Essay sample: Economics, Micro- and Macroeconomics

Today, the scientific status of economics is taken for granted. Although, in the past   economics was not perceived as science at all. In this respect, it should be said that the change of the attitude of specialists to economics occurred under the impact of substantial changes that took place in the modern society and in the development of economic theories, which actually laid the scientific foundation to economics. In fact, today, economics is recognized as a science and, what is more, the role of economics in modern science is extremely important because the development of the modern world is highly dependent on the economic development, which, in its turn, is impossible without the development of economic theories on the basis of which policy makers at all levels define the development of industries, countries and the entire world. At the same time, it is important to distinguish two levels or branches of economics: microeconomics and macroeconomics. In fact, it is through microeconomic and macroeconomics the economic development occurs.

On analyzing the development of economics as a science, it should be said that the emergence of this science is closely intertwined with the change of the role of the economy in the life of the society. In fact, in the past epoch people did not pay much attention to scientific research in the field of economy because they did not distinguish economy from their social life. In addition, economic relations were relatively simple in the past, while, today, economics is a complex science, which is closely intertwined with other sciences, such as mathematics, sociology, politics, and others. In such a way, the growing complexity and, especially, the emergence of capitalism stimulated the emergence of economics as a science.

In this respect, it should be said that the development of capitalism made people extremely concerned with economic activities for wealth and prosperity became the major goals of human life which gradually led to the formation of the consumerist society at the present epoch. As various specialists started to research economy, they have singled out certain rules and principles which they postulated as economic rules and principles and which they used as the basis for their economic theories. For instance, it is possible to mention works of Adams, Marx, Keynes and other specialists who produced a significant impact on the development of economics as a science (Heilbroner and Milberg, 113). In fact, the creation of economic theories laid the theoretical ground for the economics as a science and the existence of the variety of theories stimulated the fast development of economics and scientific researches in this field. At the same time, the existence of rules and principles which exists in economy proves the fact that economics is a science for there is a subject of research, rules, norms and principles which can be used to research the subject and test the outcomes of researches. In other words, economics has all attributes of a science.

In this regard, works of Keynes seem to be particularly noteworthy because he actually was one of the major proponents and contributors to the development of macroeconomics, as one of the major branches of economics as a science. In his numerous scientific works, Keynes stood on the ground that the economics develops in accordance to definite rules and, what is more important, he argued that it is possible to regulate the economic development by means of control and regulation of major economic or, to put it more precisely, macroeconomic factors, such as monetary policies, fiscal policies, and unemployment, which Keynes believed to be crucial for the development of national economy of any country. Moreover, he argued that the state should regulate macroeconomic development in order to avoid possible economic and social crises.

Hence, it is important to dwell upon the macroeconomics as a branch of economics which can have a significant impact on the development of national economies and, therefore, affect the life of ordinary people. In fact, macroeconomics examines economy as a whole to explain broad aggregates and their interactions. One of the most important macroeconomic factors that influence the development of economy is the economic growth, which implies the increase in output per capita of a country for a long period of time. At this point, it is possible to speak about the growth of GDP, as one of the major indicators that reveal the economic growth of national economy. Many economists (Rajegopal, 192) consider economic growth an essential condition of the stable development of economy and prosperity of society.

On the other hand, economic progress is impossible without other macroeconomic factors, such as monetary policy and inflation. In fact, inflation and monetary policy are based on the volume of money circulating in the national economy and the level of prices. The growth of prices leads to the growth of inflation, while the state can influence it through increase or decrease of the volume of money circulating in economy, i.e. through its monetary policies. In addition, the state can use another important macroeconomic instrument ”“ its fiscal policy. Through fiscal policies the state can redistribute the national wealth and regulate the development of economy at the large scale. For instance, high taxes are producing depressing on economy, while low taxes can stimulate economic development.

At the same time, it is hardly possible to underestimate the significance of microeconomics. Unlike macroeconomics which views the economy as a whole, microeconomics is focused on lower levels of economics, namely on specific industries, companies, markets, etc. In such a way, microeconomics mainly deals with specific elements of the current economic activities, such as market development, production, supply and demand and others. In this respect, it should be said that the development of economy is impossible without the microeconomic factors which produce a significant impact on the development of economy. The modern economy, for instance, is characterized by the labor division which is crucial for the competitive development of entire countries. Under the impact of globalization, the labor division leads to the specialization of certain companies or entire countries on specific segments of international markets where companies or countries are operating and specialized on. In addition, there are traditional microeconomic factors such as supply and demand which define the development of national economies as well as international economic cooperation. It is worth mentioning the fact that the research of these microeconomic factors is not less significant than the research of macroeconomics because it influences the normal development of economy.

Thus, in conclusion, it should be said that the development of economics as science occurred under the impact of considerable socioeconomic and cultural changes. The growing concerns of the society with the economic development stimulated the growing interests of scientists to economic processes that led to the discovery of basic economic laws, rules and principles and emergence of economic theories which laid the foundation to economics as a science and contributed to the development of its major branches: microeconomics and macroeconomics.