27 Aug SCOPE OF ECONOMICS
The horizon of economics is gradually expanding. It is no more a branch of knowledge that deals only with the
production and consumption. However, the basic thrust still remains on using the available resources efficiently while giving the maximum satisfaction or welfare to the people on a sustainable basis. Given this, we can list some of the major branches of economics as under:
(i) Micro Economics: This is considered to be the basic economics. Microeconomics may be defined as that branch of economic analysis which studies the economic behaviour of the individual unit, may be a person, a particular household, or a particular firm. It is a study of one particular unit rather than all the units combined together. The microeconomics is also described as price and value theory, the theory of the household, the firm and the industry. Most production and welfare theories are of the microeconomics variety.
(ii) Macro Economics: Macroeconomics may be defined as that branch of economic analysis which studies
behaviour of not one particular unit, but of all the units combined together. Macroeconomics is a study in
aggregates. Hence, it is often called Aggregative Economics. It is, indeed, a realistic method of economic analysis,
though it is complicated and involves the use of higher mathematics. In this method, we study how the equilibrium
in the economy is reached consequent upon changes in the macro-variables and aggregates. The publication of Keynes’ General Theory, in 1936, gave a strong impetus to the growth and development of modern macroeconomics.
(iii) International Economics: As the countries of the modern world are realising the significance of trade and
commerce with other countries, the role of international economics is getting more and more significant nowadays.(iv) Public Finance: The great depression of the 1930s led to the realization of the role of government in stabilising the economic growth besides other objectives like growth, redistribution of income, etc. Therefore, a full branch of economics known as Public Finance or the fiscal economics has emerged to analyse the role of government in the economy. Earlier the classical economists believed in the laissez faire economy ruling out role of the government in economic issues.
(v) Development Economics: After the Second World War many countries got freedom from the colonial rule,
their economics required different treatment for growth and development. This led to emergence of new branch
of economics known as development economics.
(vi) Health Economics: A new realisation has emerged from human development for economic growth. Therefore,
branches like health economics are gaining momentum. Similarly, educational economics is also coming up.
(vii) Environmental Economics: Unchecked emphasis on economic growth without caring for natural resources and ecological balance, now, economic growth is facing a new challenge from the environmental side. Therefore, Environmental Economics has emerged as one of the major branches of economics that is considered significant for sustainable development.
(viii) Urban and Rural Economics: Role of location is quite important for economic attainments. There is also much debate on urban-rural divide. Therefore, economists have realised that there should be specific focus on urban areas and rural areas. Therefore, there is expansion of branches like urban economics and rural economics.
Similarly, regional economics is also being emphasised to meet the challenge of geographical inequalities.
There are many other branches of economics that form the scope of economics. There are welfare economics,
monetary economics, energy economics, transport economics, demography, labour economics, agricultural
economics, gender economics, economic planning, economics of infrastructure, etc.