View source for Economy

{{short description|Area of production, distribution, trade of, and consumption of goods and services}}
{{About|the word in goods and services meaning}}
{{pp-semi-indef}}
{{Use mdy dates|date=August 2016}}[[File:Countries by GDP (PPP) per capita in 2020.png|thumb|right|400px|[[Gross domestic product]] per capita of countries (2020) ([[Purchasing power parity]] – [[international dollars]])
<br />{{hlist|{{legend inline|#4b0049|>50,000}}|{{legend inline|#680063|35,000–50,000}}|{{legend inline|#814991|20,000–35,000}}|{{legend inline|#8c6bb1|10,000–20,000}}|{{legend inline|#8c96c6|5,000–10,000}}|{{legend inline|#9ebcda|2,000–5,000}}|{{legend inline|#bfd3e6|<2,000}}|{{legend inline|#999999|Data unavailable}}}}]]

{{Economics sidebar}}An '''economy'''{{Efn|also spelled '''oeconomy''' or, with a ligature, '''œconomy''' in British English, both are pronounced {{IPAc-en|iː|ˈ|k|ɒ|n|ə|m|i}}. The term is ultimately derived from [[Greek language|Greek]] {{wikt-lang|grc|οἰκονομία}}, from {{wikt-lang|grc|οἶκος}}, "house", and {{wikt-lang|grc|νέμω}}, "to manage". In contemporary times, however, the spelling that begins with ''œ'' has become obsolete and rarely used, since it has been [[American and British English spelling differences#ae and oe|reduced to ''e'' in American English or separated as ''oe'' in British English]]. From the eighteenth century, the spelling ''oeconomy'' dropped the letter ''o'', thus making ''economy'' the common spelling for the term.<ref>{{Cite book |title=A Philosopher's Economist: Hume and the Rise of Capitalism |last=Schabas |first=Magaret |publisher=University of Chicago Press |year=2023 |isbn=978-0-226-82402-4 |pages=17 |url=https://books.google.com/books?id=FdSUEAAAQBAJ&pg=PA17 |last2=Wennerlind |first2=Carl}}</ref><ref>{{Cite book |title=Spellbound: The Surprising Origins and Astonishing Secrets of English Spelling |last=Essinger |first=James |publisher=Random House Publishing Group |year=2007 |isbn=978-0-440-33693-8 |pages=250 |url=https://books.google.com/books?id=0BeHcTJhnmEC&pg=PA250}}</ref>}} is an area of the [[Production (economics)|production]], [[Distribution (economics)|distribution]] and [[trade]], as well as [[Consumption (economics)|consumption]] of [[Goods (economics)|goods]] and [[Service (economics)|services]]. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the production, use, and management of [[scarcity|scarce resources]].<ref>{{Cite book |last1=James |first1=Paul |author-link=Paul James (academic) |last2=with Magee |first2=Liam |last3=Scerri |first3=Andy |last4=Steger |first4=Manfred B. |title=Urban Sustainability in Theory and Practice: Circles of Sustainability |url=https://www.academia.edu/9294719 |year=2015 |publisher=[[Routledge]] |location=London |page=53 |isbn=978-1315765747 |access-date=January 29, 2018 |archive-date=March 1, 2020 |archive-url=https://web.archive.org/web/20200301210732/https://www.academia.edu/9294719 |url-status=live}}</ref> A given economy is a set of processes that involves its [[culture]], [[values]], education, technological evolution, history, [[social organization]], [[political structure]], [[legal systems]], and [[natural resource]]s 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 interrelated human practices and transactions that does not stand alone.

Economic agents can be individuals, [[business]]es, [[organization]]s, or [[government]]s. Economic transactions occur when two groups or parties agree to the value or price of the transacted good or service, commonly expressed in a certain [[currency]]. However, 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]], [[innovation]] (new products, services, processes, expanding markets, diversification of markets, niche markets, increases revenue functions) and changes in [[industrial relations]] (most notably [[Child labour|child labor]] being replaced in some parts of the world with [[universal access to education]]).

