Looking to learn more about economics?
You’re in the right place! In this introduction guide I’ll answer common questions like:
- What is economic?
- How has the field of economic evolved?
- What are the best places to learn more about economic?
- Is it possible to get a job or start a business in the field?
What is economics?
Economics is a massive field, teaching us about wealth creation, transactions, and how conditions of prosperity and paucity are created and continue to exist, among many other things.
Definition of economics:
“Economics is the study of the use of scarce resources that have alternative uses”
This study teaches us not only about the present, but also about the past – we learn how market trends led up to the current economic environment, and why certain historical events played out in the ways that they did.
Economics isn’t just important for professional economists or people investing in stocks to understand – everyone should have a decent understanding of basic economics.
In this intro guide, we’ll take a brief overview of economics and how you can learn more about it.
Why is Economics Important?
Economic theory has a huge impact on our everyday lives. For example, when the government decides how much money to print and distribute, they are using economic theory. When we make decisions about what to buy or what not to buy, we are also using economic theory.
In fact, economists have a very broad and deep understanding of how economies work and what impacts different policies have on them. They use this knowledge to help policymakers make the best decisions for their country or economy.
In addition, economics helps us understand why some countries are richer than others and why people in some countries live longer than people in other countries. Economics also explains why there are cycles of prosperity and depression, as well as the trends that lead to either outcome.
Modern Economic theory is mulit disciplinary and can now explain even more complex phenomena like Daniel Kahnemans, groundbreaking and nobel prize awarded, work in the area of decision-making under uncertainty.
Economics for Beginners – Learn the Basics and Common Terms
Economics is a pretty complex field, so talking about the “basics” is no easy task.
That being said:
Economics is divided into microeconomics and macroeconomics.
Microeconomics studies individual peoples’ economic behavior – what purchases or don’t make, and how these decisions affect supply and demand. This is an intuitive but fundamental concept: the more consumers want a product, the more of it will be produced.
Of course, this could lead to an oversupply of that product, which causes it to lose some of its value as it becomes less “scarce” or “precious.”
Macroeconomics looks at how this is all linked together to create what we refer to as “the economy,” whether this is a national economy or the glob economy.
At the end of the day, economics is all about determining how limited resources can and should be allocated. It is all about dealing with scarcity. “How do we create as much prosperity as possible?” economists may ask and, throughout history, different types of economies (free market and command, for example) have had different ways of answering this question.
In different ways, beginners in the field often first learn about how costs (including opportunity costs), benefits, supply and demand, production possibilities curves, and taxes all play a role in the economy.
Money: When people spend their own money (or earn it through work), they are using it to purchase goods or services from others in the market. In order to do this, they must first find someone who has something that they want (a good or service) more than they want what someone is offering in trade (in other words, there must be a market for that good or service). Once somebody is able to find a willing buyer and seller in the market, they can negotiate a price for the good or service – which is called its “market price.”
Exchange: When people exchange things with each other, they are exchanging one good or service for another. For example, when Alice sells her car to Bob for $15000 worth of groceries at the grocery store, she is exchanging something physical (her car) for something else physical (the groceries). This exchange takes place in an open market where buyers and sellers can come together without government involvement.
Income: Income refers to everything an individual earns during any given period of time – whether it comes from working for a company wages or from interest on their savings account! Income affects an individual’sabilityto purchase goods and services with that money. It also affects an individual’s overall happiness and well-being.
Supply & Demand: Supply & Demand is perhaps one of the most famous concepts in economics – it’s also one of the simplest! The theory states that when there is more than what people are willing to pay for a particular good or service (known as “supply”), prices will drop until there is enough demand to meet that increase in supply (a “market equilibrium” will be reached). Conversely, when there isn’t enough demand for a particular good or service (known as “supply”), prices will increase until there is enough demand to meet that decrease in supply (a “market equilibrium” will be reached).
Production Possibilities Curves: Production Possibilities Curves are graphs that show how much different types of products could be produced by various amounts of workers working at full capacity on various types of land under different conditions. The curves help policymakers determine which products should be produced given available resources and consumer preferences.
