Sunday, August 3, 2008

My Experience: Advantages & Disadvantages of Being An Economist

Advantages of being an economist:

1. Better informed of the complexity out there. An Economist is able to address questions like

(a) What caused the sub prime mortgage market crisis?
(b) Has US & UK run into a recession?
(c) What triggers hyperinflation in Zimbabwe?
(d) What is the impact of continuous oil subsidy by Malaysian government?
(e) How does console industry like Xbox, PS3 & Nintendo Wii survive in a competitive price-war industry?
(f) Will the tax rebate in US helps to revive its economy?

If you can give a clear answer to more than half of the queries above, rest assured you’re one of the most knowledgeable person on the street.

2. Advantageous in making certain financial decision. Some people may think that they can make more money again by investing in the same trust funds that previously provide them with high return. Feeling curious, I had personally run the data of the funds & come up with several statistical models. All the models report the same finding & that is, it will not do so again this year & I’m right (I could be lucky). Finance & Statistics are also part of Economics

3. Profession. We have Economist everywhere. They can be in colleges & universities, banks, rating agency, securities firms etc. Some of these pay an experienced Economist up to 5 figures. They are an asset to the society given their high ability to influence the standard of living of an average man on the street. For e.g. increasing the interest rate can put a borrower into worse debt, reducing personal income tax if done significantly can help businesses everywhere to grow etc.

4. Social tools. Believe it or not, sometimes to get hook up with influential people you seriously need some economic knowledge. Why? These people can be prominent businessmen or influential politician that talks about economics, interest rates, oil price etc all the time

5. Potentially gain influence. If you are really an experienced & knowledgeable Economist, you can talk your way out & gain respect from people from all walks of life. It can be in a small office, forums to huge international conference or even during political campaign. Some Economists or politician can also manipulate the current economic issues to their own interest

Disadvantages of being an Economist:

1. Running into arguments too soon & too often. Normally Economists have their sophisticated view regarding any issue which may be completely different from how an ordinary person on the street perceive. E.g. many oppose me when I say that oil subsidy is not a good thing, India is the main concern rather than China, property price will fall etc despite I’m able to prove the facts & the figures. Worse case scenario is debating with another Economist. Rest assured it is a long battle

2. Think too much. Sometimes an Economist thinks too much & simple issues are being twist wired despite they are not. This arise as the subject has endless possibilities & Economist will try to look at it from various angles like the pros & the cons. May also bring private costs to the bearer e.g. not having enough sleep as think too much over the night

3. Some may feel you’re boring. This is very true. Some people just want nothing but leisure in their life & they just can’t take it once you cross over to topics like politics, oil price, banks increasing interest rate again etc.

4. Wrong decision. Economist will sometimes make a mistake. This is largely due to too much of assumptions & over simplifying. E.g. I may from time to time tell people that now it is the best time to own a property in UK or even advise some parents to send their child to UK for higher education as our RM has strengthen against pound sterling. However I could have oversimplified the situation as there are just too many hidden costs that we couldn’t possibly think off at the moment e.g. legal issues, opportunity costs of money etc