== Etymology ==
[[File:Lower Manhattan skyline - June 2017.jpg|thumb|[[New York City]], the world's principal [[financial center]]<ref>{{cite news |url=https://themessenger.com/business/sorry-london-new-york-is-still-the-financial-capital-of-the-world#|archive-url=https://web.archive.org/web/20231011211612/https://themessenger.com/business/sorry-london-new-york-is-still-the-financial-capital-of-the-world|url-status=dead|archive-date=October 11, 2023|title=Sorry, London — New York Is Still the Financial Capital of the World|author=Laura Bratton|publisher=The Messenger|date=September 28, 2023|access-date=October 1, 2023|quote=The GDP of the New York City metropolitan area is larger than the country of South Korea...New York City was ranked as the most competitive city in the financial industry for the fifth straight year.}}</ref> and the epicenter of the [[list of cities by GDP|world's principal metropolitan economy]]<ref name=NYCEpicenterUSMetroEconomy>{{cite web|url=https://www.weforum.org/agenda/2020/09/united-states-america-economic-output-new-york-la/|title=This 3D map shows the U.S. cities with the highest economic output|author=Iman Ghosh|publisher=World Economic Forum|date=September 24, 2020|access-date=March 5, 2023|quote=The New York metro area dwarfs all other cities for economic output by a large margin.}}</ref>]]
The word ''economy'' in English is derived from the [[Middle French]]'s {{lang|frm|yconomie}}, which itself derived from the [[Medieval Latin]]'s {{lang|la|[[wikt:oeconomia|oeconomia]]}}. The Latin word has its origin at the [[Ancient Greek]]'s {{lang|grc-latn|oikonomia}} or {{lang|grc-latn|oikonomos}}. The word's first part {{lang|grc-latn|oikos}} means "house", and the second part {{lang|grc-latn|nemein}} means "to manage".<ref name=":0">{{Cite web |title=economy |url=https://www.merriam-webster.com/dictionary/economy |access-date=2022-07-27 |website=[[Merriam-Webster]] |language= |archive-date=April 26, 2022 |archive-url=https://web.archive.org/web/20220426120713/https://www.merriam-webster.com/dictionary/economy |url-status=live}}</ref>

The most frequently used current sense, denoting "the economic system of a country or an area", seems not to have developed until the 1650s.<ref>[http://dictionary.reference.com/browse/economy Dictionary.com] {{Webarchive|url=https://web.archive.org/web/20160304055308/http://dictionary.reference.com/browse/economy |date=March 4, 2016 }} , "economy." The American Heritage Dictionary of the English Language, Fourth Edition. [[Houghton Mifflin]] Company, 2004. October 24, 2009.</ref>

== History ==
{{Main|Economic history}}

=== Earliest roots ===
[[File:BosraMosaicCamels.png|alt=see caption|thumb|Ancient Roman mosaic from [[Bosra]], depicting a merchant leading camels through the desert]]
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.<ref name=Sheila>Sheila C. Dow (2005), "Axioms and Babylonian thought: a reply", ''Journal of Post Keynesian Economics'' '''27''' (3), p. 385-391.</ref>

The Babylonians and their city state neighbors developed forms of economics comparable to currently used civil society (law) concepts. They developed the first known codified legal and administrative systems, complete with courts, jails, and government records.<ref name="yale2">{{cite web |first=Charles F. |last=Horne |year=1915 |title=The Code of Hammurabi : Introduction |url=http://www.yale.edu/lawweb/avalon/medieval/hammint.htm |url-status=live |archive-url=https://web.archive.org/web/20070908205713/http://www.yale.edu/lawweb/avalon/medieval/hammint.htm |archive-date=September 8, 2007 |access-date=September 14, 2007 |publisher=[[Yale University]]}}</ref>

