Economy

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An economy consists of the economic system
Economic system
An economic system is the combination of the various agencies, entities that provide the economic structure that defines the social community. These agencies are joined by lines of trade and exchange along which goods, money etc. are continuously flowing. An example of such a system for a closed...

 of a country or other
Other
The Other or Constitutive Other is a key concept in continental philosophy; it opposes the Same. The Other refers, or attempts to refer, to that which is Other than the initial concept being considered...

 area; the labor
Wage labour
Wage labour is the socioeconomic relationship between a worker and an employer, where the worker sells their labour under a formal or informal employment contract. These transactions usually occur in a labour market where wages are market determined...

, capital
Capital (economics)
In economics, capital, capital goods, or real capital refers to already-produced durable goods used in production of goods or services. The capital goods are not significantly consumed, though they may depreciate in the production process...

 and land
Land (economics)
In economics, land comprises all naturally occurring resources whose supply is inherently fixed. Examples are any and all particular geographical locations, mineral deposits, and even geostationary orbit locations and portions of the electromagnetic spectrum. Natural resources are fundamental to...

 resources; and the manufacturing
Manufacturing
Manufacturing is the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale...

, trade
Trade
Trade is the transfer of ownership of goods and services from one person or entity to another. Trade is sometimes loosely called commerce or financial transaction or barter. A network that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and...

, distribution
Distribution (economics)
Distribution in economics refers to the way total output, income, or wealth is distributed among individuals or among the factors of production .. In general theory and the national income and product accounts, each unit of output corresponds to a unit of income...

, and consumption
Consumption (economics)
Consumption is a common concept in economics, and gives rise to derived concepts such as consumer debt. Generally, consumption is defined in part by comparison to production. But the precise definition can vary because different schools of economists define production quite differently...

 of goods and services of that area. An economy may also be described as a spatially limited and social network
Social network
A social network is a social structure made up of individuals called "nodes", which are tied by one or more specific types of interdependency, such as friendship, kinship, common interest, financial exchange, dislike, sexual relationships, or relationships of beliefs, knowledge or prestige.Social...

 where goods and services are exchanged according to demand
Demand
- Economics :*Demand , the desire to own something and the ability to pay for it*Demand curve, a graphic representation of a demand schedule*Demand deposit, the money in checking accounts...

 and supply
Supply (economics)
In economics, supply is the amount of some product producers are willing and able to sell at a given price all other factors being held constant. Usually, supply is plotted as a supply curve showing the relationship of price to the amount of product businesses are willing to sell.In economics the...

 between participants by barter
Barter
Barter is a method of exchange by which goods or services are directly exchanged for other goods or services without using a medium of exchange, such as money. It is usually bilateral, but may be multilateral, and usually exists parallel to monetary systems in most developed countries, though to a...

 or a medium of exchange
Medium of exchange
A medium of exchange is an intermediary used in trade to avoid the inconveniences of a pure barter system.By contrast, as William Stanley Jevons argued, in a barter system there must be a coincidence of wants before two people can trade – one must want exactly what the other has to offer, when and...

 with a credit
Credit
Credit may refer to:* Debits and credits, a type of book keeping entry* Credit , acknowledging the ideas or other work of writers and contributors* Course credit, a system of measuring academic coursework...

 or debit
Debit
Debit and credit are the two aspects of every financial transaction. Their use and implication is the fundamental concept in the double-entry bookkeeping system, in which every debit transaction must have a corresponding credit transaction and vice versa.Debits and credits are a system of notation...

 value
Value (economics)
An economic value is the worth of a good or service as determined by the market.The economic value of a good or service has puzzled economists since the beginning of the discipline. First, economists tried to estimate the value of a good to an individual alone, and extend that definition to goods...

 accepted within the network.

A given economy is the end result of a process that involves its technological evolution
Technological evolution
Technological evolution is the name of a science and technology studies theory describing technology development, developed by Czech philosopher Radovan Richta.-Theory of technological evolution:...

, history
History
History is the discovery, collection, organization, and presentation of information about past events. History can also mean the period of time after writing was invented. Scholars who write about history are called historians...

 and social organization, as well as its geography
Geography
Geography is the science that studies the lands, features, inhabitants, and phenomena of Earth. A literal translation would be "to describe or write about the Earth". The first person to use the word "geography" was Eratosthenes...

, natural resource
Natural resource
Natural resources occur naturally within environments that exist relatively undisturbed by mankind, in a natural form. A natural resource is often characterized by amounts of biodiversity and geodiversity existent in various ecosystems....

 endowment, and ecology
Ecology
Ecology is the scientific study of the relations that living organisms have with respect to each other and their natural environment. Variables of interest to ecologists include the composition, distribution, amount , number, and changing states of organisms within and among ecosystems...

, as main factors. These factors give context, content, and set the conditions and parameters in which an economy functions.

Range


Today the range of fields of study examining the economy revolve around the social science of economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...

, but may include sociology
Sociology
Sociology is the study of society. It is a social science—a term with which it is sometimes synonymous—which uses various methods of empirical investigation and critical analysis to develop a body of knowledge about human social activity...

 (economic sociology
Economic sociology
Economic sociology studies both the social effects and the social causes of various economic phenomena. The field can be broadly divided into a classical period and a contemporary one. The classical period was concerned particularly with modernity and its constituent aspects...

), history
History
History is the discovery, collection, organization, and presentation of information about past events. History can also mean the period of time after writing was invented. Scholars who write about history are called historians...

 (economic history
Economic history
Economic history is the study of economies or economic phenomena in the past. Analysis in economic history is undertaken using a combination of historical methods, statistical methods and by applying economic theory to historical situations and institutions...

