Economics is the word that makes the world a marketplace.
Economics is a branch of social science that focuses on the allocation of scarce resources to individuals and businesses to satisfy their needs and wants.
It also sheds light on the principles governing the production and distribution of goods and services.
Apart from being a subject learned in school, economics covers a wide range of areas such as the distribution of income in society, macroeconomics, microeconomics and international trade.
Furthermore, an interplay of the stock market, market prices, supply, demand and other market structures come together to create a balanced system.
In the complex tapestry of human societies, economics stands as a discipline that seeks to understand and explain the allocation of resources. Much debate surrounds the characterisation of economics as a science.
By examining the scientific nature of economics, we aim to shed light on its role in deciphering the ever-evolving dynamics of global markets and human behaviour.
Though economics has all these attributes early mentioned, our sole aim in this article is to shed more light on the traits that make economics a science.
Let’s delve in.
Why Is Economics A Science?
Like every social science subject, economics is a merge of science coupled with the behavioural tendencies of man. Why is economics a science? Listed below are solid points to help you understand why economics is a science:
1. Follows a Methodological Approach
Science is all about order and a structured approach to things. Economics was born out of different theories and models propounded by several persons in the sector.
Models like the Cobb – Douglas model of production came into existence after a well-structured research process which is synonymous with what happens in science. This is one of the unique qualities that shows that economics is a science.
2. Capabilities for Predicting
The world of science can’t be complete without the topic of predictions. Predictions are made based on existing theories in Economics to explain the behaviour of individuals and companies.
Though these predictions may not be 100% accurate, it has always been a major contributor to the determination of several outcomes.
3. Testing of Hypothesis
Science is all about testing hypotheses, there is no harm if Economics has followed suit. Hypotheses are tested using data to refine existing theories and models till the best results are obtained.
Furthermore, as economists keep exploring and researching new areas of study, more hypotheses are going to be tested to make these models foolproof.
4. Utilises Tools for Mathematics and Statistics
Economics uses a range of mathematics and statistical tools like algebra, differential equations and differential calculus to analyse data and test several hypotheses.
This approach is very useful in economics which uses an avalanche of data regularly.
5. Universal Principles
Just like science, economists’ research will not be complete without putting a microscope on what makes individuals tick.
This can be based on personal preferences and cultural factors, leading us to know why people make choices.
6. Assessment by Peers
Tremendous success occurs in science because scientists assess the research work of each other to make them outstanding.
Likewise, before the acceptance of any economic model or theory, these theories would have been reviewed numerous times to meet specific standards.
7. Cross-disciplinary in Nature
Like science, economics is not a one-man show. It involves the coming together of different fields like mathematics, psychology and sociology in the formation of economic theories and models.
8. Implications for Policy
Just like science, economics has a huge role to play in the economy of any nation. Starting from economic research to economic models and theories which are later infused and drafted into policies.
Furthermore, these policies are put into consideration when major decisions are made in any nation.
The above points make it foolproof why economics is a science.
As the sector keeps growing to keep up with the ever-rising need for economists, more hypotheses are going to be tested and a methodological approach to producing new theories and models will become increasingly crucial.
This evolution not only fuels intellectual exploration but also serves as the bedrock for informed policy-making, enabling societies to adapt to the intricacies of an ever-changing economic landscape.
The continuous expansion of this field not only anticipates economic challenges but also fosters a dynamic environment where innovative ideas and evidence-based solutions can thrive.
Read here, Science and Technology in Our Society Today.