We explain what economics is and what its object of study is. Also, its importance and the different branches or types of economy.
What is economics?
The Economy (or Economic Sciences) is a social science whose scope of interest is the ways in which a society organizes itself to satisfy its material and immaterial consumption needs, through a cycle of production, distribution and exchange of goods that ideally it is perpetuated over time.
Economics, in other words, is the study of the ways of organization and distribution of the scarce goods that each society requires and therefore produces or acquires through different strategies, in order to satisfy the greatest amount of demand from a finite number of tangible or intangible goods.
Said like this, we could deduce that the Economy tries to understand the production and consumption processes of any human group, to aspire to an ideal distribution and management of resources. This has allowed him to apply himself to various areas of study and work with other specific disciplines, such as Law, Administration, business, politics, war, science and a long etcetera.
At the same time, Economics uses tools and processes from various areas of knowledge, such as psychology, philosophy, history, etc. to help you understand the economic dynamics of societies. It is a multidisciplinary knowledge that dates back to the times of Classical Antiquity (especially Aristotle).
Economic systems:
Object of study of economics
The specific object of study of Economics can be defined around three main axes:
- The processes of extraction, production, distribution, exchange and consumption of the goods and services that a society requires.
- The possible models of satisfaction of infinite human needs from the finite set of available resources.
- The way people and societies survive, trade, prosper and operate financially.
In this way, Economics is interested in a very wide range of objects of study, ranging from the pricing mechanisms of the goods and services available in a community, the behavior of financial markets and their impact on society, international trade, State intervention in internal markets, income distribution and methods of combating poverty, to theories of growth and economic cycles and their impact on the societies that participate in them.
Types of economy
Economics is a broad and complex discipline, in which numerous types or classifications can be distinguished, such as:
- Microeconomics and Macroeconomics. The first refers to the choices of economic agents (individuals, companies and governments) in order to satisfy their needs and scarcity. The second, on the other hand, views the economy as a national, if not global and international, system that analyzes trade balance totals, general trends and data at a panoramic level.
- Theoretical economics and empirical economics. The first pursues rational models of functioning and economic balance for different societies, while the second confirms or refutes these models through their application or the economic history of nations.
- Normative economics and positive economics. This distinction is based on the fact that the first contemplates the should be of the economy, while the second studies economic behavior as something alive and present, changing.
- Orthodox and heterodox economics. A differentiation of an academic type, in which the first is based on the triad rationality-individualism-balance and is the most commonly taught in universities, the traditional one; while the second encompasses a different and heterogeneous set of currents of economic analysis and prefers the approach based on institutions-history-social structure.
