A managerial economist uses specialized knowledge and analytical skills to assist the management of an organization in decision-making and future planning. Managerial economics combines theory with practical applications in problem-solving pertinent to a specific business or industry.
Role of Managerial Economist
The role of managerial economists is to provide their expertise in the business planning process of a firm. They look at changes in macroeconomic indicators, such as national income, population and business cycles, and their impacts on the functioning of a business. Managerial economists assist top management in the decision-making process regarding aspects of the business such as changes in price, investment plans, types of goods or services to be offered, expansion, inventory forecasting and replacement of equipment.
Scope of Managerial Economics
The role of a managerial economist requires the ability to advise management about the following:
- Business environment: Growth trends in national and global economy
- Business planning and forecasting: Interpretation of economic trends and industry outlook relevant to the organization
- Business operations: Internal operations, including pricing, wages, profits and investments
- Economic intelligence: Facts and figures for the preparation of a firm's annual report
- Special problems: Specific to a business or industry, including market research, investment analysis, production, pricing, trade and public relations and capital projects
- Advocacy: Bridging aspects of the business and industry with government policy-making
Education Requirements for a Managerial Economist
The first step to becoming a managerial economist is to earn a bachelor's degree. A major in economics provides you with theoretical knowledge. A major in managerial economics, available at a growing number of colleges and universities, prepares you to work with the executive management team of an organization to solve problems and plan for the future. Coursework typically includes macro- and microeconomics, calculus, statistics, accounting, quantitative analysis, business law and computer science.
Master's and doctoral degree programs are available in applied economics and managerial economics. Higher-level study affords the opportunity to build expertise in the use of theoretical and empirical models for analysis and decision-making.
Most private-sector jobs require a managerial economist to have a master's degree or Ph.D. Academic and research positions require a Ph.D. Economists with a bachelor's degree have the best opportunities for entry-level positions in state and federal governments.
A Managerial Economist's Work Environment
A managerial economist typically works from an office during regular business hours. The field has a wide variety of applications, in industries including accounting, agricultural policy, banking, environmental policy, finance, food production and distribution, international management consulting, marketing and sustainability consulting. Managerial economists must be able to work well under pressure. They need excellent analytical and problem-solving skills. They also need excellent communication skills, as a large part of their job is writing reports and making speeches to management.
Salary and Job Outlook
The U.S. Bureau of Labor Statistics (BLS) tracks data on all civilian occupations. Although figures are not available for the specialty of managerial economics, the BLS reports that the median annual pay for all economists in 2018 was $104,340. Median pay means that half in the profession earned more, while half earned less.
The job outlook for economists is expected to grow by 8% through 2028, a rate faster than average when compared to all other jobs. Employment prospects are best for individuals with at least a master's degree, strong analytical skills and experience with statistical analysis software.
The importance of managerial economics in decision-making cannot be underestimated. Managerial economists are experts in macro- and microeconomics, able to advise management on global economic trends as well as the impacts of individual, internal actions of the firm.