Photo: Cadets in the Economics Program meet with the President of the Federal Reserve Bank of New York
Economics is the study of how to make optimal decisions in a scarce environment. Leadership and economics go hand-in-hand. In our economics program, we focus on principles that we call "The Economic Leader," where students take what they learn in the classroom and apply economic principles to effective organizational management and leadership.
The Economic Leader Principles:
- There is a trade-off in every decision a leader makes. What we give up constitutes the opportunity cost of a decision.
- Rational leaders think and decide on the margin. To optimize, decision-makers ensure the marginal cost of a choice never exceeds its marginal benefit.
- Life is a coordination problem. People respond to incentives. Leaders use incentives to shape individual action and create mutually beneficial outcomes for principles and agents. Leaders anticipate the unintended consequences of their decisions. Optimal decision-making requires an understanding of others' motivations and their likely response to an action.
- Trade can make all parties better off - a "win-win." Leaders realize the benefits from trade by facilitating specialization and comparative advantage among the people they lead.
- Perfect information can clear markets, but we often make decisions with imperfect information. Leaders must find the balance between gathering information and being decisive. Leaders understand risk and the tradeoff between risk and reward. They strive to take appropriate risks, mitigate against others and measure risk with nuance and care.
- The efficient solution may not be equitable, and the equitable solution may not be efficient. Leaders have a normative responsibility to balance efficiency and equity based on the organization's goals.
The Economics Program enables cadets to apply appropriate economic and political science theories and principles to complex economic and political issues. The capstone course (Economics of National Security) enables senior cadets to apply both the core curriculum concepts and economic principles they have learned in an analysis of current critical national security issues. This course provides an in-depth study of national security to include applying microeconomic analysis to defense personnel policies and weapon-system acquisition procedures, analyzing the defense budgeting process, examining how the Department of Defense manages its contracting relationships, and studying the macroeconomic impact of national security decisions.
Photo: Cadets in Money & Banking meet with David Rubenstein, founder of the Carlyle Group
Our program also offers cadets the option to take courses in finance, which apply the principles of economics to real-world markets and scenarios. Cadets can begin a four course sequence that includes: Financial Statements Analysis, Corporate Finance, Investment Theory, and Money & Banking. The Economics program supports graduate study in the social sciences in general, with particular relevance to economics, operations research, engineering management, business administration, international affairs, and public policy. Cadets have the option to pursue a Senior Thesis with Honors.
Click here to view the Economics major brochure.
Photo: Economics faculty meet with Nobel Laureate George Akerlof
For more information, please contact the Department Academic Counselor, Captain Thomas Bazemore.