), anthropology
Anthropology
Anthropology is the study of humanity. It has origins in the humanities, the natural sciences, and the social sciences. The term "anthropology" is from the Greek anthrōpos , "man", understood to mean mankind or humanity, and -logia , "discourse" or "study", and was first used in 1501 by German...

 (economic anthropology
Economic anthropology
Economic anthropology is a scholarly field that attempts to explain human economic behavior using the tools of both economics and anthropology. It is practiced by anthropologists and has a complex relationship with economics...

), and geography
Geography
Geography is the science that studies the lands, features, inhabitants, and phenomena of Earth. A literal translation would be "to describe or write about the Earth". The first person to use the word "geography" was Eratosthenes...

 (economic geography
Economic geography
Economic geography is the study of the location, distribution and spatial organization of economic activities across the world. The subject matter investigated is strongly influenced by the researcher's methodological approach. Neoclassical location theorists, following in the tradition of Alfred...

). Practical fields directly related to the human activities involving production
Production (economics)
In economics, production is the act of creating 'use' value or 'utility' that can satisfy a want or need. The act may or may not include factors of production other than labor...

, distribution
Distribution (economics)
Distribution in economics refers to the way total output, income, or wealth is distributed among individuals or among the factors of production .. In general theory and the national income and product accounts, each unit of output corresponds to a unit of income...

, exchange
Trade
Trade is the transfer of ownership of goods and services from one person or entity to another. Trade is sometimes loosely called commerce or financial transaction or barter. A network that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and...

, and consumption
Consumption (economics)
Consumption is a common concept in economics, and gives rise to derived concepts such as consumer debt. Generally, consumption is defined in part by comparison to production. But the precise definition can vary because different schools of economists define production quite differently...

 of goods and services
Goods and services
In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility. It is often used when referring to a Goods and Services Tax....

 as a whole, range from engineering
Engineering
Engineering is the discipline, art, skill and profession of acquiring and applying scientific, mathematical, economic, social, and practical knowledge, in order to design and build structures, machines, devices, systems, materials and processes that safely realize improvements to the lives of...

 to management
Management
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively...

 and business administration to applied science
Applied science
Applied science is the application of scientific knowledge transferred into a physical environment. Examples include testing a theoretical model through the use of formal science or solving a practical problem through the use of natural science....

 to finance
Finance
"Finance" is often defined simply as the management of money or “funds” management Modern finance, however, is a family of business activity that includes the origination, marketing, and management of cash and money surrogates through a variety of capital accounts, instruments, and markets created...

.

All profession
Profession
A profession is a vocation founded upon specialized educational training, the purpose of which is to supply disinterested counsel and service to others, for a direct and definite compensation, wholly apart from expectation of other business gain....

s, occupations, economic agents or economic activities, contribute to the economy. Consumption
Consumption (economics)
Consumption is a common concept in economics, and gives rise to derived concepts such as consumer debt. Generally, consumption is defined in part by comparison to production. But the precise definition can vary because different schools of economists define production quite differently...

, saving
Saving (money)
Saving is income not spent, or deferred consumption. Methods of saving include putting money aside in a bank or pension plan. Saving also includes reducing expenditures, such as recurring costs...

, and investment
Investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...

 are core variable components in the economy and determine market equilibrium. There are three main sectors of economic activity: primary, secondary, and tertiary.

Due to the growing importance of the financial sector in modern times, the term real economy is used by analystsas well as politicians to denote the part of the economy that is concerned with actually producing goods and services, as ostensibly contrasted with the paper economy, or the financial side of the economy, which is concerned with buying and selling on the financial markets. Alternate and long-standing terminology distinguishes measures of an economy expressed in real values (adjusted for inflation
Inflation
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...

), such as real GDP
Real GDP
Real Gross Domestic Product is a macroeconomic measure of the value of output economy adjusted for price changes . The adjustment transforms the money-value measure, called nominal GDP, into an index for quantity of total output...

, or in nominal values (unadjusted for inflation).

Etymology


The English
English language
English is a West Germanic language that arose in the Anglo-Saxon kingdoms of England and spread into what was to become south-east Scotland under the influence of the Anglian medieval kingdom of Northumbria...

 words "economy" and "economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...

" can be traced back to the Greek
Greek language
Greek is an independent branch of the Indo-European family of languages. Native to the southern Balkans, it has the longest documented history of any Indo-European language, spanning 34 centuries of written records. Its writing system has been the Greek alphabet for the majority of its history;...

 words οἰκονόμος, i.e. "one who manages a household", a composite word derived from οἴκος ("house") and νέμω ("manage; distribute"); οἰκονομία ("household management"); and οἰκονομικός ("of a household; of family
Family
In human context, a family is a group of people affiliated by consanguinity, affinity, or co-residence. In most societies it is the principal institution for the socialization of children...

").

The first recorded sense of the word "œconomy" is in the phrase "the management of œconomic affairs", found in a work possibly composed in a monastery in 1440. "Economy" is later recorded in more general senses, including "thrift" and "administration".

The most frequently used current sense, denoting "the economic system of a country or an area", seems not to have developed until the 19th or 20th century.

Ancient times


As long as someone has been making, supplying and distributing goods or services, there has been some sort of economy; economies grew larger as societies grew and became more complex. Sumer
Sumer
Sumer was a civilization and historical region in southern Mesopotamia, modern Iraq during the Chalcolithic and Early Bronze Age....

 developed a large scale economy based on commodity money
Commodity money
Commodity money is money whose value comes from a commodity out of which it is made. It is objects that have value in themselves as well as for use as money....

