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, 26 April 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 & decision-making

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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