The ancient economy was based primarily on [[subsistence farming]].<ref>{{Cite journal |last1=Aragón |first1=Fernando M. |last2=Oteiza |first2=Francisco |last3=Rud |first3=Juan Pablo |date=2021-02-01 |title=Climate Change and Agriculture: Subsistence Farmers' Response to Extreme Heat |url=https://pubs.aeaweb.org/doi/10.1257/pol.20190316 |journal=American Economic Journal: Economic Policy |language=en |volume=13 |issue=1 |pages=1–35 |doi=10.1257/pol.20190316 |arxiv=1902.09204 |s2cid=85529687 |issn=1945-7731 |access-date=July 30, 2022 |archive-date=July 30, 2022 |archive-url=https://web.archive.org/web/20220730110254/https://www.aeaweb.org/articles?id=10.1257/pol.20190316 |url-status=live}}</ref> The [[Shekel]] are the first to refer to a unit of weight and currency, used by the [[Semitic peoples]]. 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 (mathematics)|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.<ref name="brony">{{citation |last=Bronson |first=Bennet |title=Bulletin |date=November 1976 |url=https://archive.org/stream/fieldmuseumofnat47chica#page/n193/mode/2up |volume=47 |issue=10 |pages=3–15 |contribution=Cash, Cannon, and Cowrie Shells: The Nonmodern Moneys of the World |location=Chicago |publisher=Field Museum of Natural History}}.</ref>

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,<ref name=":0" /> many people were [[bond slaves]] of the [[Freeholder (government)|freeholders]].<ref>{{cite book |first=G.E.M. |last=de Ste. Croix |title=The Class Struggle in the Ancient Greek World |publisher=[[Cornell University Press]] |date=1981 |pages=136–137}}, noting that economic historian [[Moses Finley]] maintained "serf" was an incorrect term to apply to the social structures of classical antiquity.</ref> The economic discussion was driven by [[scarcity]].{{Citation needed|date=July 2022}}

In Chinese economic law, the huge cycle of [[Institution|institutional innovation]] contains an idea. Serving a non-market economy promotes a firm's tenure that is legally guaranteed and protected from bureaucratic opportunities.<ref>{{Cite journal |last1=Jabbour |first1=Elias |last2=Dantas |first2=Alexis |last3=José Espíndola |first3=Carlos |date=2022-10-20 |title=On The Chinese Socialist Market Economy And The "New Projectment Economy" |journal=World Review of Political Economy |volume=13 |issue=4 |doi=10.13169/worlrevipoliecon.13.4.0502 |s2cid=253213008 |issn=2042-8928|doi-access=free }}</ref>

=== Middle Ages ===
In the Middle Ages, what is now known as an economy was not far from the subsistence level. Most exchange occurred within [[social groups]]. On top of this, the great conquerors raised what we now call [[venture capital]] (from ''ventura'', ital.; ''risk'') to finance their captures. The [[Capital (economics)|capital]] should be refunded by the goods they would bring up in the [[New World]]. The discoveries of [[Marco Polo]] (1254–1324), [[Christopher Columbus]] (1451–1506) and [[Vasco da Gama]] (1469–1524) led to a first [[globalization|global]] economy. The first [[Company|enterprises]] were trading establishments. In 1513, the first [[stock exchange]] was founded in [[Antwerp]]. Economy at the time meant primarily [[trade]].

The European captures became branches of the [[Europe]]an states, the so-called [[colonies]]. The rising [[nation-state]]s [[Spain]], [[Portugal]], [[France]], [[Great Britain]] and the [[Netherlands]] tried to control the trade through [[custom duties]] and [[mercantilism]] (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]] (1773–1855) 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.

=== Industrial Revolution ===
The first [[economist]] in the true modern meaning of the word was the Scotsman [[Adam Smith]] (1723–1790) who was inspired partly by the ideas of [[physiocracy]], a reaction to mercantilism and also later Economics student, Adam Mari.<ref>{{cite book |url=https://www.scribd.com/doc/150712162/Physiocracy |title=An Encyclopedia of the Early Modern World- preview entry: Physiocrats & physiocracy |publisher=Charles Scribner & Sons |first=François |last=Quesnay |access-date=February 24, 2014 |archive-date=March 8, 2021 |archive-url=https://web.archive.org/web/20210308150740/https://www.scribd.com/presentation/150712162/Physiocracy |url-status=live}}</ref> He defined the elements of a national economy: [[Product (business)|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]] (1766–1834) transferred the idea of supply and demand to the problem of [[Human overpopulation|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.<ref>{{cite web |title=Industrial History of European Countries |url=https://www.erih.net/how-it-started/industrial-history-of-european-countries |access-date=2 June 2021 |website=European Route of Industrial Heritage |publisher=[[Council of Europe]] |archive-date=June 23, 2021 |archive-url=https://web.archive.org/web/20210623201807/https://www.erih.net/how-it-started/industrial-history-of-european-countries |url-status=live}}</ref> 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 (economics)|Production]], production and [[division of labor]] enabled the [[mass production]] of [[Good (economics)|goods]].