, while the Babylonians and their neighboring city states later developed the earliest system of economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...

 as we think of, in terms of rules/laws on debt
Debt
A debt is an obligation owed by one party to a second party, the creditor; usually this refers to assets granted by the creditor to the debtor, but the term can also be used metaphorically to cover moral obligations and other interactions not based on economic value.A debt is created when a...

, legal contracts and law codes relating to business practices, and private property.

The Babylonians and their city state neighbors developed forms of economics comparable to currently used civil society (law) concepts. They developed the first known codified legal and administrative systems, complete with courts, jails, and government records.

Several centuries after the invention of cuneiform, the use of writing expanded beyond debt/payment certificates and inventory lists to be applied for the first time, about 2600 BC, to messages and mail delivery, history, legend, mathematics, astronomical records and other pursuits. Ways to divide private property, when it is contended... amounts of interest on debt... rules as to property and monetary compensation concerning property damage or physical damage to a person... fines for 'wrong doing'... and compensation in money for various infractions of formalized law were standardized for the first time in history.

The ancient economy was mainly based on subsistence farming. The Shekel
Shekel
Shekel , is any of several ancient units of weight or of currency. The first usage is from Mesopotamia around 3000 BC. Initially, it may have referred to a weight of barley...

 referred to an ancient unit of weight and currency. The first usage of the term came from Mesopotamia
Mesopotamia
Mesopotamia is a toponym for the area of the Tigris–Euphrates river system, largely corresponding to modern-day Iraq, northeastern Syria, southeastern Turkey and southwestern Iran.Widely considered to be the cradle of civilization, Bronze Age Mesopotamia included Sumer and the...

 circa 3000 BC. and referred to a specific mass of barley
Barley
Barley is a major cereal grain, a member of the grass family. It serves as a major animal fodder, as a base malt for beer and certain distilled beverages, and as a component of various health foods...

 which related other values in a metric
Metric (mathematics)
In mathematics, a metric or distance function is a function which defines a distance between elements of a set. A set with a metric is called a metric space. A metric induces a topology on a set but not all topologies can be generated by a metric...

 such as silver, bronze, copper etc. A barley/shekel was originally both a unit of currency
Currency
In economics, currency refers to a generally accepted medium of exchange. These are usually the coins and banknotes of a particular government, which comprise the physical aspects of a nation's money supply...

 and a unit of weight... just as the British Pound was originally a unit denominating a one pound mass of silver.

For most people the exchange of goods occurred through social relationships. There were also traders who bartered in the marketplaces. In Ancient Greece
Ancient Greece
Ancient Greece is a civilization belonging to a period of Greek history that lasted from the Archaic period of the 8th to 6th centuries BC to the end of antiquity. Immediately following this period was the beginning of the Early Middle Ages and the Byzantine era. Included in Ancient Greece is the...

, where the present English word 'economy' originated, many people were bond slaves of the freeholders. Economic discussion was driven by scarcity
Scarcity
Scarcity is the fundamental economic problem of having humans who have unlimited wants and needs in a world of limited resources. It states that society has insufficient productive resources to fulfill all human wants and needs. Alternatively, scarcity implies that not all of society's goals can be...

. Aristotle
Aristotle
Aristotle was a Greek philosopher and polymath, a student of Plato and teacher of Alexander the Great. His writings cover many subjects, including physics, metaphysics, poetry, theater, music, logic, rhetoric, linguistics, politics, government, ethics, biology, and zoology...

 (384-322 B.C.) was the first to differentiate between a use value
Use value
Use value or value in use is the utility of consuming a good; the want-satisfying power of a good or service in classical political economy. In Marx's critique of political economy, any labor-product has a value and a use-value, and if it is traded as a commodity in markets, it additionally has an...

 and an exchange value
Exchange value
In political economy and especially Marxian economics, exchange value refers to one of four major attributes of a commodity, i.e., an item or service produced for, and sold on the market...

 of goods. (Politics, Book I.) The exchange ratio he defined was not only the expression of the value of goods but of the relations between the people involved in trade
Trade
Trade is the transfer of ownership of goods and services from one person or entity to another. Trade is sometimes loosely called commerce or financial transaction or barter. A network that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and...

. For most of the time in history economy therefore stood in opposition to institutions with fixed exchange ratios as reign
Reign
A reign is the term used to describe the period of a person's or dynasty's occupation of the office of monarch of a nation or of a people . In most hereditary monarchies and some elective monarchies A reign is the term used to describe the period of a person's or dynasty's occupation of the office...

, state
State (polity)
A state is an organized political community, living under a government. States may be sovereign and may enjoy a monopoly on the legal initiation of force and are not dependent on, or subject to any other power or state. Many states are federated states which participate in a federal union...

, religion
Religion
Religion is a collection of cultural systems, belief systems, and worldviews that establishes symbols that relate humanity to spirituality and, sometimes, to moral values. Many religions have narratives, symbols, traditions and sacred histories that are intended to give meaning to life or to...

, culture
Culture
Culture is a term that has many different inter-related meanings. For example, in 1952, Alfred Kroeber and Clyde Kluckhohn compiled a list of 164 definitions of "culture" in Culture: A Critical Review of Concepts and Definitions...

, and tradition
Tradition
A tradition is a ritual, belief or object passed down within a society, still maintained in the present, with origins in the past. Common examples include holidays or impractical but socially meaningful clothes , but the idea has also been applied to social norms such as greetings...

.

Middle ages


In Medieval times, what we now call economy was not far from the subsistence level. Most exchange occurred within social groups. On top of this, the great conquerors raised venture capital
Venture capital
Venture capital is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as...

