Definition of Economics

Topics: Economics, Microeconomics, Macroeconomics Pages: 4 (1115 words) Published: August 30, 2013
The Definition And Application Of Economics
The definition of a subject indicates not only what to study, but also why to study. So it is crucial to achieve a fulfilling understanding of the subject matter, especially for a beginning learner. This paper analyses the definition based on the past relevant views, and then links it to nonacademic use. Definition of economics

To have an outline of what economics is, it is necessary to review the opinions of representative scholars of the main modern western economics schools. The main schools include Classical School, Keynesianism, Monetarism, New Keynesianism, New Classical Macroeconomics, Austrian School, Supply-side and New Institutionalism(Fang,2004). Despite of subtle differences, the views as to the economic definition can be classify into two genres:first, the definition, adopted by Keynesianism and New Keynesianism, that focuses on society mechanism of allocating scarce resources(Samuelson,1992; Mankiw,2011); and, second, the definition, accepted by other schools, that emphasizes purposive human action(Marshall,1960; Friedman,1976; Hayek,1945; Coase,1978). However, two positions reach a consensus to some extent. At first glance, the premise of each view is different, scarcity and purposefulness respectively. Admittedly, the purposes of man’s behavior can be quite complex. In most cases, the purpose is maximizing his/her interest. Since “The wellspring of human action is dissatisfaction” (Callahan,2004, p.22), the resources that individual wish to own are always limited, in other word, scarce. In terms of study object, two opinions do not contradict with each other essentially, neither. Take the textbook “economics” written by Mankiw. Economists studies how society utilizes resources by three steps: discussing individual decision making, understanding interaction and integrating these decisions and interactions(Mankiw,2011). That is to say, studying society allocation mechanism is studying...

References: Callahan,G.(2004).Economics for Real People:An Introduction to the Austrian school. Auburn,AL:Ludwig von Mises Institute
Coase,R.H.(1978).Economics and contiguous disciplines. The Journal of Legal Studies, 7(2), 201-211.
Fang,F.(2004).The main schools of modern western economics.Beijing,China:China Renmin University Press.
Friedman, M. (1976). Price theory. New York,NY: Aldine de Gruyter.
Hayek, F. A. (1945). The use of knowledge in society. American Economic Review, 35(4), 519.
Mankiw, N. G. (2011). Principles of Economics(6th ed.). Mason,OH:Cengage Learning.
Marshall,A.(1960).Principles of Economics(8th ed.).London,UK:MacMillan.
Samuelson,P. A.&Nordhaus,W.D.(1992).Economics.New York,NY:McGraw-Hill.
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