=== 20th century ===
The contemporary concept of "the economy" wasn't popularly known until the American [[Great Depression]] in the 1930s.<ref name="invention">{{cite news |last1=Goldstein |first1=Jacob |title=The Invention Of 'The Economy' |url=https://www.npr.org/sections/money/2014/02/28/283477546/the-invention-of-the-economy |access-date=6 April 2017 |work=[[NPR]] - Planet Money |date=28 February 2014 |archive-date=May 5, 2018 |archive-url=https://web.archive.org/web/20180505202459/https://www.npr.org/sections/money/2014/02/28/283477546/the-invention-of-the-economy |url-status=live}}</ref>

After the chaos of two [[World War]]s and the devastating Great Depression, policymakers searched for new ways of controlling the course of the economy.{{Citation needed|date=July 2022}} This was explored and discussed by [[Friedrich August von Hayek]] (1899–1992) and [[Milton Friedman]] (1912–2006) who pleaded for a global [[free trade]] and are supposed to be the fathers of the so-called [[neoliberalism]].<ref name="Boas20092">{{cite journal |first1=Taylor C. |last1=Boas |first2=Jordan |last2=Gans-Morse |date=June 2009 |title=Neoliberalism: From New Liberal Philosophy to Anti-Liberal Slogan |journal=Studies in Comparative International Development |volume=44 |issue=2 |pages=137–61 |doi=10.1007/s12116-009-9040-5 |doi-access=free}}</ref><ref>{{cite book |url=https://www.routledge.com/The-Handbook-of-Neoliberalism/Springer-Birch-MacLeavy/p/book/9781138844001 |title=The Handbook of Neoliberalism |date=2016 |publisher=[[Routledge]] |isbn=978-1138844001 |editor1-last=Springer |editor1-first=Simon |page=[https://books.google.com/books?id=M5qkDAAAQBAJ&pg=PA3 3] |editor2-last=Birch |editor2-first=Kean |editor3-last=MacLeavy |editor3-first=Julie |access-date=July 30, 2022 |archive-date=October 20, 2020 |archive-url=https://web.archive.org/web/20201020154754/https://www.routledge.com/The-Handbook-of-Neoliberalism/Springer-Birch-MacLeavy/p/book/9781138844001 |url-status=live}}</ref> However, the prevailing view was that held by [[John Maynard Keynes]] (1883–1946), who argued for a stronger control of the [[market (economics)|market]]s 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.<ref>{{cite web |title=What Is Keynesian Economics? – Back to Basics – Finance & Development, September 2014 |url=http://www.imf.org/external/pubs/ft/fandd/2014/09/basics.htm |url-status=live |archive-url=https://web.archive.org/web/20151025174816/http://www.imf.org/external/pubs/ft/fandd/2014/09/basics.htm |archive-date=25 October 2015 |access-date=2 November 2015 |website=[[International Monetary Fund]]}}</ref> In the late 1950s, the economic growth in America and Europe—often called {{lang|de|[[Wirtschaftswunder]]}} (German for ''economic miracle'') —brought up a new form of economy: [[mass consumption economy]]. In 1958, [[John Kenneth Galbraith]] (1908–2006) was the first to speak of an [[affluent society]] in his book ''[[The Affluent Society]]''.{{Citation needed|date=July 2022}} In most of the countries the economic system is called a [[social market economy]].<ref>{{cite book |last1=Koppstein |first1=Jeffrey |title=Comparative Politics: Interests, Identities, And Institutions In A Changing Global Order |url=https://archive.org/details/comparativepolit0000unse_t7g3 |page=156 |year=2005 |publisher=[[Cambridge University Press]] |isbn=0521603951 |last2=Lichbach |first2=Mark Irving |url-access=registration}}</ref>

=== 21st century ===
[[File:Frankfurt Stock Exchange (Ank Kumar) 02.jpg|alt=see caption|thumb|[[Frankfurt Stock Exchange]] in 2015]]
With [[revolutions of 1989|the fall of the Iron Curtain]] and the transition of the countries of the Eastern Bloc 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 instead of industrialization. Some attribute the first use of this term to Daniel Bell's 1973 book, ''The Coming of Post-Industrial Society'', while others attribute it 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 [[e-commerce]] 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 2000s, the new type of economies and economic expansions of countries like [[Chinese Century|China]], [[Brazil as an emerging superpower|Brazil]], and [[India as a potential superpower|India]] bring attention and interest to different from the usually dominating Western type economies and economic models.

