An economy (from Greek "household" and o "manage") is an area of the production, distribution, or trade[1], and consumption of goods and services by different agents. Understood in its broadest sense, 'The economy is defined as a social domain that emphasizes the practices, discourses, and material expressions associated with the production, use, and management of resources'.[2] Economic agents can be individuals, businesses, organizations, or governments. Economic transactions occur when two parties agree to the value or price of the transacted good or service, commonly expressed in a certain currency. Monetary transactions only account for a small part of the economic domain.
Economic activity is spurred by production which uses natural resources, labor, and capital. It has changed over time due to technology (automation, accelerator of process, reduction of cost functions), innovation (new products, services, processes, new markets, expands markets, diversification of markets, niche markets, increases revenue functions) such as, that which produces intellectual property and changes in industrial relations (for example, child labor being replaced in some parts of the world with universal access to education).
A given economy is the result of a set of processes that involves its culture, values, education, technological evolution, history, social organization, political structure and legal systems, as well as its geography, natural resource endowment, and ecology, as main factors. These factors give context, content, and set the conditions and parameters in which an economy functions. In other words, the economic domain is a social domain of human practices and transactions. It does not stand alone.
A market-based economy is where goods and services are produced and exchanged according to demand and supply between participants (economic agents) by barter or a medium of exchange with a credit or debit value accepted within the network, such as a unit of currency.
A command-based economy is where political agents directly control what is produced and how it is sold and distributed.
A green economy is low-carbon, resource efficient, and socially inclusive. In a green economy, growth in income and employment are driven by public and private investments that reduce carbon emissions and pollution, enhance energy and resource efficiency, and prevent the loss of biodiversity and ecosystem services.[3]
Today the range of fields of the study examining the economy revolve around the social science of economics, but may include sociology (economic sociology), history (economic history), anthropology (economic anthropology), and geography (economic geography). Practical fields directly related to the human activities involving production, distribution, exchange, and consumption of goods and services as a whole, are engineering, management, business administration, applied science, and finance.
All professions, occupations, economic agents or economic activities, contribute to the economy. Consumption, saving, and investment are variable components in the economy that determine macroeconomic equilibrium. There are three main sectors of economic activity: primary, secondary, and tertiary.
Due to the growing importance of the economical sector in modern times,[4] the term real economy is used by analysts[5][6] as well as politicians[7] to denote the part of the economy that is concerned with the actual production of goods and services,[8] as ostensibly contrasted with the paper economy, or the financial side of the economy,[9] which is concerned with buying and selling on the financial markets. Alternate and long-standing terminology distinguishes measures of an economy expressed in real values (adjusted for inflation), such as real GDP, or in nominal values (unadjusted for inflation).[10]
The English words "economy" and "economics" can be traced back to the Greek word (i.e. "household management"), a composite word derived from ("house;household;home") and ("manage; distribute;to deal out;dispense") by way of ("household management").
The first recorded sense of the word "economy" is in the phrase "the management of conomic affairs", found in a work possibly composed in a monastery in 1440. "Economy" is later recorded in more general senses, including "thrift" and "administration".
The most frequently used current sense, denoting "the economic system of a country or an area", seems not to have developed until the 19th or 20th century.[11]
As long as someone has been making, supplying and distributing goods or services, there has been some sort of economy; economies grew larger as societies grew and became more complex. Sumer developed a large-scale economy based on commodity money, while the Babylonians and their neighboring city states later developed the earliest system of economics as we think of, in terms of rules/laws on debt, legal contracts and law codes relating to business practices, and private property.[12]
The Babylonians and their city state neighbors developed forms of economics comparable to currently used civil society (law) concepts.[13] They developed the first known codified legal and administrative systems, complete with courts, jails, and government records.
