×

An Introduction to Economic Concepts

ECONOMY

An Introduction to Economic Concepts

Economy is a term that is widely used in the literature on economic analysis. It refers to the process of determining how the prices of economic goods and services are determined, and also to the location of industries within a market structure. The term was first introduced by economists David Norton and Alan Manning in 1947.

An economy is a place of collective production, distribution, exchange and consumption, and the interaction of other agents by collectively. In simple terms, it isdefined as a social network of practices, discourses, and interactions characterized by the production, treatment, and disposal of goods and services, by other agents acting in concert. Economists distinguish between a descriptive economic model and a stylized facts economy. A descriptive economic model is one that uses aggregate data and mathematical techniques to describe the behavior of particular industries over time, while a stylized facts economy makes use of selected theoretical assumptions about the nature of the economy. Most modern economics textbooks describe both as descriptive models.

The major areas of study that ECONOMY studies include macroeconomics which concentrates on national economies, national income forecasting, international trade and finance, business cycles, government policy, international monetary system, international business structure, international banking, public finance, international investment, central bank interventions, fiscal policy, domestic monetary system, inflation, money flow, and other macroeconomic concepts. Microeconomics studies the behavior of firms and their relationships with other firms. These include inter-firm competition, firm-to-firm competition, firm growth and expansion, firms’ sales, production and capacity utilization. The scope of microeconomics is normally narrower than that of macroeconomics because micro economic variables tend to be correlated with other macroeconomic variables.

ECONOMY affects us all by deciding what our national currency will be, what type of tax system we have, which types of education systems we will have, whether or not we will have a military and how it will be funded and how it will be deployed. The global economy works with a number of different kinds of economies. For instance, there are classical economies that are based on Western European and North American economic structures. Other kinds of economies include Asian economies, Latin American economies, Brazilian, Russian, South American and Caribbean economies.

The current book that is used as the foundation for economics is the Treatise of Economics ( CAT ) by Austrian School theorists. Some of the subjects covered in this book are microeconomics, macroeconomics, international trade and finance, business cycles, government finance, international monetary system, economic growth, international investment, economic growth and employment, price competitiveness, financial system, government spending and deficits. This is a comprehensive and advanced treatise on all topics related to the economy.

All economies operate with some basic economic models that have been developed over time, some of which have become very deeply entrenched and others just becoming more refined. For instance, while the Phillips curve is still one of the most dominant and heavily used equations in modern economics, other equations that have been developed include the Loomis curve or the Kydland curve. While the variables that are used in these equations can be varied, the concepts they represent remain constant.