bear relevant information and concepts and using logic to derive hypotheses or potential explanations that are internally consistent and are capable of falsification.

(iii) Empirical Testing of Hypotheses: This involves confronting the possible set of explanations with data and determining which hypotheses are supported by the data and which are inconsistent.

(iv) Communicating the Results: This involves efficiently communicating the research or problem solving process and the results.

3.2 Objectives for an Economics Major

Your adventure, from first day of classes to last, provides the opportunity for a remarkable transformation and growth in your intellectual capabilities and acumen. The process of becoming an economist involves intellectual development on three dimensions. First, students are expected to master the tools of an economist. Second, they are expected to be able to apply those tools to solve problems and/or create knowledge by conducting their own research investigations. Finally, they are expected to have a base of knowledge regarding the Canadian and International economies.

1. The Economist's Tool Box

The tools of an economist consist of economic theory and econometrics. Students are expected to understand and appreciate the strengths and limitations of economic theory and analysis, the rhetoric of economics (how economists communicate), and the various methodologies used in economics to determine what constitutes knowledge.

  • Economic Theory

Economic theory provides the structure, or framework, for economic inquiry. Economic theory has three elements that students are expected to master: 

(i) Students will become familiar with the foundation of economic reasoning. This involves a fundamental assumption—that individuals make choices based on their perception of their self-interest. The consequence of this assumption is that individual choices and actions depend on incentives. In turn, incentives depend on the interaction of preferences and constraints on time, income, technology, or ability. This framework explains how choices can be understood in terms of their incremental or marginal costs and benefits and how changing an individual's perception of either incremental costs or benefits will change behaviour.

(ii) Students will master equilibrium analysis which involves aggregating over the choices of individuals and insuring that the choices of individuals are consistent—that what individuals plan to do they are in fact able to do. Equilibrium analysis underlies how economists explain resource allocation in the economy.

(iii) Students will understand the strengths, limitations, and value judgments that underlie the notion of efficiency. Efficiency is the yardstick by which economists measure the social desirability of resource allocation.

  • Statistics/Econometrics

Statistics is a set of methods that involve the collection and analysis of data—quantitative measures of real world phenomena. These methods when applied to appropriate data allow us to answer questions such as: How much? How big? How often? and How different? Students are expected to master basic statistical techniques; acquire the ability to find, organize, and present relevant statistical data; and understand the use and misuse of statistics. Students are expected to become familiar with econometrics—the science and art of building and estimating economic models. Econometrics combines economic theory and statistics to test economic hypotheses, make predictions, and measure the empirical magnitude of economic effects. Theory only predicts the direction of responses, not the magnitude. Estimating the magnitude of the sensitivity of behaviour of individuals and organizations to changes in incentives is fundamental to validating hypotheses derived from economic theory and the effective formulation of government policy.

For instance, economic theory suggests that when the price of jet fuel rises, airlines will substitute away from its use. In the short-run they might substitute soapy water for jet fuel by washing their planes more frequently to reduce wind resistance. In the medium run they might stop painting their planes, since the more paint the heavier the plane. In the long run the manufacturers of planes might use more expensive, but lighter weight materials, such as carbon-fibre wing panels. Using econometrics it is possible to (i) test whether in fact airlines do substitute to other inputs and use less jet fuel as its price rises and (ii) determine how much airlines can reduce their use of jet fuel as its price rises. Does the use of jet fuel decline by 1%, 5%, 10%, or more when its price rises by 1%?

2. Thinking Like an Economist

A degree in economics provides students with the opportunity not only to learn economic theory and econometrics: students are also expected to be able to apply theory and formulate explanations of human behavior and the effects of institutions on resource allocation. The ability to apply economic theory provides students with a powerful and unique lens to view the world. An important aspect of obtaining a degree in economics is this development of a student's cognitive and analytical abilities. Students are expected to be able to formulate testable empirical hypotheses that are consistent with the student's theoretical explanation and that are implementable given data, statistical, and time constraints. Finally, students are expected to be able to communicate in clear and understandable terms the essence of an economic problem and its solution. In short, students are expected to combine the core competencies of a BA with the specific toolbox of the economist to consider economic problems or implement and conduct independent research in economics.

3. Knowledge Base

Economics students at the University of Calgary learn the tools and applications of the economist's trade in a context which also insures that they develop the following knowledge base:

  • an understanding of market economies, market institutions, the strengths and limitations of markets, the rationales for government intervention.
  • the role of economics in public policy debates and its role in promoting the welfare of society.
  • an understanding of different economic systems and their strengths and weaknesses.
  • an understanding of the functioning of the international economic system and its importance to national economies throughout the world.
  • an understanding of the development of the Canadian and world economies.
  • an understanding and appreciation of the importance of political and historical factors in the development of economic institutions and ideas.

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