What is economics? - EconoFacts

Economics is a field of social sciences focused on production, distribution and consumption of goods and services. It is a science that studies how individuals, businesses, governments and nations make choices about how to allocate resources. Most people think of economics as it is all about money. But economics is science of choices. The choices which leads to better outcomes. Some of those choice may include money, but most do not. The main goal is to achieve wellbeing for everyone, happy prosperous societies, green valuable environments, political stability, nutritious food for everyone, fare opportunities for everyone and so on.

The birth of economics may be traced to the year 1776, when the Scottish philosopher Adam Smith wrote a book about the wealth of nations. There was, of course, economics before Smith: the Greeks made significant contributions, the Islamic empires had its own economic systems, as did the medieval scholastics, and from the 15th to the 18th century an enormous amount of pamphlet literature discussed and developed the implications of economic nationalism (a body of thought now known as mercantilism). It was Smith, however, who wrote the first full-scale dissertation on economics.

In the 19th century economics was the hobby of gentlemen of leisure and the vocation of a few academics; economists wrote about economic policy but were rarely consulted by legislators before decisions were made. Today there is hardly a government, international agency, or large commercial bank that does not have its own staff of economists. Many of the world’s economists devote their time to teaching economics in colleges and universities around the world, but most work in various research or advisory capacities, either for themselves (in economics consulting firms), in industry, or in government. Still others are employed in accounting, commerce, marketing, and business administration; although they are trained as economists, their occupational expertise falls within other fields. Indeed, this can be considered “the age of economists,” and the demand for their services seems limitless.

Economics divided into two main brunches Microeconomics and Macroeconomics. Microeconomics deals with individual entities such as consumers, business firms, traders and farmers. Macroeconomics deals with aggregates such as income of a whole economy, employment, investments and others. There is also the important field of development economics, which examines the attitudes and institutions supporting the process of economic development in poor countries. Why the big difference? How can all grow sustainably?

Economics is further divided into the specialized fields of public finance, money and banking, international trade, labor economics, agricultural economics, environmental economics, industrial organization, and others.