Branches of economics

Neo-classical Economics

Neo-classical economics is built on the classical economics of free markets adding ideas such as utility maximization, marginal analysis, and rational choice theory. This branch is concerned with how individuals make decisions to choose the best option, considering marginal costs and benefits. Neo-classical economics is deemed to be orthodox and is taught in most schools as the starting point in understanding economics. The different tools developed in this branch of economics, including supply and demand, utility maximization and rational choice are used when studying new branches of economics.

Keynesian Economics

Maynard Keynes developed this after the great depression of the 1930s. The existing economic theories failed to explain how economic depression persisted for so long. Keynes observed that markets sustained losses due to many factors including negative multiplier, the paradox of thrift and lack of confidence. To take care of all the losses during the depression, Keynes advocated that government intervenes and kick start the economy.

Keynes, in part, created macroeconomics as a distinct study with the view that the aggregate economy operates differently from individual markets. The rules that govern macroeconomics are, therefore, different and more diverse. Keynes agreed with the various elements developed in neo-classical economics but suggested that new ideas were needed.

Monetarist Economics

Monetarist economists came up as a reaction to the dominance of Keynesian economics. They suggested that the control of money supply would control inflation and this gave them popularity between the 1970s and 1980s at a time of significant inflation.

Austrian Economics

This school of economics is concerned with free markets and price controls. It places more weight on the impact of individual values and individual actions.

Marxist Economics

This school of thought, proposed by Karl Marx, observes that capitalism is unequal and unstable. It also opines that a radical economic approach is needed to answer economic questions. Marxist economics emphasizes that besides relying on free markets, government intervention is necessary.

Neo-Liberalism

Neo-liberalism seeks to interpret classical economics. This school of thought, therefore, looks at free markets, privatization, competition, and minimal government involvement. It builds on classical economics introducing new ideas.

Other Branches of Economics

• Behavioral Economics – It deals with the effects of psychological and emotional factors in economic decisions and microeconomics.
• Ecological Economics – Studies the interaction between the environment and the economy and ways to achieve sustainable development.
• Environmental economics – This is concerned with the development, distribution, and use of natural resources.
• Health economics – Mainly looks at public health and the health care sector in general.
• Information economics – This deal with the effects of information and information systems on an economy.
• International Economics – It entails the relations between countries in trade and investments and how it affects economies.
• Monetary economics – It primarily handles means of payment including fiat money, plastic money, e-money and much more.
• Urban economics – It's the application of economic tools in the study of cities and aspects in a town such as crime, housing, transport, and unemployment among others.

Each season, new branches of economics emerge as more fields are studied, and better technologies emerge. One such branch is econometrics, which is the use of mathematical and statistical methods to track and forecast the outcome of economic transactions. Others include developmental economics, which is concerned with poverty and underdevelopment in countries.

There are as many branches of economics as there are fields of study in economics. The areas studied are almost endless. The main ones, however, are macroeconomics and microeconomics.