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I took an AP (Advanced Placement) Macroeconomics course in high school, and the concepts were very interesting, but unfortunately I think it provided minimal help (or maybe it was because we barely scratched the surface of what stocks, bonds, etc. are)

But I am debating whether I should take Microeconomics at my University (this is completely optional regarding my graduation). I heard it's not really a hard class here, so that's why I was considering it. And some people say it gets you much further than what Macro does for you, but was wondering why this is so.

Any word of input is appreciated :)

[edit] In case it's relevant, the textbook we are using is Experiments with Economic Principles by Bergstrom

  • 4
    Take a finance class and a marketing class they will be much more relevant. – JohnFx Jan 8 '12 at 5:29
  • Do schools teach anything of practical value? – Andy Wiesendanger Jan 10 '12 at 20:10
  • @JohnFx Why will 'marketing' 'be much more relevant'? – Greek - Area 51 Proposal May 6 at 6:26
  • @Greek-Area51Proposal That comment is 7 years old, and I no longer have any idea what I was thinking back then. I will say that my Marketing classes in college were extremely interesting even if you don't go into that field. Really give you perspective on how the corporate world works. – JohnFx May 6 at 20:19
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Not much at all, especially an introductory level Microeconomics class. There are a few reasons for this:

  1. Finance and investing is not actually economics. Some of economics surrounds investing, but economics as a field is much wider than that. The class will likely cover the concepts behind how you theoretically make economic decisions, and not why putting your life savings into a 3x short leveraged ETF will ruin everything.
  2. It's an introductory class. While it may give you the foundations of understanding how the economy works, it's not going to prepare you for the more complex world that actually exists. Supply and demand curves and other theoretical frameworks are all well and good, but it's no more going to make you an astute investor than taking a introductory class in human physiology is going to make you a decent doctor.
  3. The economics is not finance thing again. The market isn't rational. You aren't rational. The toy models that you'll work with are only tangentially useful.

That's not to say that Economics isn't worth studying. I loved both my Micro and Macro class. But I probably got more useful investing knowledge from a class on linear regression.

  • 1
    upvoting linear regression comment – Daniel Jan 8 '12 at 2:44
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    Just curious, but why do they say that Micro tends to be a lot more useful than Macro? – Chuck Testa Jan 9 '12 at 1:19
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    @ChuckTesta Who is "they". Because I don't. But if I presume to talk for "they", its likely because Micro focuses on the decision making of small firms and households, which is far closer to home for the average person than the movements of entire economic sectors or nation-states. – Fomite Jan 9 '12 at 1:30
  • @EpiGrad I would add that micro tends to be regarded as more "scientific" simply because it lends itself to more testable hypothesis. This bias might be some of what you are hearing when you here Micro is more useful. – Pablitorun Jan 9 '12 at 23:35
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No, Micro and Macro are about economics, not finance. In Micro, you'll study concepts such as consumer and producer decision choices and how they can be rationalized in a rigorous, formal setting. It's very theoretical, but does provide some neat intuition on how markets operate and agents interact and influence on another.

But spending a day reading a good book that directly targets finance and investing will be much more helpful than taking a several weeks long course in microeconomics.

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I replied earlier, and although I agree my response may have been a bit curt, I doubt that to be the reason it was downvoted and assume it was because someone either mistook abrupt for facetious or is an economist.

The OP specifically asked if economics would help them with investing, and in my personal experience economics was detrimental to that ability. The errors in the conventional wisdom of economics would take me several books to fill.

The problem is that economists continually pontificate about topics such as currencies, interest rates, and debt, when these are all accounting and finance issues, and they have no training in these fields.

As the OP is in University and appears to have an interest in a financial career, I recommended to him that he focus on accounting and finance, both of which I found extremely beneficial. Accounting surprisingly even more so than finance.

In consideration that I have been a member of six different exchanges, head of trading at several of the worlds largest banks, and have an advanced background in derivatives, I feel very comfortable with the advice given.

-Regards

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