The two main branches of economics

Economics - as a science, methodology and subject - continues to occupy the top of the priorities that concern the world. The second half of the twentieth century witnessed a significant improvement in the standard of living in most parts of the world, especially in the richer countries, such as North America, Western Europe and East Asia. Open markets spread, and democracy and personal freedoms expanded to include many parts of the world. In the first half of the twentieth century, two world wars broke out, and the Great Depression occurred in 1929.
Over the past three decades, dramatic changes have taken place in economics and economic activity, especially in each of the economic visions and institutions. The socialist and totalitarian tendencies have declined in many countries of the world that have shifted from a planned economy system to a market economy system. Many countries in the world also witnessed great economic growth, such as China, Ireland, Spain, Botswana and the Philippines. No known historical period has ever enjoyed such an extended period of economic growth in some countries, as happened in the last half of the twentieth century, and the first and second decades of the twenty-first century.
We can distinguish between two main branches of economics:
The first branch - Microeconomics, which discusses and analyses the behaviour of individual institutions (individual consumers, families, companies, merchants, farmers), i.e., supply, demand and prices. The English economist Adam Smith is considered the founder of the science of microeconomics, this economic discipline that deals with the study of the behaviour of independent economic entities, such as markets, companies, and productive families.
Adam Smith, in his book: The Wealth of Nations (1776), studied the issue of prices and how to determine them, especially the prices of land, labour, and capital. He was also interested in highlighting the strengths and weaknesses of market mechanisms, and most importantly, he identified the most important characteristics of efficient markets, and he believed that the economic benefit is achieved as a result of individuals taking care of their own interests. The importance and value of these issues continues today. Although the study of microeconomics has witnessed tremendous development later on, many famous people, politicians and economists alike still quote Smith s sayings and theories.
The second branch - Macroeconomics, which focuses on the collective economy, such as the level of national income, the size of total employment, the flow of investments from one branch to another, economic development, the history of the development of the economic organization s activity for a long period of time, and its relationship to other activities and institutions.
This science came into existence in its modern form, at the hands of the English economist John Maynard Keynes in 1935 when he published his book: The General Theory of Employment, Interest, and Money. General Interest and Money, Theory of Employment When both England and the United States were at the time suffering under the weight of the Great Depression that loomed over the world throughout the thirties of the twentieth century. Unemployment affected more than a quarter of the American workforce at the time. Keynes developed his new theory based on the analysis of the factors underlying the economic cycle, and the unemployment and inflation surges. Macroeconomics has become concerned with the study of many areas, such as how investment and consumption levels are determined on the basis, how central banks manage the monetary system and interest rates, the causes of international financial crises, and the secrets behind economic recovery in some countries. states and recession in some others. Despite the amazing development achieved by macroeconomics since the first visions of Keynes came out to us, the issues he discussed still define aspects of the study of this branch of economics until the present time.
Thus, microeconomics and macroeconomics converge together to form the core of what is known as Modern Economics.
Microeconomic concepts such as supply and demand at the level of the economic unit, scarcity, efficiency, specialization, and the principle of comparative advantage will remain key and central concepts as long as the concept of scarcity remains. As well as the concepts of macroeconomics in relation to the concepts of aggregate supply and demand, and the role played by the national currency and the global monetary system. In addition to the widely accepted theory of economic growth, unemployment, inflation and the economic cycle, and the possibility of absorbing it and avoiding its drawbacks.
Prof. Dr Moustafa El-Abdallah Al Kafry
Faculty of Economics - Damascus University
search source: https://almustshar.sy/archives/9743

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