What Is Economics?
Economics is the study of how people choose to use resources.
Resources include the time and talent people have available, the land, buildings, equipment, and other tools on hand, and the knowledge of how to combine them to create useful products and services.
Important choices involve how much time to devote to work, to school, and to leisure, how many dollars to spend and how many to save, how to combine resources to produce goods and services, and how to vote and shape the level of taxes and the role of government.
Often, people appear to use their resources to improve their well-being. Well-being includes the satisfaction people gain from the products and services they choose to consume, from their time spent in leisure and with family and community as well as in jobs, and the security and services provided by effective governments. Sometimes, however, people appear to use their resources in ways that don't improve their well-being.
In short, economics includes the study of labor, land, and investments, of money, income, and production, and of taxes and government expenditures. Economists seek to measure well-being, to learn how well-being may increase over time, and to evaluate the well-being of the rich and the poor. The most famous book in economics is the Inquiry into the Nature and Causes of The Wealth of Nations written by Adam Smith, and published in 1776 in Scotland.
Although the behavior of individuals is important, economics also addresses the collective behavior of businesses and industries, governments and countries, and the globe as a whole. Microeconomics starts by thinking about how individuals make decisions. Macroeconomics considers aggregate outcomes. The two points of view are essential in understanding most economic phenomena.
The list of fields in economics illustrates the scope of economic thought.
Definitions of Economics from Historic Textbooks
"Economics is the study of people in the ordinary business of life."
-- Alfred Marshall, Principles of economics; an introductory volume (London: Macmillan, 1890)
"Economics is the science which studies human behavior as a relationship between given ends and scarce means which have alternative uses."
-- Lionel Robbins, An Essay on the Nature and Significance of Economic Science (London: MacMillan, 1932)
Economics is the "study of how societies use scarce resources to produce valuable commodities and distribute them among different people."
-- Paul A. Samuelson, Economics (New York: McGraw-Hill, 1948)
About the American Economic Association
The Association has about 18,000 members from all over the world, most of whom are working economists in academia, business, government, international and not-for-profit agencies. It was founded in 1885 to promote the study of economics from all points of view. "The Association as such will take no partisan attitude, nor will it commit its members to any position on practical economic questions." The Association publishes seven journals. About 4,000 libraries subscribe to the journals and individual members receive journals with membership. The Association also produces ECONlit, a database to identify and locate books and articles in economics. The annual meeting of the Association, usually in early January, attracts about eight thousand economists who present their work and discuss current economic issues. The Association recognizes with awards the achievement of a small number of economists who have made outstanding achievements in the advance of economic thought. The Association promotes the market for economists by helping employers find applicants and vice versa. The Association is headquartered in Nashville, Tennessee.