The Branches of Economics! Importance of Economics in the Life of the Modern Society!

Economics is the study of the distribution of resources in the society.
It speaks about how much people and countries use their resources. It is considered a science of managing wealth and money.

Importance of Economics

It understands how economies work. It tells the way in which economic factors work together.

Moreover, it is an important part of Social Science. In our daily life, a lot of economic concepts are used.

Economics helps us understand the importance of businesses and economies. It gives information regarding market trends.

Branches of economics

Economics is divided into two branches which are micro-economics and macro-economics. There are also other divisions in this field.

1. Microeconomics — Microeconomics deals with demand, supply, price and output of people. The word ‘Micro’ means small. This branch studies small parts of the economy. It also studies how independent and small businesses make decisions. Concepts like consumer theory and Theory of the firm are also a part of this field. It also discusses ideas like people preferences and dislikes.
2. Macroeconomics — Macroeconomics studies the whole economy of a country. It deals with national income, employment, rising prices and low economic activity. Due to globalization, it has become important for countries to understand economic factors properly.
3. Austrian Economics — The Austrian School of Economics stands for liberalism and Laissez-Faire means free economy. Interestingly, it considers people’s needs and actions important. It also believes that the classical definitions of economy were wrong.
4. Behaviourist Economics — Behaviourist economics deals in individual satisfaction. It is concerned about the human feelings when making economic decisions. Moreover, it says that humans make choices by what is popular during their time and how they make those choices.
5. Business Economics — Business Economics studies in the money part of the businesses and companies. As a matter of fact, it also deals with issues related to environment and organization.
6. Classical Economics — It is the foundation of modern economics. Its leaders were Adam Smith, David Ricardo and Jean Baptiste Say.
   It studies about the functioning of free markets. It also deals in the price and market influence distribution of resources. Moreover, it suggests that economies work best when they are free and left alone. There should be no government rules and interference.
7. Constitutional Economics — It lays stress on the economic aspect of the constitutional law of any country.
8. Development Economics — The main idea is to focus on improving the economic and social conditions in developing countries. It is concerned with both small and large aspects of the economy. It deals with the development of poorer countries. It highlights issues like poverty and unemployment in these countries. Econometrics-means the use of maths along with economics Jan Tinbergen is the main thinker of the school.
   It uses data and information to find simple relations between economic concepts. Statistics and other models also help find similarities in the factors. For example, Okun’s Law deals with the relation between economic growth and unemployment.
9. Energy Economics — It talks about the use of economic ideas that deal with energy issues.
10. Entrepreneurial Economics — It deals with the relationship between the businessman and the economic areas of a country.
11. Environmental/Welfare Economics — Garrett Hardin and Arthur Pigou were influential in this field. This school lays stress on the environment. It says whether economic growth is really important.
12. Financial Economics — It talks about the use and distribution of resources. It talks about how factors like opportunity cost and risk can influence a particular decision.
13. Health Economics — It talks about the economy of the areas related to health. It uses the concepts of microeconomics.
14. Information Economics — It talks about the way in which computer systems affect economic decisions of a country.
15. Institutional Economics — It is concerned about the way in which the society trends, events and institutions influence economies.
16. International Economics — This field studies the economic relations among different countries.
17. Keynesian Economics — John Maynard Keynes was the key thinker of this concept. Keynesian Economics was quite popular. It gave macroeconomics a great status. Keynes said that different rules were needed for large economies to function.
18. Labour Economics — Knut Wicksell is the major scholar in this field.
    It talks about money given to workers, employment levels and the availability of workers. Other factors which influence workers like motivation, enjoyment are also looked into.
19. Marxist Economics — Karl Marx was the main person involved in this field. He says that capitalism has an unequal nature and is unstable. The model focuses on the government interference on the distribution of resources.
20. Mathematical Economics — It uses the concepts of Mathematics to determine theories of economics. It also solves economic issues using maths.
21. Monetarist Economics — Milton Friedman and Anna Schwartz were the main leaders of this school. Monetarists believed in the efficiency of markets. They wanted to control the problem of rising prices in the country. The field became popular in the 1970s and 1980s. It looked into the problems faced by a country.
22. Managerial Economics — It deals with the role of economic tools, rules and ideas in the decision making process by businesses.
23. Neoclassical Economics — The main thinkers were Leon Walras, John Hicks and William Jevons. The main concepts of this theory are using all of the resources and making right choices.
24. Population Economics — It studies the relationship between the people living in an area and economics.
25. Public Finance — It studies the way in which government influences economies. Concepts like government and public spending and taxes are studied.
26. Socioeconomics — It speaks about the way economic activity is influenced by social activities.
27. Urban Economics — It deals with the tools of economics to study about the cities of a country. To sum it up, economics is an important part of the lives of people. The various branches are necessary to function on properly. These help in understanding peoples’ needs and the economy. These fields also make the understanding of economics easy and interesting.

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