What is Economics?

What is Economics?

It is a field of study that is interested on how different units of a society interact to maximise welfare in some cases their own personal utility. Economics as a field has a duty to find the perfect spot on how to use the limited resources the Earth posses so as to maximise social welfare. The following subfields; microeconomics, macroeconomics, public economics and international trade are some  of the ways economics as a study tries to expand its knowledge on explaining economic phenomena such as the 2008 financial crisis. 

Microeconomics 

A subfield of economics that is interested in the interaction between the household, the firm and government. It slightly relies on behavioral economics to emphasise certain points such as how households would react to a taxi fare increase. Mainstream media uses this alot to advise on what the government should do to achieve economic growth. It's soul purpose is to zoom into the day to day interaction between economic units. 

Macroeconomic 

Is a field of economics that solely moves away from looking at individual units of an economy. It is more concerned about how the monetary policy adjustments affect investment. It looks at historic phenomena such as the printing of money in some countries affects the demand and supply of goods. It's current focus has been the role of institutions in a democratic country. It seems to answer how a countries institutions can make or break a county one of the institutions that are hot debate is the rule of law. This for me is what most mainstream economist should possess to comment on how to achieve growth. 

Public Economics 

A subfield of economics that is dedicated in how government shoukd run a country if it wants to deal with unemployment, poverty and inequality. It also seeks to explain how politicians, beaurocrats and civil society play a role in a country. It's a field that seeks to highlight the fact that those in public office should be held accountable for their actions once in office. It also involves on how a countries taxes can be increased decreased. Furthermore, it seeks to explain how taxes like wealth tax can be used to further address inequality. 

International Trade 

A sector of economics that looks at how trade between two or more countries can be beneficial to all. It seeks to explain how trade influences a countries welfare, terms of trade and how trade surpluses and deficits constrain imports and exports. For international trade it seeks to explain how developed countries rely on the abundant capital they possess whilst developing countries rely in the abundance of labor. These two factors labor and capital play a huge role when it comes to trade. It's worth noting that once international trade occurs currency becomes involves and this is were most imports and exports are highly involved. 

In conclusion 

As you have seen economics is broad, in most cases it collect all data on sections mentioned above and seeks to use that data to explain how things such as the market operate. How much you should save for retirement. All above fields fall within economics. It's key to find what you are interested in and dig deep.