Economics as a Beautiful Subject: Its Concepts & Principles Explained for Everyone (DRAFT)…. by Subroto Roy
Economics as a Beautiful Subject: Its Concepts & Principles Explained for Everyone….
by Subroto Roy Draft 12 July 2019, 11 October 2019, 2 February 2020
0. Economics is a beautiful science that is important to mankind’s wellbeing and progress. The purpose of this work is to describe and explain its main concepts and principles to any person who is literate and numerate, that is, to just about everyone or anyone who wants to know…
0.1. Economics is about… people… homo sapiens (tho yes there’s a general theory from biology yet to be written)…
and those people’s
budgets
needs
decisions
learning
productive capacity.
0.2. It’s also about
prices
technology
government finance
domestic trade
money & banking
world trade & payments.
0.3. Time does not stand still,
so prices have to include
interest-rates and cross interest-rates
and quantity decisions have to include
decisions about needs over time, ie Savings
decisions about productive capacity over time, ie Investment.
0.4. There are
Consumption goods,
for the present…
and
Capital goods
taking us & being taken by us into the future…
0.5. Traditionally, Economics has had its
Three Great Categories:
Consumption
Production
Exchange
and a Fourth too…
Distribution…
0.6. Then there is
Theory of Value
or “Microeconomics”, theory of the “Real Economy”, where measurements are of quantities of goods and services, and of relative prices,
and
Theory of Money
or “Macroeconomics”, theory of the “Nominal Economy”, measured in monetary units, ie units of fiat money…
0.7. The attempt to write “microeconomic foundations of macroeconomics” has been the attempt to comprehend “aggregate” or “macro” sized variables like
Consumption
Savings
Investment
Demand for & Supply of Money
in conceptual terms rooted in terms of the “micro” decisions (or “constrained optimizations”) of masses of individual people…. as these individuals may happen to be arranged in
Households
(for Consumption)
and/or
Firms
(for Production…)
Exchange appears everywhere between Households, Firms, Governments as people seek to acquire what they have greater need of by means of what they have less need of.
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