Relationship of Economics with Other Subjects

In this article we will discuss about the relationship of economics with other subjects.

Economics is classified as a social science. This view makes eco­nomics an academic relative of political science, sociology, psychology and anthropology. All of these disciplines study the behaviour of human beings individually and in groups.

They study different subsets of the actions and’ interactions o human beings. For this reason they also are sometimes termed behavioural sciences. We may now make a brief review of the relation between economics and other related disciplines such as psychology and sociology.

Economics and Psychology:

Economics is particularly concerned with consumption, production and resource use by individuals and groups. Economics is also concerned with the procures by which households and firms make decisions about the use of scarce resources.

Inevitably, this definition of the ‘territory’ of economics leads to some overlapping with the other disciplines. Psychologists and economists share an interest in what motivates people to take certain action.

However the primary interest of economists lies in those actions that are reflected in market activity or in economic decisions made through govern­ment.

Economics and Sociology:

While sociologists are interested in all facts of organised human activity, economists are interested mainly in organised activities that related o the production and consumption of goods and services. As a general rule economists assume that individuals pursue their self-interest and respond to various signals or incentives in the light of that self-interest.

Although this may seem obvious, it is somewhat different viewpoint on human behaviour from that of psychologists and sociologists. This perspective often leads economists to draw different conclusions.

Economics and Political Science:

Economics interacts with almost all other academic disciplines. It is inti­mately intertwined with current events, and it has a significant effect on political events, both domestic and international. Economics has various things common with political science. For example, in both subjects we teach public finance, financial relations between the centre of the study as also the economics of planning.

Economics and Decision Sciences:

Economics is also part of a group of disciplines called decision sciences which includes some branches of statistics, applied mathematics, opera­tional research, and some areas of management and engineering. All of these disciplines deal with how individuals and groups make decisions.

Econo­mists are specifically interested in those decisions relating to production consumption and resource use. As a decision science, economics is closely related to business and management courses.

Economics and Statistics:

One major function of an economist is to conduct research. The job of the company economist is to investigate economic aspects of various decisions Government agencies and private business firms generate a vast array of economic statistics on such matters as income, employment, prices and expenditure patterns. A two-way street exists between statistical data and economic theory.

Statistics can be used to test the consistency of economic theory and measure the responsiveness of economic variables to changes in policy. At the same time, economic theory helps to explain which economic variables are likely to be related and why they are linked. Statistics do not tell their own story.

We must utilise economic theory to properly interpret and better understand the actual statistical relationships among economic variables.