Microeconomics/Macroeconomics

Microeconomics: The study of the economy in individual actors

Actors: People, Households, Firms, etc.
Studies actors making choices/allocation of scarce resources
- How they decide to deploy them
How these choices/allocations affect prices and markets

Macroeconomics: The study of the economy in aggregate (The bigger picture)

Studies what happens to the economy from the millions of individual actors
Focuses on mostly policy-related questions
- E.g: Raise/lower taxes, what happens if said action is implemented, regulate/deregulate, how said actions affect overall productivity

The study of Economics:

Philosophy/Basic ideas on how people make decisions -> Simplified -> Mathematical calculations

Though the math can prove results of conclusions/assumption-based, it can be coincidental and should not be treated as definitive proof.

Every actor is complicated and having all these people interact with each other results in fundamentally unpredictable interactions, so making assumptions/conclusions of these results. Simplifying the results into mathematical conclusions is valuable and can help predict future actions, but it should be taken with a grain of salt.

"An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today." - Laurence I. Peter

	Created by Hao Ting Tan over 4 years ago

The beginning of Economics