== Elements ==

=== Types ===
A [[market economy]] is one where [[good (economics)|goods]] and [[service (economics)|services]] are produced and exchanged according to [[demand]] and [[supply (economics)|supply]] between participants (economic agents) by [[barter]] or a [[medium of exchange]] with a [[credit (finance)|credit]] or [[debit]] [[value (economics)|value]] accepted within the network, such as a unit of currency.<ref>{{cite book |last1=Gregory |first1=Paul |title=Comparing Economic Systems in the Twenty-First Century |last2=Stuart |first2=Robert |publisher=[[Houghton Mifflin]] |year=2004 |isbn=978-0618261819 |editor-last=Stuart |editor-first=Robert C. |edition=7th |page=538 |oclc=53446988 |quote=Market Economy: Economy in which fundamentals of supply and demand provide signals regarding resource utilization.}}</ref> A [[planned economy]] is one where political agents directly control what is produced and how it is sold and distributed.<ref>{{cite encyclopedia |last=Nove |first=Alec |author-link=Alec Nove |date=1987 |title=Planned Economy |dictionary=[[The New Palgrave: A Dictionary of Economics]] |volume=3 |page=879}}</ref> A [[green economy]] is [[low-carbon]] and resource efficient. In a green economy, growth in income and employment is driven by public and private investments that reduce carbon emissions and pollution, enhance [[energy efficiency (physics)|energy]] and [[resource efficiency]], and prevent the [[Biodiversity loss|loss of biodiversity]] and [[ecosystem services]].<ref>{{cite book |editor-link1=Lynn R. Kahle |editor-last1=Kahle |editor-first1=Lynn R. |editor-first2=Eda |editor-last2=Gurel-Atay |title=Communicating Sustainability for the Green Economy |publisher=M.E. Sharpe |year=2014 |isbn=978-0765636805 |location=New York}}</ref> A [[gig economy]] is one in which short-term jobs are assigned or chosen on-demand. The [[global economy]] refers to humanity's [[Economic system|economic system or systems]] overall.{{Citation needed|date=July 2022}} An [[informal economy]] is neither taxed nor monitored by any form of government.<ref>{{Cite news |date=17 June 2004 |title=In the shadows |newspaper=The Economist |url=https://www.economist.com/finance-and-economics/2004/06/17/in-the-shadows |access-date=2022-07-30 |issn= |archive-date=July 31, 2021 |archive-url=https://web.archive.org/web/20210731212913/https://www.economist.com/finance-and-economics/2004/06/17/in-the-shadows |url-status=live }}</ref>

=== Sectors ===
The economy may be considered as having developed through the following phases or degrees of precedence:{{According to whom|date=January 2021}}
* The [[Ancient history|ancient economy]] was mainly based on [[subsistence economy|subsistence]] farming.
* The [[industrial revolution]] phase lessened the role of subsistence farming, converting it to more [[extensive farming|extensive]] and [[monoculture|mono-cultural]] forms of agriculture in the last three centuries. The economic growth took place mostly in mining, construction and manufacturing industries. [[Commerce]] became more significant due to the need for improved exchange and distribution of produce throughout the community.
* In the economies of modern [[consumer society|consumer societies]] phase there is a growing part played by [[Service (economics)|services]], [[finance]], and [[technology]]—the [[knowledge economy]].
In modern economies, these phase precedences are somewhat differently expressed by the [[three-sector model]]:<ref>{{Cite book |last=Kjeldsen-Kragh |first=Søren |title=The Role of Agriculture in Economic Development: The Lessons of History |date=2007 |publisher=Copenhagen Business School Press DK |isbn=978-8763001946 |page=73}}</ref>
* [[Primary sector of the economy|Primary]]: Involves the extraction and production of [[raw materials]], such as [[grain|corn]], [[coal]], [[wood]] and [[iron]].
* [[Secondary sector of the economy|Secondary]]: Involves the transformation of raw or intermediate materials into goods e.g. manufacturing steel into [[cars]], or [[textiles]] into clothing.
* [[Tertiary sector of the economy|Tertiary]]: Involves the provision of services to consumers and businesses, such as [[baby-sitting]], [[film|cinema]] and [[banking]].