 (from ventura, ital.; risk) to finance their captures. The capital
Capital (economics)
In economics, capital, capital goods, or real capital refers to already-produced durable goods used in production of goods or services. The capital goods are not significantly consumed, though they may depreciate in the production process...

 should be refunded by the goods they would bring up in the New World
New World
The New World is one of the names used for the Western Hemisphere, specifically America and sometimes Oceania . The term originated in the late 15th century, when America had been recently discovered by European explorers, expanding the geographical horizon of the people of the European middle...

. Merchants such as Jakob Fugger (1459–1525) and Giovanni di Bicci de' Medici
Giovanni di Bicci de' Medici
Giovanni di Bicci de' Medici was an Italian banker, the first historically relevant member of Medici family of Florence, and the founder of the Medici bank...

 (1360–1428) founded the first bank
Bank
A bank is a financial institution that serves as a financial intermediary. The term "bank" may refer to one of several related types of entities:...

s. The discoveries of Marco Polo
Marco Polo
Marco Polo was a Venetian merchant traveler from the Venetian Republic whose travels are recorded in Il Milione, a book which did much to introduce Europeans to Central Asia and China. He learned about trading whilst his father and uncle, Niccolò and Maffeo, travelled through Asia and apparently...

 (1254–1324), Christopher Columbus
Christopher Columbus
Christopher Columbus was an explorer, colonizer, and navigator, born in the Republic of Genoa, in northwestern Italy. Under the auspices of the Catholic Monarchs of Spain, he completed four voyages across the Atlantic Ocean that led to general European awareness of the American continents in the...

 (1451–1506) and Vasco da Gama
Vasco da Gama
Vasco da Gama, 1st Count of Vidigueira was a Portuguese explorer, one of the most successful in the Age of Discovery and the commander of the first ships to sail directly from Europe to India...

 (1469–1524) led to a first global
Globalization
Globalization refers to the increasingly global relationships of culture, people and economic activity. Most often, it refers to economics: the global distribution of the production of goods and services, through reduction of barriers to international trade such as tariffs, export fees, and import...

 economy. The first enterprises
Company
A company is a form of business organization. It is an association or collection of individual real persons and/or other companies, who each provide some form of capital. This group has a common purpose or focus and an aim of gaining profits. This collection, group or association of persons can be...

 were trading establishments. In 1513 the first stock exchange
Stock exchange
A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...

 was founded in Antwerpen. Economy at the time meant primarily trade
Trade
Trade is the transfer of ownership of goods and services from one person or entity to another. Trade is sometimes loosely called commerce or financial transaction or barter. A network that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and...

.

Early modern times


The European captures became branches of the Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...

an states, the so-called colonies. The rising nation-state
Nation-state
The nation state is a state that self-identifies as deriving its political legitimacy from serving as a sovereign entity for a nation as a sovereign territorial unit. The state is a political and geopolitical entity; the nation is a cultural and/or ethnic entity...

s Spain
Spain
Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...

, Portugal
Portugal
Portugal , officially the Portuguese Republic is a country situated in southwestern Europe on the Iberian Peninsula. Portugal is the westernmost country of Europe, and is bordered by the Atlantic Ocean to the West and South and by Spain to the North and East. The Atlantic archipelagos of the...

, France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...

, Great Britain
Great Britain
Great Britain or Britain is an island situated to the northwest of Continental Europe. It is the ninth largest island in the world, and the largest European island, as well as the largest of the British Isles...

 and the Netherlands
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...

 tried to control the trade through custom duties and taxes in order to protect their national economy. The so-called mercantilism
Mercantilism
Mercantilism is the economic doctrine in which government control of foreign trade is of paramount importance for ensuring the prosperity and security of the state. In particular, it demands a positive balance of trade. Mercantilism dominated Western European economic policy and discourse from...

 (from mercator, lat.: merchant
Merchant
A merchant is a businessperson who trades in commodities that were produced by others, in order to earn a profit.Merchants can be one of two types:# A wholesale merchant operates in the chain between producer and retail merchant...

) was a first approach to intermediate between private wealth and public interest
Public interest
The public interest refers to the "common well-being" or "general welfare." The public interest is central to policy debates, politics, democracy and the nature of government itself...

.
The secularization
Secularization
Secularization is the transformation of a society from close identification with religious values and institutions toward non-religious values and secular institutions...

 in Europe allowed states to use the immense property of the church for the development of towns. The influence of the nobles decreased. The first Secretaries of State for economy started their work. Bankers like Amschel Mayer Rothschild
Amschel Mayer Rothschild
Amschel Mayer Rothschild was a German Jewish banker of the Rothschild family financial dynasty.He was the second child and eldest son of Mayer Amschel Rothschild , the founder of the dynasty, and Gutlé Rothschild née Schnapper .On the death of Mayer Amschel in 1812, Amschel Mayer succeeded as head...

 (1773–1855) started to finance national projects such as wars and infrastructure
Infrastructure
Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function...

. Economy from then on meant national economy as a topic for the economic activities of the citizens of a state.

The industrial revolution


The first economist
Economist
An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...

 in the true meaning of the word was the Scotsman Adam Smith
Adam Smith
Adam Smith was a Scottish social philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations...

 (1723–1790). He defined the elements of a national economy: products
Product (business)
In general, the product is defined as a "thing produced by labor or effort" or the "result of an act or a process", and stems from the verb produce, from the Latin prōdūce ' lead or bring forth'. Since 1575, the word "product" has referred to anything produced...

 are offered at a natural price generated by the use of competition
Competition
Competition is a contest between individuals, groups, animals, etc. for territory, a niche, or a location of resources. It arises whenever two and only two strive for a goal which cannot be shared. Competition occurs naturally between living organisms which co-exist in the same environment. For...

