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Economy

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Economy

The economy (from the ancient Greek οἰκονομία / oikonomía: “administering a home”) is a human activity that involves the production, distribution, exchange and consumption of goods and services.

However, the word has many meanings. The economy is the concept studied by economics, these bearing on economic theories and management for its implementation. The term “economics “, only in the sense of political economy, was popularized by neoclassical economists as Alfred Marshall. The word “economics” becomes this way a concise synonym for “economic science” and can be considered as a substitute for the term “political economy”. This corresponds to the significant influence of the mathematical methods used in the natural sciences.

There is also talk of the economy in the broad sense as the economic situation of a country or area, that is to say its cyclical position (with respect to economic cycles) or structural position. In this sense, the economy is thus almost synonymous both system and regime. Finally, in general, the economy is used as a synonym for reducing spending or savings. The economy may indeed be the result of a more efficient internal organization: it is called internal economy. The lower average cost due to the increase in the size of the company is an economy of scale or size of economy. The economy may be the result of a phenomenon external to the agent’s decision-making: this is called external economy or externalities, that can be either positive if they bring more economic agents, or negative, otherwise.

The economy in the modern sense began to emerge from the mercantilist and develops from Adam Smith an important analytical corpus which is generally split into two main branches: microeconomics or the study of individual behavior and macroeconomics emerging in the inter-war period, with the major work of John M. Keynes, entitled The General Theory of Employment, Interest and Money. Today, the economy applies this corpus for analysis and management of many human organizations (public authorities, private companies, cooperatives, etc.) and some areas of international finance, national development, environment, market work, culture, agriculture, etc.

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