The ancient economy was mainly based on subsistence farming. The Shekel referred to an ancient unit of weight and currency. The first usage of the term came from Mesopotamia circa 3000 BC., and referred to a specific mass of barley which related other values in a metric such as silver, bronze, copper etc. A barley/shekel was originally both a unit of currency and a unit of weight, just as the British Pound was originally a unit denominating a one-pound mass of silver.
For most people, the exchange of goods occurred through social relationships. There were also traders who bartered in the marketplaces. In Ancient Greece, where the present English word 'economy' originated, many people were bond slaves of the freeholders. The economic discussion was driven by scarcity.
In Medieval times, what we now call economy was not far from the subsistence level. Most exchange occurred within social groups. On top of this, the great conquerors raised venture capital (from ventura, ital.; risk) to finance their captures. The capital should be refunded by the goods they would bring up in the New World. Merchants such as Jakob Fugger (14591525) and Giovanni di Bicci de' Medici (13601428) founded the first banks.[citation needed] The discoveries of Marco Polo (12541324), Christopher Columbus (14511506) and Vasco da Gama (14691524) led to a first global economy. The first enterprises were trading establishments. In 1513, the first stock exchange was founded in Antwerpen. Economy at the time meant primarily trade.
The European captures became branches of the European states, the so-called colonies. The rising nation-states Spain, Portugal, France, Great Britain and the Netherlands tried to control the trade through custom duties and (from mercator, lat.: merchant) was a first approach to intermediate between private wealth and public interest. The secularization in Europe allowed states to use the immense property of the church for the development of towns. The influence of the nobles decreased. The first Secretaries of State for economy started their work. Bankers like Amschel Mayer Rothschild (17731855) started to finance national projects such as wars and infrastructure. Economy from then on meant national economy as a topic for the economic activities of the citizens of a state.
The first economist in the true modern meaning of the word was the Scotsman Adam Smith (17231790) who was inspired partly by the ideas of physiocracy, a reaction to mercantilism and also later Economics student, Adam Mari.[14] He defined the elements of a national economy: products are offered at a natural price generated by the use of competition - supply and demand - and the division of labor. He maintained that the basic motive for free trade is human self-interest. The so-called self-interest hypothesis became the anthropological basis for economics. Thomas Malthus (17661834) transferred the idea of supply and demand to the problem of overpopulation.
The Industrial Revolution was a period from the 18th to the 19th century where major changes in agriculture, manufacturing, mining, and transport had a profound effect on the socioeconomic and cultural conditions starting in the United Kingdom, then subsequently spreading throughout Europe, North America, and eventually the world. The onset of the Industrial Revolution marked a major turning point in human history; almost every aspect of daily life was eventually influenced in some way. In Europe wild capitalism started to replace the system of mercantilism (today: protectionism) and led to economic growth. The period today is called industrial revolution because the system of Production, production and division of labor enabled the mass production of goods.
The contemporary concept of "the economy" wasn't popularly known until the American Great Depression in the 1930s.[15]
After the chaos of two World Wars and the devastating Great Depression, policymakers searched for new ways of controlling the course of the economy. This was explored and discussed by Friedrich August von Hayek (18991992) and Milton Friedman (19122006) who pleaded for a global free trade and are supposed to be the fathers of the so-called neoliberalism. However, the prevailing view was that held by John Maynard Keynes (18831946), who argued for a stronger control of the markets by the state. The theory that the state can alleviate economic problems and instigate economic growth through state manipulation of aggregate demand is called Keynesianism in his honor. In the late 1950s, the economic growth in America and Europeoften called Wirtschaftswunder (ger: economic miracle) brought up a new form of economy: mass consumption economy. In 1958, John Kenneth Galbraith (19082006) was the first to speak of an affluent society. In most of the countries the economic system is called a social market economy.
With the fall of the Iron Curtain and the transition of the countries of the Eastern Block towards democratic government and market economies, the idea of the post-industrial society is brought into importance as its role is to mark together the significance that the service sector receives at the place of the industrialization, as well the first usage of this term, some relate it to Daniel Bell's 1973 book, The Coming of Post-Industrial Society, while other - to social philosopher Ivan Illich's book, Tools for Conviviality. The term is also applied in philosophy to designate the fading of postmodernism in the late 90s and especially in the beginning of the 21st century.