 - supply and demand
Supply and demand
Supply and demand is an economic model of price determination in a market. It concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers will equal the quantity supplied by producers , resulting in an...

 - and the division of labour
Division of labour
Division of labour is the specialisation of cooperative labour in specific, circumscribed tasks and likeroles. Historically an increasingly complex division of labour is closely associated with the growth of total output and trade, the rise of capitalism, and of the complexity of industrialisation...

. He maintained that the basic motive for free trade
Free trade
Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ from...

 is human self interest. The so-called self interest hypothesis became the anthropological basis for economics. Thomas Malthus
Thomas Malthus
The Reverend Thomas Robert Malthus FRS was an English scholar, influential in political economy and demography. Malthus popularized the economic theory of rent....

 (1766–1834) transferred the idea of supply and demand to the problem of overpopulation
Overpopulation
Overpopulation is a condition where an organism's numbers exceed the carrying capacity of its habitat. The term often refers to the relationship between the human population and its environment, the Earth...

. The United States of America became the place where millions of expatriates from all European countries were searching for free economic evolvement.

The Industrial Revolution
Industrial Revolution
The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social, economic and cultural conditions of the times...

 was a period from the 18th to the 19th century where major changes in agriculture
Agriculture
Agriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...

, manufacturing
Manufacturing
Manufacturing is the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale...

, mining
Mining
Mining is the extraction of valuable minerals or other geological materials from the earth, from an ore body, vein or seam. The term also includes the removal of soil. Materials recovered by mining include base metals, precious metals, iron, uranium, coal, diamonds, limestone, oil shale, rock...

, and transport
Transport
Transport or transportation is the movement of people, cattle, animals and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline, and space. The field can be divided into infrastructure, vehicles, and operations...

 had a profound effect on the socioeconomic and cultural conditions starting in the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...

, then subsequently spreading throughout Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...

, North America
North America
North America is a continent wholly within the Northern Hemisphere and almost wholly within the Western Hemisphere. It is also considered a northern subcontinent of the Americas...

, and eventually the world
World
World is a common name for the whole of human civilization, specifically human experience, history, or the human condition in general, worldwide, i.e. anywhere on Earth....

. The onset of the Industrial Revolution marked a major turning point in human history; almost every aspect of daily life was eventually influenced in some way.
In Europe wild capitalism
Capitalism
Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...

 started to replace the system of mercantilism
Mercantilism
Mercantilism is the economic doctrine in which government control of foreign trade is of paramount importance for ensuring the prosperity and security of the state. In particular, it demands a positive balance of trade. Mercantilism dominated Western European economic policy and discourse from...

 (today: protectionism
Protectionism
Protectionism is the economic policy of restraining trade between states through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations designed to allow "fair competition" between imports and goods and services produced domestically.This...

) and led to economic growth
Economic growth
In economics, economic growth is defined as the increasing capacity of the economy to satisfy the wants of goods and services of the members of society. Economic growth is enabled by increases in productivity, which lowers the inputs for a given amount of output. Lowered costs increase demand...

. The period today is called industrial revolution
Industrial Revolution
The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social, economic and cultural conditions of the times...

 because the system of Production
Production (economics)
In economics, production is the act of creating 'use' value or 'utility' that can satisfy a want or need. The act may or may not include factors of production other than labor...

, production and division of labour
Division of labour
Division of labour is the specialisation of cooperative labour in specific, circumscribed tasks and likeroles. Historically an increasingly complex division of labour is closely associated with the growth of total output and trade, the rise of capitalism, and of the complexity of industrialisation...

 enabled the mass production
Mass production
Mass production is the production of large amounts of standardized products, including and especially on assembly lines...

 of goods.

After World War II


After the chaos of two World War
World war
A world war is a war affecting the majority of the world's most powerful and populous nations. World wars span multiple countries on multiple continents, with battles fought in multiple theaters....

s and the devastating Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...

, policymakers searched for new ways of controlling the course of the economy. This was explored and discussed by Friedrich August von Hayek (1899–1992) and Milton Friedman
Milton Friedman
Milton Friedman was an American economist, statistician, academic, and author who taught at the University of Chicago for more than three decades...

 (1912–2006) who pleaded for a global free trade
Free trade
Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ from...

 and are supposed to be the fathers of the so called neoliberalism
Neoliberalism
Neoliberalism is a market-driven approach to economic and social policy based on neoclassical theories of economics that emphasizes the efficiency of private enterprise, liberalized trade and relatively open markets, and therefore seeks to maximize the role of the private sector in determining the...

. However, the prevailing view was that held by John Maynard Keynes
John Maynard Keynes
John Maynard Keynes, Baron Keynes of Tilton, CB FBA , was a British economist whose ideas have profoundly affected the theory and practice of modern macroeconomics, as well as the economic policies of governments...

 (1883–1946), who argued for a stronger control of the markets by the state. The theory that the state can alleviate economic problems and instigate economic growth through state manipulation of aggregate demand is called Keynesianism in his honor. In the late 1950s the economic growth in America and Europe—often called Wirtschaftswunder
Wirtschaftswunder
The term describes the rapid reconstruction and development of the economies of West Germany and Austria after World War II . The expression was used by The Times in 1950...

 (ger: economic miracle) —brought up a new form of economy: mass consumption economy. In 1958 John Kenneth Galbraith
John Kenneth Galbraith
John Kenneth "Ken" Galbraith , OC was a Canadian-American economist. He was a Keynesian and an institutionalist, a leading proponent of 20th-century American liberalism...

 (1908–2006) was the first to speak of an affluent society. In most of the countries the economic system is called a social market economy
Social market economy
The social market economy is the main economic model used in West Germany after World War II. It is based on the economic philosophy of Ordoliberalism from the Freiburg School...

