What is Economics,Branches of Economics and History of Economic thought.
What is Economics?
Economics is the study of how individuals,societies and nations make their choices(related to their economic activities),to make best use of scarce resources that nature and their previous grnerations have provided to them.
Economics can also be defined in a few distinct ways. It’s the study of scarcity,the study of how people use resources and respond to incentives,or the study of decision-making. It often involves topics like wealth and finance, but economics is not all about money. Economics is a broad subject that helps us to understand historical trends, interpret today’s headlines, and make predictions about the coming future.
What is the meaning of Economics and who coined it ?
The term Economics is derived from Greek word,"OIKONOMIA" means' household management'. Oiko means "household" and Nomia means "management"
Classical Economist like Adam Smith(Father of Economics, book: wealth of Nation)and other used "political economy" term for economics( Political Economy term was in usage during 18th and 19th century). The Term economics was coined around 1870 ( we do not know who exactly coined it) and popularized by Neo-Classical economists, one of them was Alfred Marshal ( In his famous Welfare definition), in place of "Political Economy".
Branches of Economics
Economics is divided into two major divisions.
(1) Micro-economics
(2) macro- economics
Then there are other subfields which came under these two broad domains of Economics.
1) Micro-Economics is further divided into many divisions Some of them are:
a) Neo-Classical (free market)
b) Development Economics.
c) Environmental
d) Behavioural(Psychological)
e) Econometrics ( maths)
f) Labour Economics
2) Macro-Economics has also many divisions some of them are:
a) Keynesian( Govt. Intervention).
b) Marxist(State Control).
c) Austrian.
d) Mercantilism.
e) monetarist.
Note: If you are intrested to know further, you can search these topics on google.I will also cover it my one of next blog, so you can find there also. You can also go through this link: https://www.insightsonindia.com/indian-economy-3/introduction-to-economics/branches-of-economics/
Micro-Economics
There are two decision making units in an economy; Household and business firms.
Micro-Economics deals with the behaviour of these units. How do household choose what to buy and how much to buy? How do firms choose what to produce and how much to produce? What determines that who will get the output so produced? All this is the subject matter of micro-economics.
Or other way (to understand better) Microeconomics is the study of how individuals and businesses make economic decisions. It looks at how supply and demand interact to determine prices, how firms decide what to produce and how much to charge for it, and how households decide how much to buy and at what price. Microeconomics also examines how market failures can lead to inefficiencies and how government intervention can help correct these problems. Overall, microeconomics helps us understand the functioning of markets and how they can be made to work more efficiently.
Macro-Economics
Macro-Economics deals with economy as a whole. It examines the factors that determine national consumption, national output, general price level, aggregate employment, unemployment and every thing which we took aggregately.
Or in other words,(to understand better) Macroeconomics is the branch of economics that deals with the performance, structure, and behavior of an economy as a whole, rather than individual markets. It examines aggregate measures such as GDP, unemployment rates, and price indices to understand how the economy works and how economic policies can be used to promote growth and stability. Macroeconomic theories, such as Keynesian economics and monetarism, offer different perspectives on how the economy functions and how policy makers can influence economic outcomes. In today's economy, Macroeconomic policies play a vital role in shaping the economic environment, including monetary policy and fiscal policy, which can have a direct impact on the overall economic stability and growth.
In Conclusion: Micro-Economics looks at the individual level of the economic system and Macro-Economics looks at the system as a whole. (There is common saying) Micro-Economics sees and examines"trees", and Macro-Economics sees and analyse the forest.
History of Economic Thought
History of economic thought is a big concept and comprises many school of thoughts. Its difficult to cover all one by one here. Here I had given only timeline and name of school of thoughts.If you are intrested you can search them on google.You can also go through these books:1) History of Economic Thought: Ancient Times to Modern Times, written by V.V. Reddy.
This is the amazon link:History of Economic Thought: Ancient Times to Modern Times https://amzn.eu/d/ekXIgUI
2) PDF Drivehttps://www.pdfdrive.com › a-histor...A History of Economic Thought by William J. Barber.(search this link text) this iss also a great book.
Schools of Political Economy
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