6 reasons for why is economics a social science
Is economics a social science?
Yes. why is economics a social science? Economics is a social science because of the following reasons.
Study about the human behaviour
Employs models and theories
Examine the social interaction between the parties
Apply the empirical approach
Interacted with other social sciences
Uses historical data and cultural contexts
In this article, firstly, we will discuss what is economics and what is a social science. Next, we will broadly discuss on reasons for why is economics considered a social science.
What is economics?
Many famous economists have defined economics in different ways. Based on their opinions, economics can be defined as follows.
Economics is the science of understanding human behaviour when there is a scarcity of resources. In other words, economics says how people respond and make decisions to solve the problem of scarcity.
In economics, we usually talk about wealth and finance, but economics is not all about the money.
A broad discipline, economics aids in understanding past trends, interpreting what is happening of the day, and forecasting what’s to come.
From micro-level entities to macro-level entities are studied under the economics.
In microeconomics, we study how individual level entities (micro entities) make decisions based on the economic factors. Usually in microeconomics, we discuss about the topics such as scarcity, shortage, demand, supply, market equilibrium, elasticity, market structures, and so on.
In macroeconomics, we study how aggregate-level entities (macro entities) make decisions based on economic factors. Usually in microeconomics, we discuss about the topics such as gross domestic production (GDP), inflation, recession, depression, unemployment, money market and so on.
What is a social science?
A social science can be defined as an academic science that focus on the study of the human society and social relationships.
Characteristics of social science
We can identify several major characteristics of a social science. They are,
The studies that focus on the human behavior
Social science use scientific methods to analyze the behavior of humans
Social science uses past data and cultural contexts to understand about the present human behavior.
Examples of social science
For the examples of social sciences, we can say
Economics
Anthropology
Sociology
Psychology
Why is economics considered a social science?
Economics is a social science concerned with a few important reasons. Here are 6 reasons for why economics is a social science.
Economics study about the human behaviour
People rationally make decisions based on their own interests, according to economic theory. Essentially, this means that economists research how individuals decide how best to use their resources—including time and money—to accomplish their objectives.
In other words, mainly economics explains how is behavour of the humans under the problem of scarcity of resources to fulfil the unlimited needs and wants.
You may interested into read more,
Scarcity vs Shortage: Examples, Similarities & Differences
What are the Three Basic Economic Problems and Their Solutions?
Needs and wants: Meaning, examples and differences
According to economists, there are four main parties in the economy. They are, consumers, business organizations, governments and the foreign sector. All of these sectors get decisions to maximize their satisfaction.
As examples,
According to the theory of demand, consumers demand different quantity of goods and services at different prices to maximize their satisfaction. According to the theory of supply, suppliers (business organizations) supply different quantity of goods and services at different prices to maximize their satisfaction. Based on demand and supply factors, market equilibrium price will be decided.
What is the difference between supply vs quantity supplied?
Market Equilibrium – With Examples & Graph
What is the difference between demand and quantity demanded?
Government implement economic policies such as fiscal policy, monetary policy and supply side policies to maximize the economic wellbeing of the country.
You may be interested into read more,
6 Main Macroeconomic Objectives of an Economy
What is expansionary fiscal policy?
Monetary policy : Objectives and tools
Supply Side policies – With Examples
Economics employs models and theories
Economics is a social science because it employs models and theories. To comprehend and forecast economic behavior, economists use models and theories. In order to shed light on economic relationships, these models simplify difficult real-world scenarios. Economists create theories in order to study human behavior and decision-making. To illustrate their theories, economists often employ mathematical functions or curves.
In microeconomics, for instance, the underlying presumptions and theories of firms and consumers are shaped by human motivations and systems. Next, different models are presented by economists, including budget lines, indifference curves, utility functions and curves, supply-demand functions and curves, and short- and long-term cost curves.
Economics examine the social interaction between the parties
Economics frequently studies the relationships that exist between consumers, business organizations, and governments in a given society. It explores how market prices, income distribution, and economic growth are shaped by these interactions.
For example, the government implements supply-side policies such as deregulation. Deregulation means the government removes the rules and regulations toward a particular industry with the intention of making it easier for businesses to operate and enter the market. It increases the competitiveness of the industry. Finally, it will increase the gross domestic product of the country and the purchasing power of the consumers.
You may be interested into read more,
Supply Side policies – With Examples
Economics apply the empirical approach
To study economic phenomena, economists gather information, perform empirical research, and apply statistical techniques. The social sciences frequently employ this empirical approach.
As examples, we can conduct scientific research to investigate the relationship between macroeconomic variables such as GDP, inflation, unemployment, net exports and so on. For these studies, we use statistical techniques such as regression analysis, hypothesis testing and so on.
Economics is interacted with other social sciences
For the purpose of understanding and clarifying economic behavior, economics commonly consults other social sciences, including political science, psychology, and sociology. It acknowledges the impact of social and psychological factors on economic decisions.
As examples, when economy is in a recession, purchasing power of the people will be reduced. Then people have to face with psychological and social problems.
Economics uses historical data and cultural contexts
Economics is a social science that studies historical data and cultural contexts. By incorporating historical and cultural contexts into its analysis, economics goes beyond numbers and equations. To comprehend how economic systems, like capitalism and socialism, have developed and impacted society over time, economic history and system evolution are closely examined. A thorough understanding of economic phenomena is thought to be provided by elements such as social norms, cultural perspectives on labor and wealth, and historical occurrences like industrial revolutions or wars.