Government Policy & Economics: Economics plays an important role not only in our personal lives but also throughout society as a whole. Economic theories help policymakers make decisions about taxation, unemployment insurance, minimum wage, and trade. Economics also helps us understand how markets work and how to make wise investments.
Brief History of Economics
Economies have existed in one form or another as long as humans have been around since scarcity has always existed and resources have always had to be allocated.
Economics as the study of economies, though, goes back to at least ancient Greek times – Aristotle and Plato wrote about things like production and specialization of labor.
We can trace the line that led to modern economics, though, beginning in the 1500s and 1600s with “mercantilism.”
Mercantilism was the in vogue economic system of the 1600s and 1700s – this trend was all about ensuring the exports were much higher than imports so that a country’s net gain would be positive. It encouraged the acquiring of colonies abroad and frequent wars between neighboring European powers.
It also assumed that the amount of wealth in the world was unchangeable.
Mercantilism was supplanted by capitalism, which was really introduced by the Dutch but codified by the seminal 1776 text The Wealth of Nations by Adam Smith. This gargantuan treatise dispelled the idea that wealth was limited – it could be created
By the late 19th-century alternatives to capitalism like socialism and communism emerged, and the 20th century involved the geopolitical conflict between these ideologies.
Economists such as John Maynard Keynes and Ludwig von Mises were also influential in the early 20th century,
Today, capitalism remains the dominant global economic system.
To get started with your Economics project, be sure to check out our extensive list of resources. This includes communities, articles, videos, and tools that will help you get started quickly and smoothly.
Communities and Websites
Beginner Guides related to Economics
The first way to learn more about economics is the good old-fashioned way: through books.
Anyone really wanting to dive into the history of economics should give The Wealth of Nations a Try, as it’s the first book to describe our current economic system and the foundational text (Smith is to economics as Freud is to psychology)
As for modern economics books:
Well, which you opt for really depends on your political bent, though it can be good to broaden your horizons and read one from the “opposing” side.
“Basic Economics” by Thomas Sowell is a conservative-leaning look at scarcity and supply and demand and argues that things should be as “laissez-faire” as possible.
For a more left-leaning book, try “Capital in the 21st Century” by Thomas Piketty, which argues that wealth inequality is a necessary offshoot of the huge economies that exist today.
Economics as a Passion
The following tips will show you why many people have a strong passion for Economics and some ways a passion for Economics can be celebrated:
Top 5 Reasons Why We Love Economics
- We love economics because it can make our life better: Economics helps us understand how our money is being spent and why some people are wealthier than others. This can help us make more informed decisions about our own lives.
- It is a fascinating subject: Economics is one of the few fields of study that can allow you to understand how economies work on a large scale. This makes it an incredibly interesting topic to study.
- It is a way to help others: Economics can be used to help policymakers make the best decisions for their countries or economies. This can have a huge impact on the lives of many people.
- It is a way to learn about ourselves: By studying economics, we can learn about our own motivations and abilities. This can help us develop better skills in other areas of life.
- We love economics because it is a way to improve our understanding of the world: Economics allows us to understand how the world works on a very fundamental level. This knowledge can be used to improve our lives in countless ways.
How to Show and Celebrate Your Passion for Economics?
The best way to show your passion for economics may vary depending on your individual circumstances. However, some tips on how to celebrate your love for economics include:
Sharing your favorite economics quotes or articles with friends and family members. Studying and discussing economic concepts with others. Joining or participating in online discussions related to economics. Participating in or sponsoring a fundraiser or event that supports economic education. Writing or speaking about economics in public forums.
Careers in Economics
Since our world runs on economics, economists are in high demand.
Companies and governments enlist the aid of professional economists to determine what their next step is in terms of production and regulating the economy as a whole, respectively.
Those with economics degrees can also become accountants (though additional study in business administration may be required) or helping individuals plan out their personal “economy.”
Another option is to become an economic journalist – companies and individuals are always looking for expert assessments of the economy, and economic journalists provide this in a public forum.
Overall, someone or other is always in need of the services of an economist.
Economics has been referred to as the “dismal science,” but it’s also the “necessary science” (and, in our opinion, a fairly interesting science!). Having a basic knowledge of this field, or dedicating your life to it, are both good choices that will be sure to pay off.