With the spread of Internet as a mass media and communication medium especially after 2000-2001, the idea for the Internet and information economy is given place because of the growing importance of ecommerce and electronic businesses, also the term for a global information society as understanding of a new type of "all-connected" society is created. In the late 00s, the new type of economies and economic expansions of countries like China, Brazil, and India bring attention and interest to different from the usually dominating Western type economies and economic models.
The economy may be considered as having developed through the following Phases or Degrees of Precedence.
In modern economies, these phase precedences are somewhat differently expressed by the three-sector theory.[citation needed]
Other sectors of the developed community include:
There are a number of ways to measure economic activity of a nation. These methods of measuring economic activity include:
The GDP - Gross domestic product of a country is a measure of the size of its economy. The most conventional economic analysis of a country relies heavily on economic indicators like the GDP and GDP per capita. While often useful, GDP only includes economic activity for which money is exchanged.
An informal economy is economic activity that is neither taxed nor monitored by a government, contrasted with a formal economy. The informal economy is thus not included in that government's gross national product (GNP). Although the informal economy is often associated with developing countries, all economic systems contain an informal economy in some proportion.
Informal economic activity is a dynamic process which includes many aspects of economic and social theory including exchange, regulation, and enforcement. By its nature, it is necessarily difficult to observe, study, define, and measure. No single source readily or authoritatively defines informal economy as a unit of study.
The terms "under the table" and "off the books" typically refer to this type of economy. The term black market refers to a specific subset of the informal economy. The term "informal sector" was used in many earlier studies, and has been mostly replaced in more recent studies which use the newer term.
The informal sector makes up a significant portion of the economies in developing countries but it is often stigmatized as troublesome and unmanageable. However the informal sector provides critical economic opportunities for the poor and has been expanding rapidly since the 1960s. As such, integrating the informal economy into the formal sector is an important policy challenge.
Economic research is conducted in fields as different as Economics, Economic sociology, Economic anthropology, or Economic history.
See the rest here:
- Recruitment - Wikipedia [Last Updated On: January 27th, 2017] [Originally Added On: January 27th, 2017]
- Resource-based economy and pay-it-forward | The Moneyless ... [Last Updated On: January 30th, 2017] [Originally Added On: January 30th, 2017]
- A Resource Based Economy - worldsocialism.org [Last Updated On: January 30th, 2017] [Originally Added On: January 30th, 2017]
- Trump's Flawed Logic Regarding US-Mexico Relations - Fair Observer [Last Updated On: February 7th, 2017] [Originally Added On: February 7th, 2017]
- Economic freedom achievable through knowledge based economy, innovative technical skill development - President - Asian Tribune [Last Updated On: February 7th, 2017] [Originally Added On: February 7th, 2017]
- Younger generation inheritors of knowledge-based economy: President - Lanka Business Online [Last Updated On: February 7th, 2017] [Originally Added On: February 7th, 2017]
- Morguard - 2017 Real Estate Investment Trends to Watch in Canada - Canada NewsWire (press release) [Last Updated On: February 7th, 2017] [Originally Added On: February 7th, 2017]
