Economics is one of the paramount and most sought-after subjects of Social Science. The main objective of studying Economics is to have an overall account of the production, distribution and consumption of goods and services. In modern societies, the economy plays a constructive role along with humungous scope & relevance. Moreover, we can say that the nature and scope of Economics generally lie on the basis of interaction between Economic agents towards Economic prosperity and work. In this blog, we will be exploring more about the nature and scope of Economics.
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What is Economics?
To put it simply, Economics is a branch of social science which deals with the study of choice and optimum utilisation of resources as well as the production, distribution and consumption of goods and services in an economy. Microeconomics studies individual choices and consumer behaviour on a micro level. At the same time, Macroeconomics explores how the economy deals with factors like inflation, GDP, and equal distribution of resources as well as international economies.
What is the Nature of Economics?
Economics as a subject has a dual association with the fields of Science and Arts. Many think tanks around the globe are still trying to establish the nature and scope of Economics. In the most simple terms, the nature and scope of Economics is prevalent as an art and science. Let’s explore how:
Economics as an Art
Economics as an art is the implementation of theories, concepts and findings to achieve goals. Thus, the practical application of the scientific economic findings comes under Economics as an Art. It includes graphs, figures, tables as well and equations. All the theories in it are well explained with the help of graphical representations. Moreover, all those theories are perfectly explained defining the relationship between economic variables and, the application of theories etc. Many economists evolved over the years and presented their divergent views about economics. Some believe that economics can be seen through the prism of Science and some believe it falls in the category of Arts.
Economics as a Science
Let’s now understand the nature of Economics as a Science. You all know that Science is based on the systematic study of knowledge or facts. For example, in order to conduct microeconomics and macroeconomics research, we collate data systematically classify it and analyze it. Science deals with the relationship between cause and effect. It can further be classified as positive science or normative science. Positive science deals with the relationship between cause and effect by scientifically analysing the problem in order to come up with a solution. It deals with the ‘What has ‘actually happened’ concept. On the other hand, the normative science of economics deals with the prediction of the future. ‘What ought to happen’ falls within normative science.
How to Explain the Scope of Economics?
The word scope can be understood as ‘the extent of the area that something deals with’. Major things that come under the preview of Economics are considered as its nature and scope. When it comes to the scope of Economics, Microeconomics deals with the applications of Economics on an individual level, be it consumer-oriented or household-related. On the other hand, Macroeconomics expands the scope of economics to the extent of a whole economy as well as international economies. Let’s explore these two in further detail:
The main aim and objective of Microeconomics are to study the individual units. A consumer, a household, a firm, or an industry, is what constitutes an individual unit. So we can say it is one of the foremost scopes of Economics. Concepts like product pricing, firm behaviour as well as factor pricing and consumer behaviour are thoroughly studied in microeconomics. Elasticity, the theory of production, Monopoly, and Oligopoly are some of the main characteristics of this division of Economics.
Macroeconomics is another major division of Economics. It solely focuses on overall production. It enables a student to study the entire economic activities rather than individual units. Here you can study the level of output, total savings, overall consumptions, total investments etc. Growth, business cycle, unemployment, inflation and deflation are the main characteristics of macroeconomics.
Career Scope of Economics
Regarding the career scope of economics, there are different specialisations and branches of economics that offer immense scope for graduates with a degree in this field. From Managerial Economics to Business Economics, you can explore a plethora of careers in Economics in India. Here are the most popular jobs and careers for the scope of Economics in India:
- Business Economist
- Data Analyst
- Financial Risk Analyst
- Cost Accountant
- Economic Researcher
- Financial Planner
- Financial Controller
- Financial Economist
- Senior Market Analyst
- Quantitative Analyst
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Different Viewpoints on Economics
Let’s get to know what are the various viewpoints that further justify the nature and scope of economics:
The classical Economists focused on the concept of wealth. Adam Smith- founder of economics himself said that the study of nature and the causes of generating the wealth of nature. All of this is considered as the scope of Economics. In his famous book ‘An Inquiry into the Nature and Causes of the Wealth of Nations, he believed the production & expansion of wealth as the subject matter of economics. However, Recado- a noted economist emphasized that the distribution of wealth is the study of economics. JB Shaw- a French economist further explained that it is a science which treats wealth. JS Mill defined the scope of economics as a practical science of production and distribution of wealth. All these definitions of classical economics solely focused on the concept of wealth.
Among all neoclassical idea propagators, Alfred Marshall falls on the top list. It is believed that he has given a reputed place to Economics within the domain of Social Science. He said, “Wealth was observed as the basis of human welfare. Political economy or economics is a study of mankind in the ordinary business of life”. Overall we can say that neo-classical Economists laid emphasis on the overall Human development.
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Robins- one of the noted economists has given a scarcity definition under the scope of Economics. He said economics is the science which studies human behaviour as a relationship between the ends and scarce resources which have an alternative use.
In the modern age, economic development is underway. It includes overall development like enhancing social well-being, the standard of living, removal of poverty, redundancy, disparity, and malnutrition. Overall the complete development is concerned with the scope of Economic development.
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Is there any scope in economics?
The field of economics has a significant scope, as it offers multiple career opportunities for individuals with specialised skills. As an expert in economics, you can find a job in government agencies, financial institutions, research and academia, consulting firms, data analytics and analysis, environmental economics, nonprofit organisations, etc.
How strong is the Indian Economy?
India is the 5th largest economy, with a total GDP of $3.5 trillion in 2022. The other four largest economies are – the USA, China, Japan, and Germany.
What is the difference between microeconomics and macroeconomics?
Microeconomics is the branch of economics that deals with the behaviour of individual economic agents, such as households, firms, and industries. On the other hand, Macroeconomics focuses on aggregate indicators such as national income, unemployment rates, inflation, and overall economic growth.
Hope this blog has helped you with a comprehensive understanding of the nature and scope of economics. Are you looking forward to applying to any top-notch university for Economics? Let the experts at Leverage Edu take care of your academic journey. Get in touch with us now!