Economist vs. Financial Analyst: What Are the Differences?

Economics and finance are two industries that are essential to our understanding of the world around us. Both economists and financial analysts play important roles in these industries, but there are also several key differences between these two professions. In this article, we compare and contrast economists and financial analysts, and we provide information on what you can expect from each profession.

What is an Economist?

Economists conduct research, prepare reports, and analyze economic issues for governments, businesses, and individuals. They collect and interpret data, using statistical techniques and software, to identify trends and relationships. Economists develop theories to explain economic phenomena and forecast market trends. They also design and test economic models. Economists typically specialize in a particular area, such as microeconomics, macroeconomics, econometrics, or international economics.

What is a Financial Analyst?

Financial Analysts work in a variety of industries to provide insights into investments and other financial decisions. They use their skills in mathematics, accounting and financial analysis to assess opportunities and risks associated with different investments. Financial Analysts typically have a bachelor’s degree in finance or a related field. They use their knowledge of financial analysis and modeling to make recommendations to their clients or employers about the best course of action to take. Financial Analysts typically work in banks, insurance companies, accounting firms or investment firms.

Economist vs. Financial Analyst

Here are the main differences between an economist and a financial analyst.

Job Duties

Economists and financial analysts share some job duties, such as researching data to develop economic or financial models. However, economists focus more on research than analysis. They use the data they collect to make broad predictions about economic trends. Financial analysts use the data they collect to assess a company’s performance and help decision makers determine how to improve it.

Another key difference between these two professions is that economists rarely act on the data they collect. Instead, they publish their findings in reports that reach government officials, business leaders and other stakeholders in the economy. Financial analysts, however, are often responsible for implementing the recommendations made by economists. This may involve communicating with departments throughout a company to explain changes in policy and helping decision makers decide how to spend their resources.

Job Requirements

Economists typically need a bachelor’s degree in economics, although some entry-level positions may only require an associate degree. Many economists also pursue a master’s degree or doctorate in economics to qualify for more advanced positions. These programs usually take two to four years to complete and include coursework on topics like microeconomics, macroeconomics and econometrics. Some programs also allow students to specialize in a particular area of economics, such as labor economics or international trade.

Financial analysts usually need at least a bachelor’s degree in finance, accounting, business administration or a related field. However, many employers prefer candidates who have a master’s degree in business administration (MBA) or a master’s degree in finance. These programs usually take two to three years to complete and include coursework on topics like financial accounting, investment analysis and corporate finance. Financial analysts can also pursue certifications through professional organizations, such as the Chartered Financial Analyst (CFA) program offered by the CFA Institute.

Work Environment

Economists and financial analysts work in different environments. Economists typically work for the government or a private company, depending on their specialty. For example, an economist who specializes in agriculture might work for a farming company to help them make decisions about how to increase productivity. An economist who specializes in transportation might work for a shipping company to help them determine which routes are most efficient.

Financial analysts usually work for banks, insurance companies or other financial institutions. They may also work for corporations that need assistance with budgeting or forecasting. Financial analysts often work regular business hours, but they may have more irregular schedules than economists because of the nature of their jobs.

Skills

Both economists and financial analysts use skills like critical thinking, math and analysis to perform their jobs. Economists typically conduct research on economic trends and develop theories about how the economy works, while financial analysts usually focus on analyzing data to make recommendations about investments.

Economists need to have strong research skills to collect data and information about economic trends. They also need to be able to effectively communicate their findings in writing and verbally. Financial analysts need to be able to understand and interpret data, as well as identify patterns and relationships. They also need to be able to clearly communicate their recommendations to clients or investors.

Salary

The average salary for an economist is $94,244 per year, while the average salary for a financial analyst is $71,352 per year. Both of these salaries can vary depending on the type of company you work for, your level of experience and your location.