Applied Economics

Economics as Social and Applied Science

REVISITING ECONOMICS

There are three strands in the development of the definition of economics. The first
focuses on wealth. The second stresses the decision-making process. The third
concentrates on the allocation process.

ECONOMICS AS A SOCIAL SCIENCE

Economics is primarily a social science. As a science it uses scientific method of

inquiry. This systematic or scientific method is being used in the study of society
and its components. Thus, social science can be described as the study of the various
modes and aspects of human interactions in a group as these people aspire to
preserve their group as a social unit, to make it stable, and to promote its growth,
expansion, and development.

As a social science, economics pertains to the study on how society creates its
material wealth, how it makes this wealth available to its people with minimum
difficulties, and how it expands its wealth.

ECONOMICS AS AN APPLIED SCIENCE

What makes economics an applied science is the formulation of general theories

through testing, mainly using data from the past. In simpler definition, it is the study
of observing how theories work in practice.

Applied economics becomes a powerful tool to reveal the true and complete
situation in order to come up with things to do.

The use of applied economics is designed to analytically review potential outcomes

without the "noise" associated with explanations that are not backed by numbers.
Because economics relies on the interpretation of historical events in its theories,
applied economics can lead to "to do" lists for steps that can be taken to ensure
stability in real world.
Applied Economics

Economic Theory

Consumerism

Keynesianism

Liberalism

Malthusianism

Monetarism
Applied Economics

DIFFERENCE BETWEEN SOCIAL AND APPLIED SCIENCE