.

Economic Phases of Precedence


The economy may be considered as having developed through the following Phases or Degrees of Precedence.
  • The ancient economy
    Ancient history
    Ancient history is the study of the written past from the beginning of recorded human history to the Early Middle Ages. The span of recorded history is roughly 5,000 years, with Cuneiform script, the oldest discovered form of coherent writing, from the protoliterate period around the 30th century BC...

     was mainly based on subsistence farming.
  • The industrial revolution
    Industrial Revolution
    The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social, economic and cultural conditions of the times...

     phase lessened the role of subsistence farming, converting it to more extensive
    Extensive farming
    Extensive farming or Extensive agriculture is an agricultural production system that uses small inputs of labour, fertilizers, and capital, relative to the land area being farmed....

     and mono-cultural
    Monoculture
    Monoculture is the agricultural practice of producing or growing one single crop over a wide area. It is also known as a way of farming practice of growing large stands of a single species. It is widely used in modern industrial agriculture and its implementation has allowed for large harvests from...

     forms of agriculture in the last three centuries. The economic growth took place mostly in mining, construction and manufacturing industries. Commerce
    Commerce
    While business refers to the value-creating activities of an organization for profit, commerce means the whole system of an economy that constitutes an environment for business. The system includes legal, economic, political, social, cultural, and technological systems that are in operation in any...

     became more significant due to the need for improved exchange and distribution of produce throughout the community.
  • In the economies of modern consumer societies phase there is a growing part played by services, finance
    Finance
    "Finance" is often defined simply as the management of money or “funds” management Modern finance, however, is a family of business activity that includes the origination, marketing, and management of cash and money surrogates through a variety of capital accounts, instruments, and markets created...

    , and technology
    Technology
    Technology is the making, usage, and knowledge of tools, machines, techniques, crafts, systems or methods of organization in order to solve a problem or perform a specific function. It can also refer to the collection of such tools, machinery, and procedures. The word technology comes ;...

    —the (knowledge economy
    Knowledge economy
    The knowledge economy is a term that refers either to an economy of knowledge focused on the production and management of knowledge in the frame of economic constraints, or to a knowledge-based economy. In the second meaning, more frequently used, it refers to the use of knowledge technologies to...

    ).


In modern economies, these phase precedences are somewhat differently expressed by four degrees of activity.
  • Primary stage/degree of the economy: Involves the extraction and production of raw materials, such as corn
    Corn
    Corn is the name used in the United States, Canada, and Australia for the grain maize.In much of the English-speaking world, the term "corn" is a generic term for cereal crops, such as* Barley* Oats* Wheat* Rye- Places :...

    , coal
    Coal
    Coal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure...

    , wood
    Wood
    Wood is a hard, fibrous tissue found in many trees. It has been used for hundreds of thousands of years for both fuel and as a construction material. It is an organic material, a natural composite of cellulose fibers embedded in a matrix of lignin which resists compression...

     and iron
    Iron
    Iron is a chemical element with the symbol Fe and atomic number 26. It is a metal in the first transition series. It is the most common element forming the planet Earth as a whole, forming much of Earth's outer and inner core. It is the fourth most common element in the Earth's crust...

    . (A coal miner and a fisherman would be workers in the primary degree.)
  • Secondary stage/degree of the economy: Involves the transformation of raw or intermediate materials into goods e.g. manufacturing steel into cars
    CARS
    Cars, or automobiles, motor cars, are wheeled motor vehicles used for transporting passengers.Cars or CARS may also refer to:-Entertainment:* Cars , a Disney/Pixar film series...

    , or textiles into clothing. (A builder and a dressmaker would be workers in the secondary degree.) At this stage the associated industrial economy is also sub-divided into several economic sectors (also called industries). Their separate evolution during the Industrial Revolution
    Industrial Revolution
    The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, transportation, and technology had a profound effect on the social, economic and cultural conditions of the times...

     phase is dealt with elsewhere.
  • Tertiary stage/degree of the economy: Involves the provision of services to consumers and businesses, such as baby-sitting, cinema
    Film
    A film, also called a movie or motion picture, is a series of still or moving images. It is produced by recording photographic images with cameras, or by creating images using animation techniques or visual effects...

     and banking. (A shopkeeper and an accountant would be workers in the tertiary degree.)
  • Quaternary stage/degree of the economy: Involves the research and development needed to produce products from natural resources and their subsequent by-products. (A logging company might research
    Research
    Research can be defined as the scientific search for knowledge, or as any systematic investigation, to establish novel facts, solve new or existing problems, prove new ideas, or develop new theories, usually using a scientific method...

     ways to use partially burnt wood to be processed so that the undamaged portions of it can be made into pulp for paper.) Note that education is sometimes included in this sector.


Other sectors of the developed community include :
  • the Public Sector
    Public sector
    The public sector, sometimes referred to as the state sector, is a part of the state that deals with either the production, delivery and allocation of goods and services by and for the government or its citizens, whether national, regional or local/municipal.Examples of public sector activity range...

     or state sector (which usually includes: parliament, law-courts and government centers, various emergency services, public health, shelters for empoverished and threatened people, transport facilities, air/sea ports, post-natal care, hospitals, schools, libraries, museums, preserved historical buildings, parks/gardens, nature-reserves, some universities, national sports grounds/stadiums, national arts/concert-halls or theaters and centers for various religions).
  • the Private Sector
    Private sector
    In economics, the private sector is that part of the economy, sometimes referred to as the citizen sector, which is run by private individuals or groups, usually as a means of enterprise for profit, and is not controlled by the state...

     or privately-run businesses.
  • the Social sector
    Social sector
    Social sector is one of several terms created as alternatives to nonprofit sector and nongovernmental sector. The latter are seen as putting an emphasis on what this sector is not, rather than calling attention to its focus on a social mission..Other terms that have been proposed are voluntary...

     or Voluntary sector
    Voluntary sector
    The voluntary sector or community sector is the sphere of social activity undertaken by organizations that are for non-profit and non-governmental. This sector is also called the third sector, in reference to the public sector and the private sector...

