Economics

What is 'Economics'

Economics is a social science concerned with the production, distribution and consumption of goods and services. It studies how individuals, businesses, governments and nations make choices on allocating resources to satisfy their wants and needs, and tries to determine how these groups should organize and coordinate efforts to achieve maximum output.

Economic analysis often progresses through deductive processes, much like mathematical logic, where the implications of specific human activities are considered in a "means-ends" framework.

Economics can generally be broken down into macroeconomics, which concentrates on the behavior of the aggregate economy, and microeconomics, which focuses on individual consumers.

BREAKING DOWN 'Economics'


    One of the earliest recorded economic thinkers was the 8th century Greek farmer/poet Hesiod, who wrote that labor, materials and time needed to be allocated efficiently to overcome scarcity. But the founding of modern western economics occurred much later, generally credited to the publication of Scottish philosopher Adam Smith's 1776 book, "An Inquiry Into the Nature and Causes of the Wealth of Nations."

    The principle (and problem) of economics is that human beings occupy a world of unlimited wants and limited means. For this reason, the concepts of efficiency and productivity are held paramount by economists. Increased productivity and a more efficient use of resources, they argue, could lead to a higher standard of living.

    Despite this view, economics has been pejoratively known as the "dismal science," a term coined by by Scottish historian Thomas Carlyle in 1849. He may have written it to describe the gloomy predictions by Thomas Robert Malthus that population growth would always outstrip the food supply, though some sources suggest Carlyle was actually targeting economist John Stuart Mill and his liberal views on race and social equality.

  • Gross Domestic Product (GDP)
  • Retail Sales
  • Industrial Production
  • Employment Data
  • Consumer Price Index (CPI)
  • The Economics of Labor and Trade