Why We Should Pay Attention to the Economy

By: Brian L

Economy: a subject of both wonder and dread. It’s about the world around us. It is changing constantly, and yet we do not truly understand it half the time. For most of human history, economics was a thing studied by a select few, and the general public did not have any idea what it was. But over the years, as the economy grew and humanity progressed, economic knowledge once held by the few became more public. Today, there are newspapers dedicated to economics (The Wall street journal, The Economist, etc…), news channels allocate time on economics, and there are numerous books, for every age group, and in almost every language. Despite this, people still tilt their heads when they see words like ‘Emerging Markets’, are unable to distinguish between assets and liabilities, and make unintelligent investment decisions based on ignorance. This is why we should pay attention to the economy, and study it. We must study it to make rational, intelligent decisions, to manage our money wisely, and to have an insight to how the world works.

Economics teaches us how to make well-informed decisions. A large part of the subject is about human behavior, and making decisions based on scarcity. That is, how to get the maximum benefits with the minimum spending, like when a company makes a budget deficit, or how to get the best sales option for a cat, or even just debating whether to get a pizza or Chinese takeout for dinner. It teaches us to make intelligent choices and help us develop a financial awareness of what is going on in the world, which is vital in businesses and in our daily lives.

Also, Economics helps us in our financial management. Even though economics itself is not about how to make money, it teaches us the basic principles about how the economy functions, which helps when making decisions regarding our money. Some older generations may have grown up with a preconceived notion from their relatives that investments are just like gambling and not a reliable way of making money and a means of financial stability, and that you should just stick to saving your money in the bank, or even, under the mattress. Additionally, there are so many books about avoiding the ‘trap of the market’ that make people even more paranoid than ever. However, studying economics can be a solution to problems created due to poor economic thinking and planning.

Through studying economics, we develop an insight to how the world works. Economics can be divided into macro and micro levels. Macroeconomics concerns governments and entire countries, and on a much bigger scale than our basic daily transactions. Through the data from governments around the world, we can predict recessions and other big economic occurrences around the world. Microeconomics is about the choices we make as individuals in our daily lives. Through these data produced from the consumers and people, companies can provide ads and services specific to the person. Also, according to the American Economic Association, Economics is “a study of scarcity, the study of how people use resources, or the study of decision-making.”

Many people live their lives in ignorance to economics, making unintelligent decisions based on their small and limited economic knowledge. They always skip the economic section in the newspapers, or change the channel when economic news come up. But spending some time actually thinking about the economy can go a long way towards managing your money better, and actually make decisions intelligently.

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