    .

Economic measures


There are a number of ways to measure economic activity of a nation. These methods of measuring economic activity include:
  • Consumer spending
    Consumer spending
    Consumer spending or consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level...

  • Exchange Rate
    Exchange rate
    In finance, an exchange rate between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency...

  • Gross domestic product
    Gross domestic product
    Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....

  • GDP per capita
  • GNP
    GNP
    Gross National Product is the market value of all products and services produced in one year by labor and property supplied by the residents of a country...

  • Stock Market
    Stock market
    A stock market or equity market is a public entity for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange as well as those only traded privately.The size of the world stock market was estimated at about $36.6 trillion...

  • Interest Rate
    Interest rate
    An interest rate is the rate at which interest is paid by a borrower for the use of money that they borrow from a lender. For example, a small company borrows capital from a bank to buy new assets for their business, and in return the lender receives interest at a predetermined interest rate for...

  • National Debt
  • Rate of Inflation
    Inflation
    In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...

  • Unemployment
    Unemployment
    Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...

  • Balance of Trade
    Balance of trade
    The balance of trade is the difference between the monetary value of exports and imports of output in an economy over a certain period. It is the relationship between a nation's imports and exports...


GDP


The GDP - Gross domestic product of a country is a measure of the size of its economy. The most conventional economic analysis of a country relies heavily on economic indicators like the GDP and GDP per capita. While often useful, it should be noted that GDP only includes economic activity for which money is exchanged.

Informal economy


An informal economy is economic activity that is neither taxed nor monitored by a government, contrasted with a formal economy. The informal economy is thus not included in that government's Gross National Product (GNP). Although the informal economy is often associated with developing countries, all economic systems contain an informal economy in some proportion.

Informal economic activity is a dynamic process which includes many aspects of economic and social theory including exchange, regulation, and enforcement. By its nature, it is necessarily difficult to observe, study, define, and measure. No single source readily or authoritatively defines informal economy as a unit of study.

The terms "under the table" and "off the books" typically refer to this type of economy. The term black market refers to a specific subset of the informal economy. The term "informal sector" was used in many earlier studies, and has been mostly replaced in more recent studies which use the newer term.

Micro economics are focused on an individual person in a given economic society and Macro economics is looking at an economy as a whole. (town, city, region)

Largest economies by GDP in 2011

List of 20 Largest Economies in Nominal GDP in 2011 by the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...

List of 20 Largest Economies in GDP (PPP) in 2011 by the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...

EWLINE
Rank Country GDP (billions of USD) Share of Global GDP
World
Gross world product
Gross world product is the total gross national product of all the countries in the world. This also equals the total gross domestic product. See measures of national income and output for more details...

70,011.680 100.00%
 European Union 17,960.206 25.65%
1  United States 15,064.816 21.52%
2  Mainland China 6,988.470 9.98%
3  Japan 5,855.383 8.36%
4  Germany 3,628.623 5.18%
5  Early Modern France 2,808.265 4.01%
6  Brazil 2,517.927 3.60%
7  United Kingdom 2,480.978 3.54%
8  Italy 2,245.706 3.21%
9  Russia 1,884.903 2.69%
10  India 1,843.382 2.63%
11  Canada 1,758.680 2.51%
12  Spain 1,536.479 2.19%
13  Australia 1,507.402 2.15%
14  Mexico 1,185.215 1.69%
15  South Korea 1,163.847 1.66%
16  Netherlands 858.282 1.23%
17  Indonesia 834.335 1.19%
18  Turkey 763.096 1.09%
19  Switzerland 665.898 0.95%
20  Sweden 571.567 0.82%
Remaining Countries 13,848.426 19.78%
EWLINE
Rank Country GDP (billions of USD) Share of Global GDP
World
Gross world product
Gross world product is the total gross national product of all the countries in the world. This also equals the total gross domestic product. See measures of national income and output for more details...

78,852.864 100.00%
 European Union 15,788.584 20.02%
1  United States 15,064.816 19.10%
2  Mainland China 11,316.224 14.35%
3  India 4,469.763 5.67%
4  Japan 4,395.600 5.57%
5  Germany 3,089.471 3.92%
6  Russia 2,376.470 3.01%
7  Brazil 2,309.138 2.93%
8  United Kingdom 2,253.585 2.86%
9  Early Modern France 2,216.769 2.81%
10  Italy 1,828.601 2.32%
11  Mexico 1,659.016 2.10%
12  South Korea 1,556.102 1.97%
13  Spain 1,413.027 1.79%
14  Canada 1,391.114 1.76%
15  Indonesia 1,122.638 1.42%
16  Turkey 1,054.560 1.34%
17  Iran 930.236 1.18%
18  Australia 918.978 1.17%
19  Republic of China 886.489 1.12%
20  Poland 766.675 0.97%
Remaining Countries 17,833.592 22.62%

Economies with the Largest Contribution to Global Economic Growth from 1996 to 2011

List of 20 Largest Economies by Incremental Nominal GDP from 1996 to 2011 by the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...

List of 20 Largest Economies by Incremental GDP (PPP) from 1996 to 2011 by the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...