- Ask Yourself These Two Questions About America's Economic Future - Fortune [Last Updated On: February 8th, 2017] [Originally Added On: February 8th, 2017]
- The Informal Economy and Decent Work: A Policy Resource ... [Last Updated On: February 8th, 2017] [Originally Added On: February 8th, 2017]
- Thunder Bay's population experiencing low growth - Tbnewswatch.com [Last Updated On: February 9th, 2017] [Originally Added On: February 9th, 2017]
- Substantial investment in agriculture needed to ensure enough food for all - Daily Nation [Last Updated On: February 9th, 2017] [Originally Added On: February 9th, 2017]
- Can Russia project power while battered by economic woes? - Asia Times [Last Updated On: February 9th, 2017] [Originally Added On: February 9th, 2017]
- When will Russia finally break its 'resource curse'? - Russia Direct [Last Updated On: February 10th, 2017] [Originally Added On: February 10th, 2017]
- TEA & TWO SLICES | On Giant Snow Penises And Christy Clark's Shudder-Worthy Interview - Scout Magazine (blog) [Last Updated On: February 10th, 2017] [Originally Added On: February 10th, 2017]
- Can Russia project power while battered by economic woes ... - MENAFN.COM [Last Updated On: February 11th, 2017] [Originally Added On: February 11th, 2017]
- Siemens backs Qatar''s economic ambitions with innovation - MENAFN.COM [Last Updated On: February 12th, 2017] [Originally Added On: February 12th, 2017]
- The 'Dutch disease' reexamined: Resource booms can benefit the wider economy - USAPP American Politics and Policy (blog) [Last Updated On: February 13th, 2017] [Originally Added On: February 13th, 2017]
- Charles Lawton: Here's a proposal to create real equality of job opportunity - Press Herald [Last Updated On: February 14th, 2017] [Originally Added On: February 14th, 2017]
- India can't write-off coal-based energy so soon: World Coal Association - Economic Times [Last Updated On: February 14th, 2017] [Originally Added On: February 14th, 2017]
- The pathologies of redistributive resource transfers - Livemint [Last Updated On: February 15th, 2017] [Originally Added On: February 15th, 2017]
- Jessica Wright: Well-managed farmland benefits community, watershed - Conway Daily Sun [Last Updated On: February 15th, 2017] [Originally Added On: February 15th, 2017]
- Evaluate FLSA for its Ability to Keep Pace with Today's Workplace, SHRM Tells House Subcommittee - SHRM [Last Updated On: February 16th, 2017] [Originally Added On: February 16th, 2017]
- Officials hope fiber optic expansion helps diversify Decatur's economy - The Decatur Daily [Last Updated On: February 16th, 2017] [Originally Added On: February 16th, 2017]
- 10th Biennial Nehalem Bay Estuary Cleanup set - Tillamook Headlight-Herald [Last Updated On: February 16th, 2017] [Originally Added On: February 16th, 2017]
- Howard gives Barnett a hand on hustings - The West Australian [Last Updated On: February 18th, 2017] [Originally Added On: February 18th, 2017]
- EDITORIAL COMMENT: Let's celebrate President's birthday with ... - Chronicle [Last Updated On: February 20th, 2017] [Originally Added On: February 20th, 2017]
- Kentucky Main Street Program Communities Contributed $110M to State Economy in 2016 - WMKY [Last Updated On: February 20th, 2017] [Originally Added On: February 20th, 2017]
- GM, Steelcase see a web of opportunity in the circular economy - GreenBiz [Last Updated On: February 21st, 2017] [Originally Added On: February 21st, 2017]
- The sputtering energy economy: Can it be revved up? - Meridian Star [Last Updated On: February 21st, 2017] [Originally Added On: February 21st, 2017]
- The difference between Malcolm Turnbull and Justin Trudeau - The Australian Financial Review [Last Updated On: February 21st, 2017] [Originally Added On: February 21st, 2017]
