Economics
Economics studies how scarce resources move through choices, markets, institutions, and whole economies. The same flow can be examined close-up, at system scale, or through data.
Wants can exceed available time, labor, land, materials, money, and attention.
Scarcity forces tradeoffs. Economics follows how those tradeoffs become prices, production, income, institutions, inequality, growth, and policy choices.
Choosing one use means giving up another.
Many choices depend on the next unit, not the average.
Rules change incentives and who bears costs or gains.
Economics follows choices through a connected flow of resources, income, and institutions.
Microeconomics zooms into individual decisions and markets. Macroeconomics zooms out to totals and feedback across the whole system. Policy asks how institutions change the flow.
Do not confuse the scale of a question with the tools used to answer it.
Microeconomics and macroeconomics primarily differ by scale. Econometrics is a measurement toolkit used in both. Applied fields cut across those foundations with a particular kind of problem.
Microeconomics
How do people, firms, and individual markets choose?
planned branchMacroeconomics
How does the economy behave as a connected whole?
planned branchEconometrics
How do we estimate relationships from economic data?
planned branchShift a curve. Watch price and quantity respond together.
A shift changes the whole supply or demand relationship. A movement along a curve is a response to price while that relationship stays fixed.
A model isolates a relationship so you can reason about change.
Supply and demand deliberately ignore enormous amounts of detail. Hold many things fixed, change one relationship, and ask what the model predicts about price and quantity.
A useful prediction depends on the assumptions around the model.
Changing price moves along a curve; changing the underlying relationship shifts the curve.
The model predicts direction and mechanism; data tests how well it describes a real market.