Majoring in Economics at MIT
Aims of the Undergraduate Program for Majors
The undergraduate curriculum in economics is designed to:
- provide a firm grounding in modern economic theory;
- instill the capacity for independent thought about economic policies and problems;
- develop the capacity for quantitative research, and
- provide basic descriptive knowledge about the US and the world economy.
Undergraduate study of economics is not professional training in the sense that undergraduate training in engineering typically is. Rather, it is an introductory study of a particular discipline, much more comparable to undergraduate study of biology or physics. Some recent graduates of the Economics Department have moved directly into employment in industry and government. Others have gone on to further studies in law, business, economics, and a variety of other fields.
Direct Employment Opportunities
An undergraduate major in economics opens many possibilities for employment. Managerial training programs in many firms, including banks, other financial institutions, and large manufacturing companies, accept economists in substantial numbers. There are also many opportunities for employment in government at the state, federal, or international levels. In addition, a growing number of research and consulting firms employ large numbers of economists in such areas as forecasting, industry analysis, and litigation.
Preparation for Business or Legal Education
An undergraduate economics training provides excellent preparation for either business school or the study of law. Since managers are always confronted with decisions about the allocation of scarce resources, it is not surprising that economics provides a useful background. Most business schools require their students to take several economics courses and look favorably on undergraduate training in this field. Several electives in the Course XIV curriculum focus on the analysis of firms, industries, and on government regulation of the corporate sector. In addition, as legal cases increasingly turn on points of economic analysis, many law schools are requiring their students to obtain a basic knowledge of economic principles. Some law schools offer specializations in Law and Economics, and virtually all regard an undergraduate major in economics as excellent preparation for legal study and practice. Electives which consider the economic effects of taxes and other public policies are especially relevant for students interested in analyzing legal institutions.
Preparation for Graduate Studies in Economics
The Department of Economics has prepared many undergraduates for study in the best graduate economics departments in the United States and abroad. Former undergraduates find that they are exceptionally well prepared for graduate school by virtue of their Course XIV training, since juniors and seniors often take subjects comparable to those in many graduate schools. Undergraduates can also receive advice about subjects in mathematics and statistics which will help prepare them for subsequent graduate study in economics. Many former Course XIV undergraduates have received doctorates and are now engaged in teaching and research on the college and university level. Others are currently employed in industry or government.
Economics as a Double Major
Some undergraduates may wish to combine economics with other undergraduate majors. The economics curriculum is particularly well-suited to use in double majors and has frequently been combined with mathematics, physics, civil or electrical engineering, political science, and other fields. To obtain a second major in economics, a student must satisfy all of the departmental requirements for the economics major.
The Undergraduate Curriculum
The Course XIV Program leads to the degree of Bachelor of Science in Economics. In addition to fulfilling the 17 General Institute Requirements1, an economics major must take the following subjects2:
- 14.01 Principles of Microeconomics
- 14.02 Principles of Macroeconomics
- 14.04 Intermediate Microeconomic Theory
- 14.05 Intermediate Applied Macroeconomics
- 14.30 Introduction to Statistical Methods in Economics (or 6.041/6.431, or 1.010, or 18.600)
- 14.32 Econometrics
- 14.33 Econ. Research & Communication
- Thesis (14.33 is a prerequisite.)3
- 60 units of Economics Electives (or five full subjects)
1Note that up to three Economics elective subjects may be used in partial satisfaction of the HASS requirement, that 14.30 (Statistics) may be counted toward the REST requirement, and that 14.33 (Economics Research and Communication) may be used to satisfy the Institute laboratory requirement.
2Students must earn grades of C or better in 14.01, 14.02, 14.04, 14.05, 14.30, and 14.32 in order to fulfill departmental requirements.
3May be replaced by an elective subject in economics.
Courses 14.01 and 14.04 provide a strong background in microeconomic analysis, and 14.02 and 14.05 do the same for macroeconomics. These are the two broad and fundamental areas of modern economics. 14.30 and 14.32 give a grounding in techniques for analyzing data and testing economic models. 14.33 requires a term paper that analyzes a body of data on an economic question.