- In the Face of a Trump Environmental Rollback, California Stands in ... - Yale Environment 360 [Last Updated On: February 22nd, 2017] [Originally Added On: February 22nd, 2017]
- Report: Boundary Waters nets $77 million from summer visitors - Duluth News Tribune [Last Updated On: February 22nd, 2017] [Originally Added On: February 22nd, 2017]
- DENIM SPIRIT: An economy based on abundance - Finger Lakes Times [Last Updated On: February 23rd, 2017] [Originally Added On: February 23rd, 2017]
- HR International to hold confab on African economy - Guardian [Last Updated On: February 24th, 2017] [Originally Added On: February 24th, 2017]
- Event promotes innovation and technology expansion - News - Castlegar News [Last Updated On: February 24th, 2017] [Originally Added On: February 24th, 2017]
- The Venus Project Plans to Bring Humanity to the Next Stage of Social Evolution. Here's How. - Futurism [Last Updated On: February 24th, 2017] [Originally Added On: February 24th, 2017]
- Best returns since 1900? Resource based countries, including ... - Financial Post [Last Updated On: February 24th, 2017] [Originally Added On: February 24th, 2017]
- Economic growth projected for Saskatchewan in 2017 | Regina ... - Regina Leader-Post [Last Updated On: February 24th, 2017] [Originally Added On: February 24th, 2017]
- Energy as a Model for US-Mexico Economic Partnership - RealClearEnergy [Last Updated On: February 24th, 2017] [Originally Added On: February 24th, 2017]
- Science and Technology: Minister says FG will harness natural ... - Pulse Nigeria [Last Updated On: February 24th, 2017] [Originally Added On: February 24th, 2017]
- Montana Jobs Not Well Positioned - Big Sky Business Journal - Big Sky Business Journal [Last Updated On: February 25th, 2017] [Originally Added On: February 25th, 2017]
- The future of WA's economy: Life beyond mining - WAtoday [Last Updated On: February 27th, 2017] [Originally Added On: February 27th, 2017]
- Verdant Zeal set to celebrate decade of providing media solutions - Guardian [Last Updated On: February 28th, 2017] [Originally Added On: February 28th, 2017]
- Lessons from Canada's scientific resistance - Bulletin of the Atomic Scientists [Last Updated On: February 28th, 2017] [Originally Added On: February 28th, 2017]
- St Ann can do better Earl Jarrett - Jamaica Gleaner [Last Updated On: February 28th, 2017] [Originally Added On: February 28th, 2017]
- Firm canvasses technology strategy - The Nation Newspaper [Last Updated On: March 3rd, 2017] [Originally Added On: March 3rd, 2017]
- Mandryk: Next Saskatchewan boom needs to be from our heritage fund - Regina Leader-Post [Last Updated On: March 3rd, 2017] [Originally Added On: March 3rd, 2017]
- Bank of Canada channels Al Gore - Toronto Sun [Last Updated On: March 3rd, 2017] [Originally Added On: March 3rd, 2017]
- Australia's economy has been growing for 25 years straight Quartz - Quartz [Last Updated On: March 4th, 2017] [Originally Added On: March 4th, 2017]
- The Venus Project envisions a sustainable redesign of our cities and civilization - Inhabitat [Last Updated On: March 4th, 2017] [Originally Added On: March 4th, 2017]
- State's high-tech hits $1 billion economic milestone - Daily Inter Lake [Last Updated On: March 7th, 2017] [Originally Added On: March 7th, 2017]
- The startup economy - Canadian Lawyer Magazine [Last Updated On: March 7th, 2017] [Originally Added On: March 7th, 2017]
- Nehalem Bay Estuary Cleanup - North Coast Citizen [Last Updated On: March 7th, 2017] [Originally Added On: March 7th, 2017]
- Pipelines to be a 'fundamental' issue for NDP leadership race: Julian - Hill Times (subscription) [Last Updated On: March 8th, 2017] [Originally Added On: March 8th, 2017]
- Prime Minister Trudeau, no fan of the middle class - Hill Times (subscription) [Last Updated On: March 8th, 2017] [Originally Added On: March 8th, 2017]
