Applied Fields in Economics

Of course, there are a larger number of applied fields in economics. Some of these draw more especially on macroeconomics, some on microeconomics, and some draw on aspects of both. An important applied field that draws on both microeconomics and macroeconomics is international trade theory. Since this field treats the economic system of a country both as a whole and as a part of a world community of trading nations, it is both macroeconomic and microeconomic. Similarly, urban and regional economics tends to be both microeconomic and macroeconomic, since it treats the economies of regions and cities both as wholes and as parts of a larger interdependent community. Economic development, which studies the economic progress the poorer countries, is largely macroeconomic but has its microeconomic aspects.

Industrial organization is an applied field which concentrates on the operation of individual industries, in a less abstract way, but is mainly a specialization within microeconomics. Similarly, labor economics studies the economics of labor markets, and, while it has some macroeconomic aspects, is mainly a specialization within microeconomics. Agricultural economics and the economics of public utilities and regulation are similarly specializations within microeconomics.

The study of the monetary system and the demand for money are a specialization within macroeconomics, as are the studies of investment, inventories, consumption expenditure, and business fluctuations.

Some subspecializations focus more on method and approach and so can be either macroeconomic or microeconomic, depending on the application. Economic statistics, econometrics, and economic history are cases in point. Somewhat similarly, the economics of the public sector is both macroeconomic and microeconomic because government has functions in both spheres.

Other subspecializations straddle the border of microeconomics and macroeconomics because they draw on one of the two great fields but have applications in the other. The economics of information is a case in point. The methods used in this field of specialization are mostly microeconomic, but the results are widely believed to be important in macroeconomics.

Of course, some subfields belong to microeconomics, and some to macroeconomics, but many overlap these two great subdivisions. Here is a tabular summary of the major subfields:

But now is the time to see how these fields and subfields of economics try to think through their subject matter. How do we study economics?

Positive and Normative Approaches

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