The 60 units (or five full subjects) of electives may be satisfied from the following list of undergraduate subjects designed generally to enrich the background of the student in economic institutions and the analysis of policy problems. Especially recommended are those that are designed for more advanced undergraduates, with the prerequisite of intermediate microeconomics or macroeconomics. These subjects include 14.13, 14.16, 14.26, and 14.45. The full list follows:
- 14.06 Advanced Macroeconomics
- 14.11 Topics in Economics
- 14.12 Economic Applications of Game Theory
- 14.13 Psychology and Economics
- 14.15J Networks
- 14.16 Strategy and Information
- 14.19 Market Design
- 14.20 Industrial Organization and Competitive Strategy
- 14.21J Health Economics
- 14.23 Government Regulation of Industry
- 14.26 Economics of Incentives
- 14.27 Economics and E-Commerce
- 14.36 Advanced Econometrics
- 14.41 Public Economics
- 14.42 Environmental Policy and Economics
- 14.43J Energy Decisions, Markets, and Policies
- 14.44 Energy Economics
- 14.45 Financial Economics
- 14.51 Urban and Regional Economics
- 14.54 International Trade
- 14.64 Labor Economics and Public Policy
- 14.70J The Development of Medieval Economies
- 14.71 Economic History of Financial Crises
- 14.73 The Challenge of World Poverty
- 14.74 Foundations of Development Economics
- 14.75 Political Economy and Development
UROP's do not count toward the department elective requirement.
Students whose primary major is economics may not concentrate in economics; students whose secondary major is economics may concentrate in economics.
Economics majors have the option of taking up to two Sloan classes as restricted electives, chosen from 15.021J, 15.411, 15.402, 15.433, and 15.437. If students take 15.411, they may not take 14.45 and receive restricted elective credit for both.
Further training in mathematics beyond the Institute requirements is strongly recommended, especially if students are interested in graduate study in economics. Subjects such as 18.03 (Differential Equations), 18.100 (Analysis I), and 18.06 (Linear Algebra) are especially valuable. Students with a special interest in formal statistics and econometrics would be well advised to substitute for 14.30 a subject such as 18.600 (Probability and Random Variables).
The Economics Department believes that some experience with actual economic research is a vital component of MIT Economics training. In addition to the thesis, there are three primary channels through which undergraduate majors acquire research experience. The first is through the Project Lab which is required as part of 14.33 (Economics Research and Communication). Each student in 14.33 prepares a study of an applied economics question. Topics vary widely, from the measurement of how price changes affect the demand for particular products to studies of how monetary or fiscal policies have affected interest rates, unemployment, or output in various countries. The Project Lab in 14.33 provides an excellent opportunity for undergraduate majors to combine their knowledge of economic principles from intermediate subjects with careful data analysis to study a topic of their own choosing.
The second method by which undergraduate majors become involved in research is through the MIT Undergraduate Research Opportunities Program (UROP). Many faculty members in the Economics Department direct UROP projects. The research projects and researchers involved change from year to year; brief descriptions of current projects can be found in the UROP booklet issued by the UROP office. Past projects have included studies of competition in the telecommunications market, the effects of taxes on corporate decisions, the impact of interest rates on individual savings decisions, and the impact of direct foreign investment on developing economies. Most UROP projects provide an opportunity for one-on-one contact between a student and a faculty member. They are designed to teach undergraduate majors how economic research is carried out and to prepare them for subsequent research projects of their own. For further information about the UROP program, contact the department's UROP advisor.
Other opportunities for undergraduates to become involved in research are provided through summer employment on research projects being directed by faculty members in the department, or through summer internships in government, industry, or research organizations. Each summer a few students who have made contact with faculty members through classes or UROP projects are employed as part of research teams consisting of faculty members, graduate students, and undergraduates. There is no surefire way of obtaining these jobs, but UROP involvement is often a first step. Alternatively, interested students should contact faculty members whose research appeals to them to investigate the possibility of summer employment.