- Finally, Democrats Have A Pro Wrestler In Their Corner - Huffington Post [Last Updated On: March 9th, 2017] [Originally Added On: March 9th, 2017]
- WA election: Labor outlines campaign costings and debt reduction plan - ABC Online [Last Updated On: March 9th, 2017] [Originally Added On: March 9th, 2017]
- WA election: Death threats, One Nation legal action, stadium stoush campaign trail action - ABC Online [Last Updated On: March 9th, 2017] [Originally Added On: March 9th, 2017]
- Russia, Israeli firm agree to invest $100 mln in Russia's dairy industry - Reuters [Last Updated On: March 10th, 2017] [Originally Added On: March 10th, 2017]
- Maine deserves a chance to capitalize on the North Woods monument - Bangor Daily News [Last Updated On: March 10th, 2017] [Originally Added On: March 10th, 2017]
- MAN, RMRDC, others to promote resource-based MSMEs,funding - The Nation Newspaper [Last Updated On: March 10th, 2017] [Originally Added On: March 10th, 2017]
- Jobs, education focus of Gov. Brown's Prineville visit - KTVZ - KTVZ [Last Updated On: March 10th, 2017] [Originally Added On: March 10th, 2017]
- HIKE NETARTS BAYOCEAN SPIT - North Coast Citizen [Last Updated On: March 11th, 2017] [Originally Added On: March 11th, 2017]
- Jobs versus or for the environment? - Budgeeter News [Last Updated On: March 11th, 2017] [Originally Added On: March 11th, 2017]
- Canada Invests $325 Million in the Fish and Seafood Sector - Yahoo Finance [Last Updated On: March 11th, 2017] [Originally Added On: March 11th, 2017]
- We are taking steps to overhaul economy through knowledge-based ... - TheNewsGuru (satire) (press release) (blog) [Last Updated On: March 11th, 2017] [Originally Added On: March 11th, 2017]
- Canada Invests $325 Million in the Fish and Seafood Sector - Marketwired (press release) [Last Updated On: March 12th, 2017] [Originally Added On: March 12th, 2017]
- Saskatchewan gender, immigrant wage gaps among widest in Canada - Saskatoon StarPhoenix [Last Updated On: April 8th, 2017] [Originally Added On: April 8th, 2017]
- Week in Film: Endless LOLs, an Acid Western, and Great Advice ... - Bedford + Bowery [Last Updated On: April 8th, 2017] [Originally Added On: April 8th, 2017]
- Famous fish the focus of 'steelhead ecology' hike - Tillamook Headlight-Herald [Last Updated On: April 8th, 2017] [Originally Added On: April 8th, 2017]
- 'Explore Nature' sets Cape Lookout hike - Tillamook Headlight-Herald [Last Updated On: April 8th, 2017] [Originally Added On: April 8th, 2017]
- Califonria Lawmakers approve billion dollar gas tax | KBAK - Bakersfield Now [Last Updated On: April 8th, 2017] [Originally Added On: April 8th, 2017]
- Globe editorial: On pipelines, Ottawa must have the final say - The ... - The Globe and Mail [Last Updated On: June 6th, 2017] [Originally Added On: June 6th, 2017]
- Politics biggest determinant of economic future, says Page - Tbnewswatch.com [Last Updated On: June 6th, 2017] [Originally Added On: June 6th, 2017]
- Our Turn: Pass SB 129, save 900 New Hampshire jobs - Concord Monitor [Last Updated On: June 6th, 2017] [Originally Added On: June 6th, 2017]
- We'll Always Have Paris: Trump's Impact On The Climate Agreement - HuffPost [Last Updated On: June 6th, 2017] [Originally Added On: June 6th, 2017]
- A strategy that will make Canadian innovation flourish - The Globe and Mail [Last Updated On: June 6th, 2017] [Originally Added On: June 6th, 2017]
- Ocean Conference Side Events Highlight Cooperation on SDG 14 ... - IISD Reporting Services [Last Updated On: June 7th, 2017] [Originally Added On: June 7th, 2017]
- We must tap 'blue economy' for progress - Daily Nation [Last Updated On: June 8th, 2017] [Originally Added On: June 8th, 2017]
- Minnesota Power Proposes Next Step in EnergyForward Plan - POWER magazine [Last Updated On: June 9th, 2017] [Originally Added On: June 9th, 2017]