Differences in Research Focus
Many people think that Economics and Finance are two separate disciplines, but Finance is actually a sub-discipline of Economics, and this is the biggest difference between the two. Economics is actually a branch of social science and a foundational discipline.
Economics studies various economic activities and corresponding economic relations and the laws of their operation and development at different stages of human society's development. The main questions studied are how the economy grows, how monetary policy and fiscal policy should be formulated, and how they affect domestic enterprises, among other policy and decision-making issues.
Finance is an applied discipline, generally located in the business or management schools of universities. It studies economic activities that involve the exchange of money and monetary funds and aims to solve practical problems faced by individuals, households, and companies, such as asset allocation and the nature and selection of investment tools. In summary, Economics is more like quality education, while Finance is more like skills education. Economics studies theory and laws, while Finance leans more towards practical application.
However, this does not mean that Economics and Finance are contradictory; on the contrary, they are complementary and inseparable. For example, understanding the macroeconomic situation is very helpful for investment decisions. In fact, there is a type of investment strategy called macro hedging strategy that requires a high level of knowledge in macroeconomics. Similarly, companies' project selection should also consider the macro situation, policy trends, and so on.
Different Employment Directions
As far as undergraduate graduation is concerned, there is almost no difference in employment between the two majors, and most students still focus on entering banks. However, recruiting agencies know that the professional knowledge learned at the undergraduate level is very limited, so those who enter banks generally perform basic work and do not require a strong professional background.
After graduating from postgraduate studies, the specific directions within Economics and Finance may differ, but there is also a lot of overlap.
Economics majors are more suited for macro research, investigative analysis, and non-profit, non-business departments, such as academic research institutions, policy research offices, various economic administrative departments; macro research departments of large enterprises, especially financial companies; and various think tanks, such as strategic consulting companies, etc.
Finance is more micro and specific, and is more focused on front-end, profit-oriented, and business-oriented work, with a greater emphasis on personal comprehensive abilities. Specifically, for example, if you go to a securities firm, those who studied Economics are more likely to do macro strategy research, while those who studied Finance are more likely to do industry research. Especially for those who have a background in science and engineering and have studied Finance, they would be the best candidates for various industry research, such as those in the electronics industry.
However, it should be emphasized that there is a lot of overlap in the specific job directions that are closely related to the majors. There is no strict threshold for employment differentiation, and those who have studied Economics can also work in the financial field. These positions usually do not restrict specific disciplines, but require a business background, and the educational requirements are very high, usually requiring a master's degree or above, and those with overseas educational backgrounds will be given additional consideration.
Financial Economics
Both Economics and Finance are important fields, and depending on personal interests and career goals. Pursuing a major in financial economics could be a good option for someone interested in both finance and economics. Financial economics is a field that combines the principles of finance and economics, focusing on the ways in which financial markets and institutions interact with economic activity. By studying financial economics, you can gain a strong foundation in both macroeconomic and microeconomic theory, as well as a deep understanding of financial markets, instruments, and institutions. This can prepare you for a wide range of career opportunities, including investment banking, asset management, financial analysis, and more.
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