The Department of Economics was founded in 1964, the same year that UC San Diego admitted its first undergraduates. The Department admitted its first Ph.D. students in 1965 and graduated its first bachelor degree students in 1968.

Since its inception, the faculty and programs of the Department of Economics have grown in number and stature. As of 2010, the Department of Economics has 41 faculty and two research professors (one Nobel Laureate). Seven faculty members are Fellows of the American Academy of Arts and Sciences, eight are Fellows of the Econometric Society, and 11 are researchers with the National Bureau of Economic Research. The Department is well-known as a powerhouse in econometric theory and microeconomic theory, and now also boasts top groups in macroeconomics, international economics, and several applied-microeconomic fields.