Weekly Insight 1: What is Economics?

Welcome to The Triumphant Economists!

In this post we will be exploring what economics is in the context of it being a social science that involves the production, distribution, and consumption of goods and services. The study of economics encompasses the choices made by individuals, businesses, governments and nations about allocating resources. The actions of human beings require economists to consider the assumptions of rational behaviour in order to achieve the optimal level of benefit or utility. In order to understand economics, it is essential to be familiar with labour and trade because economics exists as a means to determine the methods that will generate the greatest yields.

Let’s begin with distinguishing the two major types of economics – macroeconomics and microeconomics. Macroeconomics focuses on the behaviour of the economy as a whole whereas microeconomics concentrates on individual people and businesses. Macroeconomics analyses the performance of an economy on a regional, national or international level which can be quantified by measures such as Gross Domestic Product (GDP), Gross Domestic Product per capita, Inflation, Unemployment, Population Growth, Environmental indicators, Central bank rates such as interest rates, Health indicators, and Education indicators. Microeconomics considers company-specific factors such as particular industries or niches, changes in tax policy, changes in prices of competitors, and supply and demand in general.

Due to the complex nature of economics, several subfields have been identified by The Journal of Economic Literature. These include Applied Economics; Mathematical and Quantitative Methods; Econometrics; Game Theory and Bargaining Theory; Experimental Economics; Microeconomics; Macroeconomics and Monetary Economics; The Business Cycle; Money and Interest Rates; International Economics and International Trade; Finance and Financial Economics; Public Economics, Taxation, and Government Spending; Health, Education, and Wealth; Labour and Demographic Economics; Law and Economics; Industrial Organisation; Business Administration and Business Economics; Marketing; Accounting; Economic History; Economics Development, Technological Change, and Growth; Economic Systems; Agricultural and Natural Resource Economics; Urban, Rural and Regional Economics; Sports Economics.

To become an economist, you will need to complete tertiary qualifications such as a Bachelor of Commerce or a Bachelor of Economics with the option to complete an Honours year. Many economists also obtain a Master of Economics or even a PhD in a specialised area of research within the Economics discipline.

A career in economics is rewarding for those who enjoy discovering the wonders of how the world operates and the ways that people interact in order to achieve the greatest benefit or utility. It requires reading academic research from the various fields of economics in order to be aware of the latest developments in economic thought and methods of analysis.

Be sure to read the next post where we will be exploring the origins of economic revolutions.

Remember, the more you learn about the past, the more that you will be prepared for the future!

The Triumphant Economists