Name of Discipline: Economics
Economics Subject Matter: The basic concept of economics is the idea of how people decide to use resources which they have obtained. A resource can be a number of things such as money, food, water and clothing. Economics studies how people allocate their resources, and the effect which occurs afterwards. Through these observations, decisions can be made to benefit the economy as a whole.
Definition of Economics: Basic Economic Principles: A Guide for Students defines economics as, “the study of how people choose to use their resources in order to satisfy their nearly unlimited economic wants. Scarcity exists whenever there are insufficient resources to satisfy these wants” (O’Conner and Faille 1).
Sub-Fields within Economics: Economics is broken down into two distinct areas, Microeconomics and Macroeconomics. Irvin Tucker, author of Microeconomics for Today, defines Microeconomics as “the branch of economics that studies decision-making by a single individual, household, firm, industry, or level of government” (5). Tucker also defines Macroeconomics as “the branch of economics that studies decision-making as a whole” (5). Microeconomics is basically the study of the smaller bits and pieces of economics, while Macroeconomics studies the whole big picture. Microeconomic is generally interested in the effect of smaller businesses or individual decision. Macroeconomics is more interested in large corporations and international affairs.
Research Methods: One approach which economist use to research and find answers is the traditional Scientific Method. The Scientific Method is broken into five distinct steps. The first step is to identify the problem. After you identify what you are trying to solve, the second step is to collect relevant data through surveys or data mining. Using the date collected, the third step is to propose a hypothesis. The forth step is to test the hypothesis, and the final step is to verify whether your hypothesis was valid or not. An example given in O’Conner and Faille book is one of price and quantity demand. (Step 1) Alfred Marshall, an English economist, wanted to figure out the relation between price and quantity demand. (Step 2)
Key Concepts:
- Ceteris paribus: It is a Latin phrase that means that while certain variable change, all other things remain unchanged. All theory in economics must abid by this assumption. If the assumption is violated, the theory or model can not be tested legitimately.
- Law of demand: This law is defined as “the principle that there is an inverse relationship between the price of a good and the quantity buyers are willing to purchase in a defined time period, ceteris paribus.” (Tucker, Microecon. 54). As prices goes up, the demand for an item goes down and vice versa. By this law, it is possible to find the economical price to sell an item for maximum profit.
Leading Theories:
- Keynesian Model: This “theory argues that demand creates its own supply” (Tucker, Macroecon. 186). Keynesian theory is based on aggregate demand and that the economy is inherently unstable, and may require government intervention to control aggregate expenditures. If there is a demand for an item, the supply of that item will come out of the demand.
- Labor theory of value: This is a theory which believes that the price of a commodity is directly related to the labor needed to produce it. If a product requires more labor and take a longer time to make, it should be valued more and cost more.
Key Books/Seminal Text:
- O’Conner, David E., and Christopher C. Faille. Basic Economic Principles: A Guide for Students.
This book is a basic outline of the principles in economis. It gives a general idea of the theories and key terms of the discipline. It is a good book to read if you want to get a general idea about what economics is all about. - Tucker, Irvin B., Macroeconomics for Today.
This book focuses on the sub-discipline, Macroeconomics. It focuses on the role of government, and larger companies, and how economics works as a whole. There is a focus on how economic fits together as a whole, and also a focus on international economics. - Tucker, Irvin B., Microeconomics for Today.
This book focuses on the sub-discipline, Microeconomics. It focuses on the logic of economics, specifically supply and demand. This book introduces the logic of economic analysis and develops the core of microeconomic analysis.
Key Thinkers/Practitioners:
- Adam Smith (1732-1790) was a Scottish economist. He explained the operation and benefits of a free market economy. Smith believed that individual and firms were guided by an “invisible hand” to do what is in their best interest. The laissez-faire capitalism came from his idea of the government not regulating business activities.
- John Maynard Keynes (1883-1946) published a book called General Theory of Employment, Interest and Money. Through the ideas of his book, he revolutionized how the world looked at the economy and the role of government in society. Through his idea, he developed the Keynesian model which is still looked at today.
- Paul A. Samuelson (1915-Present) has come up with many contribution to economics. He is currently reviving the new-classical economic theories. His many contributions include the multiplier-accelerator macrodynamic model, the factor price equalization theorem, the Non-Substitution theorems and envelope theorem to just name a few.
- Jean-Baptiste Say (1767-1832) came up with Say’s Law which claimed that the total demand of an economy can not exceed or fall below total supply in the economy. His idea was that supply cerates its own demand. His ideas were popular to those trained in the classical train of thought.
- Alfred Marshall (1842-1924) created the Cambridge School of Economics. There he was able to teach many of the great minds of economics, such as Arthur Pigou and John Maynard Keynes who would go on to come up with the Keynesian theory. He also wrote many books on economics which influenced many other economists during his time. He was able to make a huge influence through his teachings and books.
- Arthur Cecil Pigou (1877-1959) was the prize student and heir of Alfred Marshall. He was a neoclassical economist. He brought social welfare into the scope of economic analysis which had been previously ignored. He is also responsible for the distinctions between social marginal products and cost. He also gave the idea that government can, through mixing taxes and subsides, correct such market failures.
Professional Academic Journals:
- Consumption, Markets and Culture
This journal focuses on consumerism and the markets as the site of social behavior and discourse. It encourages discussion of the role of management and organizations in society, especially in terms of production, consumption, colonialism, globalization, business performance and labor conditions. Combining theories of culture, media, gender, anthropology, literary criticism and semiology with analyses of business and management, the journal is international in its scope and iconoclastic in its aims. This journal is aimed at those who are interested in culture effect on the economy. - Economics and Philosophy
This journal deals with the mixing of the two disciplines of Economics and Philosophy to deal with Economic problems. It uses both disciplines in a interdisciplinary way to attempt to deal with many problem in Economics. This journal is aimed at people who want to take a look at economics in a different way or interdisciplinarians.
Professional Academic Associations:
- Economics Departments, Institutes and
- Organization For Co-operations and Economic Development – http://www.oecd.org/statistics/
- Center for Economic and Policy Research – http://www.cepr.net/
Work Cited
Tucker, Irvin B., Macroeconomics for Today.
Tucker, Irvin B., Microeconomics for Today.
O’Conner, David E., and Christopher C. Faille. Basic Economic Principles: A Guide for Students.
Elliott, Richard, Bernard Cova. "Consumption, Markets and Culture." Informaworld 112008 15 Jul 2008
Bonanno, Giacomo, Christian List, Bertil Tungodden, Peter Vallentyne. "Economics and Philosophy."
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