Economics isn't just the study of the economics of countries, governments, and societies; it also looks at smaller-scale systems, including those unrelated to money or products. Read on to learn...
Although it has many mathematical aspects, economics is ultimately a social science. It uses math and science to study parts of society, namely the economy and what drives it. This consists of the production and then exchange and distribution of goods and services for money between the various players in the economy. The players are all people at their core, but people can form larger groups that act as singular players. For example, households, companies, organizations, and political subdivisions can all be individual players. Economics tries to understand how and why these players make the decisions they do primarily by studying data and creating models. These models are almost never perfect, but they do provide useful insights that help us optimize the economy. You’ll learn more about these insights and the people who make them in this category of economics articles on Direct Knowledge.
In addition to in-depth topics, the economics articles here will provide introductory material for those new to the field. For example, you can read a summary of economics here, or get a thorough exploration of the history of the field by checking out this article with more details. For a quick rundown of the big picture, continue reading below:
Macro- vs Microeconomics
Similar to the study of physics which is split into quantum mechanics and special relativity, economics is also split into the study of the small and large. This separation didn’t always exist; it came to be after the Great Depression in the 1930s. At that time, John Maynard Keynes introduced the idea of macroeconomics, which takes into consideration the broader picture of the economy.
In macroeconomics, aggregate indicators show the relationships between various larger parts of the economy. Some of the indicators include GDP, unemployment rates, and inflation. They can tell economists how the overall economy works, or how it is diverging from what they would expect to happen based on models and calculations.
Microeconomics, on the other hand, concerns itself with the smaller picture. Relative prices of individual goods and the interactions of individual players in the market are the main focus. This might mean analyzing a single market for one good or resource, or evaluating how monetary policies affect behavior on the micro level.
You’ll find in the economics articles here that there are a number of sub-fields and topics within the area. But, the following are particularly relevant in today’s world. While they aren’t entirely new, they are definitely becoming more prominent in the modern world. This is due to the maturing of civilization on Earth, globalization, and the looming threat of climate change.
A few hundred years ago, every country on Earth was still developing, if it even existed yet. Meaning, they were in the process of going through changes that increased their quality of life, political stability, and economic strength. This usually consists of determining optimal standards of government, establishing production and trade of goods, and growing in terms of economic wealth and power. You can read economics articles here about professionals such as Dean Karlan who dedicate their careers to this field to solve global poverty.
Eventually, these changes reach a plateau where the country is generally stable and has a high quality of living and good relations with other countries. Changes and improvements still happen, but not on the scale of a developing country. But, not every country has fully completed it’s development stage. And, having both developed and developing countries coexisting can cause some tensions. This sector of economics looks at these developing countries to better understand the development process in the hopes of helping countries reach their development goals.
As the world as a whole has gained an increasingly developed status, it has also started to increasingly experience globalization. Globalization is the process of integration and interaction among people across the planet, which wasn’t possible until fairly recently; At least not to the extent that it happens today after the rise of the internet and easier methods of travel.Through globalization, the amount of trade and other monetary interactions between countries has increased dramatically.
This can be a good thing, but it can also be very complicated due to differences between individual countries. One country might have very limited goods while another has a wide variety. One country might be experiencing drastic inflation or other instability, affecting exchange rates and supply and demand. International economics studies the effects of these differences, with focuses on trade, finance, monetary policies, and political economics. Dave Donaldson provides a great example of a prominent figure in this field. You can read more about him and this interesting area in the economics articles in this category.
One of the consequences of widespread economic development has been its significant negative effect on the environment. Development for most countries consists of increased production of material goods that use resources. This production is also often powered by machines that produce carbone dioxide or other pollutants. On a small scale, the environment can produce enough resources and reabsorb pollutants. But on a larger global scale, they lead to problems such as global warming, severe weather, and resource shortages.
Environmental economics evaluated the environment and our interactions with it as if it were its own market. Resources are treated as goods and services and the ways that we use them have costs and benefits. Treating the environment as a market in this manner prevents certain players from taking advantage of it, and decreases misuse overall.
Other important topics of today include Brexit, European debt situations, the NFIB, and the White House. Read about these as well as other new developments in the economics articles on in this category of Direct Knowledge.
To become an economist, you’ll typically need a master’s degree or even a PhD. But, according to the Bureau of Labor Statistics, this can open the door to very high salaries as the median salary is over 100,000 dollars per year as of 2018. The most common areas of work as an economist are in the government and scientific research, development, and consulting. This typically means sticking to offices on a regular nine-to-five schedule.
For a more in-depth coverage of these areas and more, check out the economics articles in this category. The field changes regularly, especially given the rate of change happening in society today. Here, you’ll be able to keep up on the developments.
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