Other sectors of the developed community include:
* the [[public sector]] or state sector (which usually includes: parliament, law-courts and government centers, various emergency services, public health, shelters for impoverished and threatened people, transport facilities, air/sea ports, post-natal care, hospitals, schools, libraries, museums, preserved historical buildings, parks/gardens, nature-reserves, some universities, national sports grounds/stadiums, national arts/concert-halls or theaters and centers for various religions).
* the [[private sector]] or privately run businesses.
* the [[voluntary sector]] or social sector.<ref>{{Cite book |last=Potůček |first=Martin |url= |title=Not Only the Market: The Role of the Market, Government, and the Civic Sector |date=1999 |publisher=Central European University Press |isbn=0585316759 |location=New York |page=34 |oclc=45729878}}</ref>

=== Indicators ===
{{Main|Economic indicator}}
The [[gross domestic product]] (GDP) of a country is a measure of the size of its economy, or more specifically, monetary measure of the market value of all the [[final good]]s and services produced.<ref>{{Cite web |title=Gross Domestic Product {{!}} U.S. Bureau of Economic Analysis (BEA) |url=https://www.bea.gov/data/gdp/gross-domestic-product |access-date=23 February 2019 |website=www.bea.gov |archive-date=December 13, 2021 |archive-url=https://web.archive.org/web/20211213010751/https://www.bea.gov/data/gdp/gross-domestic-product |url-status=live }}</ref> 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.{{Citation needed|date=July 2022}}

Due to the growing importance of the financial sector in modern times,<ref>The volume of financial transactions in the 2008 global economy was 73.5 times higher than nominal world GDP, while, in 1990, this ratio amounted to "only" 15.3 ([http://www.wifo.ac.at/wwa/servlet/wwa.upload.DownloadServlet/bdoc/WP_2009_344$.PDF "A General Financial Transaction Tax: A Short Cut of the Pros, the Cons and a Proposal"] {{Webarchive|url=https://web.archive.org/web/20120402082819/http://www.wifo.ac.at/wwa/servlet/wwa.upload.DownloadServlet/bdoc/WP_2009_344$.PDF |date=April 2, 2012 }} , Austrian Institute for Economic Research, 2009)</ref> the term ''real economy'' is used by analysts<ref>{{cite web |url=https://blogs.wsj.com/marketbeat/2009/07/23/meanwhile-in-the-real-economy/ |title=Meanwhile, in the Real Economy |archive-url=https://web.archive.org/web/20210225115051/https://www.wsj.com/articles/BL-MB-10020 |archive-date=February 25, 2021 |work=[[The Wall Street Journal]] |date=July 23, 2009}}</ref><ref>{{cite web |url=https://blogs.wsj.com/economics/2011/10/24/boes-haldane-bank-regulation-should-serve-real-economy/ |title=Bank Regulation Should Serve Real Economy |archive-url=https://web.archive.org/web/20210307033555/https://blogs.wsj.com/economics/2011/10/24/boes-haldane-bank-regulation-should-serve-real-economy/ |archive-date=March 7, 2021 |work=[[The Wall Street Journal]] |date=October 24, 2011}}</ref> as well as politicians<ref>[https://blogs.wsj.com/washwire/2011/08/15/perry-and-romney-trade-swipes-over-real-economy/ "Perry and Romney Trade Swipes Over 'Real Economy'"] {{Webarchive|url=https://web.archive.org/web/20170709210456/https://blogs.wsj.com/washwire/2011/08/15/perry-and-romney-trade-swipes-over-real-economy/ |date=July 9, 2017 }} , ''The Wall Street Journal'', August 15, 2011</ref> to denote the part of the economy that is concerned with the actual production of goods and services,<ref>[http://lexicon.ft.com/Term?term=real-economy "Real Economy"] {{Webarchive|url=https://web.archive.org/web/20180209140508/http://lexicon.ft.com/Term?term=real-economy|date=February 9, 2018}} definition in the ''Financial Times'' Lexicon</ref> as ostensibly contrasted with the ''paper economy'', or the financial side of the economy,<ref>[http://glossary.econguru.com/economic-term/real+economy "Real economy"] {{Webarchive|url=https://web.archive.org/web/20111124021333/http://glossary.econguru.com/economic-term/real%20economy|date=November 24, 2011}} definition in the Economic Glossary</ref> which is concerned with buying and selling on the financial markets. Alternate and long-standing terminology distinguishes measures of an economy expressed in [[Real versus nominal value (economics)|real]] values (adjusted for [[inflation]]), such as [[real GDP]], or in [[Real versus nominal value (economics)|nominal]] values (unadjusted for inflation).<ref>• Deardorff's Glossary of International Economics, search for ''[http://www-personal.umich.edu/~alandear/glossary/r.html#real real] {{Webarchive|url=https://web.archive.org/web/20220119133710/http://www-personal.umich.edu/~alandear/glossary/r.html#real|date=January 19, 2022}}''</ref><ref>{{cite encyclopedia |first=R. |last=O'Donnell |date=1987 |title=Real and nominal quantities |dictionary=[[The New Palgrave: A Dictionary of Economics]] |volume=4 |pages=97–98}}</ref>