EWLINE
Rank Country GDP (billions of USD) Share of Global Incremental GDP Annualized GDP Growth
World
Gross world product
Gross world product is the total gross national product of all the countries in the world. This also equals the total gross domestic product. See measures of national income and output for more details...

39,555.368 100.00% 8.7%
 European Union 8,590.950 21.72% 6.1%
1  United States 7,226.341 18.27% 6.1%
2  Mainland China 6,132.386 15.50% 47.8%
3  Brazil 1,677.875 4.24% 13.3%
4  Russia 1,493.128 3.77% 25.4%
5  India 1,467.162 3.71% 26.0%
6  United Kingdom 1,260.125 3.19% 6.9%
7  Early Modern France 1,234.680 3.12% 5.2%
8  Japan 1,212.836 3.07% 1.7%
9  Germany 1,190.811 3.01% 3.3%
10  Canada 1,144.904 2.89% 12.4%
11  Australia 1,079.758 2.73% 16.8%
12  Italy 985.759 2.49% 5.2%
13  Spain 913.829 2.31% 9.8%
14  Mexico 798.152 2.02% 13.7%
15  South Korea 590.846 1.49% 6.9%
16  Indonesia 583.589 1.48% 15.5%
17  Turkey 519.201 1.31% 14.2%
18  Netherlands 440.176 1.11% 7.0%
19  Saudi Arabia 402.551 1.02% 17.0%
20  Poland 375.097 0.95% 16.0%
Remaining Countries 8,826.162 22.31%
EWLINE
Rank Country GDP (billions of USD) Share of Global Incremental GDP Annualized GDP Growth
World
Gross world product
Gross world product is the total gross national product of all the countries in the world. This also equals the total gross domestic product. See measures of national income and output for more details...

44,637.666 100.00% 8.7%
1  Mainland China 9,259.491 20.74% 30.0%
2  United States 7,226.341 16.19% 6.1%
 European Union 7,046.287 15.79% 5.4%
3  India 3,294.148 7.38% 18.7%
4  Japan 1,446.900 3.24% 3.3%
5  Russia 1,441.025 3.23% 10.3%
6  Germany 1,241.305 2.78% 4.5%
7  Brazil 1,239.214 2.78% 7.7%
8  United Kingdom 1,018.702 2.28% 5.5%
9  South Korea 950.875 2.13% 10.5%
10  Early Modern France 946.698 2.12% 5.0%
11  Mexico 851.188 1.91% 7.0%
12  Spain 706.292 1.58% 6.7%
13  Canada 699.905 1.57% 6.8%
14  Indonesia 636.440 1.43% 8.7%
15  Turkey 634.219 1.42% 10.1%
16  Italy 623.271 1.40% 3.4%
17  Iran 573.686 1.29% 10.7%
18  Republic of China 540.237 1.21% 10.4%
19  Australia 499.933 1.12% 8.0%
20  Poland 463.329 1.04% 10.2%
Remaining Countries 10,344.467 23.17%

See also



  • Capitalism
    Capitalism
    Capitalism is an economic system that became dominant in the Western world following the demise of feudalism. There is no consensus on the precise definition nor on how the term should be used as a historical category...

  • Econometrics
    Econometrics
    Econometrics has been defined as "the application of mathematics and statistical methods to economic data" and described as the branch of economics "that aims to give empirical content to economic relations." More precisely, it is "the quantitative analysis of actual economic phenomena based on...

  • Economic history
    Economic history
    Economic history is the study of economies or economic phenomena in the past. Analysis in economic history is undertaken using a combination of historical methods, statistical methods and by applying economic theory to historical situations and institutions...

     (includes list by country)
  • Economic system
    Economic system
    An economic system is the combination of the various agencies, entities that provide the economic structure that defines the social community. These agencies are joined by lines of trade and exchange along which goods, money etc. are continuously flowing. An example of such a system for a closed...

  • Economic equilibrium
    Economic equilibrium
    In economics, economic equilibrium is a state of the world where economic forces are balanced and in the absence of external influences the values of economic variables will not change. It is the point at which quantity demanded and quantity supplied are equal...

  • History of money
    History of money
    The history of money spans thousands of years. Numismatics is the scientific study of money and its history in all its varied forms.Many items have been used as commodity money such as natural scarce precious metals, cowry shells, barley, beads etc., as well as many other things that are thought of...

  • Non-market economics
  • Macroeconomics
    Macroeconomics
    Macroeconomics is a branch of economics dealing with the performance, structure, behavior, and decision-making of the whole economy. This includes a national, regional, or global economy...

  • Microeconomics
    Microeconomics
    Microeconomics is a branch of economics that studies the behavior of how the individual modern household and firms make decisions to allocate limited resources. Typically, it applies to markets where goods or services are being bought and sold...

  • Supply and demand
    Supply and demand
    Supply and demand is an economic model of price determination in a market. It concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers will equal the quantity supplied by producers , resulting in an...

  • Thermoeconomics
    Thermoeconomics
    Thermoeconomics, also referred to as biophysical economics, is a school of heterodox economics that applies the laws of thermodynamics to economic theory. The term "thermoeconomics" was coined in 1962 by American engineer Myron Tribus, and developed by the statistician and economist Nicholas...

  • World Economy
    World economy
    The world economy, or global economy, generally refers to the economy, which is based on economies of all of the world's countries, national economies. Also global economy can be seen as the economy of global society and national economies – as economies of local societies, making the global one....



Further reading

  • Friedman, Milton, Capitalism and Freedom, 1962.
  • Galbraith, John Kenneth, The Affluent Society, 1958.
  • Keynes, John Maynard, The General Theory of Employment, Interest and Money, 1936.
  • Smith, Adam, An Inquiry into the Nature and Causes of the Wealth of Nations, 1776.