== Studies ==
{{Main|Economics}}
The study of economics are roughly divided into [[macroeconomics]] and [[microeconomics]].<ref>{{cite book |last1=Varian |first1=Hal R. |title=The New Palgrave Dictionary of Economics |year=1987 |isbn=978-1349951215 |pages=1–5 |chapter=Microeconomics |publisher=[[Palgrave Macmillan]] |doi=10.1057/978-1-349-95121-5_1212-1}}</ref> Today, the range of fields of study examining the economy revolves around the [[social science]] of economics,<ref>{{cite book |last1=Krugman |first1=Paul |title=Economics |last2=Wells |first2=Robin |date=2012 |publisher=Worth Publishers |isbn=978-1464128738 |edition=3rd |page=2 |author-link=Paul Krugman}}</ref><ref>{{Cite book |last=Backhouse |first=Roger |url=https://www.worldcat.org/oclc/59475581 |title=The Penguin history of economics |date=2002 |isbn=0140260420 |location=London |publisher=[[Penguin Books]] |oclc=59475581 |quote=The boundaries of what constitutes economics are further blurred by the fact that economic issues are analysed not only by 'economists' but also by historians, geographers, ecologists, management scientists, and engineers. |access-date=July 30, 2022 |archive-date=July 30, 2022 |archive-url=https://web.archive.org/web/20220730110254/https://www.worldcat.org/title/penguin-history-of-economics/oclc/59475581 |url-status=live}}</ref> but may also include [[economic sociology|sociology]],<ref name="press.princeton.edu">{{cite book |last=Swedberg |first=Richard |title=Principles of Economic Sociology |publisher=[[Princeton University Press]] |year=2003 |isbn=978-1400829378 |pages=1–31 |chapter=The Classics in Economic Sociology |chapter-url=http://assets.press.princeton.edu/chapters/s7525.pdf |access-date=July 30, 2022 |archive-date=May 20, 2022 |archive-url=https://web.archive.org/web/20220520225128/http://assets.press.princeton.edu/chapters/s7525.pdf |url-status=live}}</ref> [[economic history|history]],<ref>{{cite book |last1=Blum |first1=Matthias |title=Introduction, or Why We Started This Project |date=2018 |work=An Economist's Guide to Economic History |pages=1–10 |editor-last=Blum |editor-first=Matthias |series=Palgrave Studies in Economic History |publisher=Springer International Publishing |language=en |doi=10.1007/978-3-319-96568-0_1 |isbn=978-3319965680 |last2=Colvin |first2=Christopher L. |editor2-last=Colvin |editor2-first=Christopher L.}}</ref> [[economic anthropology|anthropology]],<ref>{{Cite book |last=Chibnik |first=Michael |url= |title=Anthropology, Economics, and Choice |date=2011 |publisher=[[University of Texas Press]] |isbn=978-0292735354|location=Austin |oclc=773036705}}</ref> and [[economic geography|geography]].<ref>{{Cite book |last1=Clark |first1=Gordon L. |url=https://books.google.com/books?id=TzZ_oByXYhkC&q=%22Economic+geography%22 |title=The Oxford Handbook of Economic Geography |last2=Feldman |first2=Maryann P. |last3=Gertler |first3=Meric S. |last4=Williams |first4=Kate |date=2003-07-10 |publisher=[[Oxford University Press]] |isbn=978-0199250837 |language=en |access-date=July 30, 2022 |archive-date=August 1, 2020 |archive-url=https://web.archive.org/web/20200801071839/https://books.google.com/books?id=TzZ_oByXYhkC&printsec=frontcover&dq=%22Economic+geography%22&source=bl&ots=x1w8qTXGfi&sig=DTOZmshfo7muaRIt3ifaAT8Fj5E&hl=en&ei=MEWeS9f5JYP68Aa5g4S7Cg&sa=X&oi=book_result&ct=result&resnum=4&ved=0CB0Q6AEwAw |url-status=live |via=[[Google Books]]}}</ref> Practical fields directly related to the human activities involving [[Production (economics)|production]], [[distribution (economics)|distribution]], [[Trade|exchange]], and [[consumption (economics)|consumption]] of [[goods and services]] as a whole are [[Business economics|business]],<ref>{{Cite book |last=Dielman |first=Terry E. |title=Applied regression analysis for business and economics |date=2001 |publisher=Duxbury/Thomson Learning |isbn=0534379559 |oclc=44118027}}</ref> [[Engineering economics|engineering]],<ref name="Dharmaraj2010">{{Cite book |last=Dharmaraj |first=E. |title=Engineering Economics |date=2010 |publisher=Himalaya Publishing House |isbn=978-9350432471 |location=Mumbai |oclc=1058341272}} <!-- original citation mismatched publisher and year for 1st and 2nd(rev.) editions, so confirmation needed which is being cited --></ref> [[Economic policy|government]],<ref>{{Cite book |last=King |first=David |title=Fiscal Tiers: the economics of multi-level government |date=2018 |publisher=[[Routledge]] |isbn=978-1138648135 |oclc=1020440881}}</ref> and [[Health economics|health care]].<ref>{{Cite journal |last=Tarricone |first=Rosanna |date=2006 |title=Cost-of-illness analysis |journal=Health Policy |language=en |volume=77 |issue=1 |pages=51–63 |doi=10.1016/j.healthpol.2005.07.016 |pmid=16139925}}</ref> Macroeconomics is studied at the regional and national levels, and common analyses include income and production, money, prices, employment, international trade, and other issues.<ref>{{cite book |chapter=Jordan, the Geographic and Economic Potential |date=2014-10-30 |chapter-url=http://dx.doi.org/10.4324/9781315745169-14 |title=The Economic Development of Jordan (RLE Economy of Middle East) |pages=84–114 |access-date=2023-05-01 |publisher=[[Routledge]] |doi=10.4324/9781315745169-14 |isbn=978-1315745169}}</ref>

== See also ==
* [[Economic democracy]]
* [[Economic history]]
* [[Economic system]]
* [[Social economy]]
* [[Solidarity economy]]

== Notes ==
{{Notelist}}

== References ==
{{Reflist}}

== Further reading ==
* Friedman, Milton, ''[[Capitalism and Freedom]]'', 1962.
* Rothbard, Murray, ''[[Man, Economy, and State: A Treatise on Economic Principles]]'', 1962.
* Galbraith, John Kenneth, ''[[The Affluent Society]]'', 1958.
* Mises, Ludwig von, ''[[Human Action: A Treatise on Economics]]'', 1949.
* Keynes, John Maynard, ''[[The General Theory of Employment, Interest and Money]]'', 1936.
* Marx, Karl, ''[[Das Kapital]]'', 1867.
* Smith, Adam, ''[[An Inquiry Into the Nature and Causes of the Wealth of Nations|An Inquiry into the Nature and Causes of the Wealth of Nations]]'', 1776.

{{Subject bar|portal1=Economics|auto=yes}}
{{Authority control}}

[[Category:Economy| ]]
[[Category:Main topic articles]]