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Essay on the Role Played by Economics in the process of development

On the model of physics and mathematics, for more than a century now economics has been advanced and practiced as a science, though it wasn’t always so. Economics was viewed as a branch of moral philosophy astonishingly under-develop by earlier philosophers from Adam Smith’s Inquiry, into the nature and the causes of the Wealth of Nations in 1776, thus until it well after the publication of John Stuart Mill’s Principles of Political Economy in 1848. Yet it is true, that it seems hardly possible that before the time of Adam Smith no classic author, no Aristotle, not Aquinas, not Bacon nor Descartes that had been asked regarding the cause of the wealth of nations in any sustained and fruitful was.

Neither person nor property being safe from marauders, brigands, and feuding princes, but the problems of political order and the rule of law were of such importance, whether in Europe or in other places on the planet that the development of economics required the prior development of politics and law. Had it been successfully pursued in earlier, poorer centuries, such an inquiry may well have been of great social utility. As we all know that, economics is very important in our daily ways of living. Economics is the study of how people choose to use resources. These resources are the time, talent people have available, the land, equipment, buildings and other tools on hand, and the knowledge of how to combine them to create useful products and services. Economics also includes the study of labor, land, and investments, income, of money, and production and of taxes and government expenditures. Economics also addresses the collective behavior of business and industries, governments and countries, although the behavior of individuals is important, and the globe as a whole. Macroeconomics and Microeconomics are the two points of view that are essential in understanding most economic phenomena. Macroeconomics is considered aggregate outcomes, while microeconomics starts by thinking about how individuals make decisions. To improve well being, often people appear to use their resources. Well-being includes the satisfaction people gain from the products and services they choose to consume, from their time spent in leisure and with family and community as well as in jobs, and the security and services provided by effective governments.

How much time to devote to work, to school, and to leisure, are important choices involve, others are how many dollars to spend and how many to save, how to combine resources to produce goods and services, and how to vote and shape the level of taxes and the role of government. Why those ends are chosen lies outside the domain of economists. According to Gary Becker, economics define as the study of the allocation of scarce means to satisfy competing ends. Economics is the science of the means to be applied for the attainment of ends chosen, as Ludwig von Mises wrote.

Economics in the process of development

In the process of development, economics play an important role in this world, knowing and studying economics is needed because we as individuals and a society experience scarcity (of raw materials, of goods and services, of time, and so on) in relationship to our ever growing needs and wants. Economics go in hand in the process of growing in the development and to be in progress. Through economics it views and examines how we make choices. With this, essentially it provides a way of understanding on how to make best use of natural resources, machinery, and people’s work efforts. Between various goals and anticipate the outcomes of changes in governmental policies, economics helps us examine trade-offs, so as with company policies, or composition of the population, and so on. Economics is everywhere, almost all issues of public and private policy involve economics and so do your own individual choices.

Through economics, we understand the basic concepts of consumer economics, understands the traditional command and market economic systems, thus we also able to understand the types of business ownership and types of market structures, economics play the role in financial institutions in saving, investing, and borrowing. As mention above about the meaning of economics, in addition to that economics also describe as the study of humans behaving in response to having only limited resources to fulfill unlimited wants and needs. Economics has a great impact on decision-making, by making good decision, people have incentive to get ahead, and this is another aspect of basic economics the decision-making. Decision –making is very important in our daily life, every decision we make uses up money, time, or both. In the process of development, decision-making is one of the parts that have to be implemented and needed to obtain a good output. In decision-making the person may consider the opportunity cost, tradeoff and projected cost of that decision. Economics involves choices, decisions can be categorized namely; heroic, threshold, or incremental. In every aspect economics is present like in business, health sector, education, and in decision making. However, there is good news that economics can tell us the likely results of a sales tax. As a matter of fact, it is also as a scientific discipline. It provides extremely useful analytical tools.

By this, an individual, a group may have a framework for understanding human behavior in the areas of getting and spending money, by which it occupies the majority of most people’s waking hours. It deals with fundamental, often life-or-death issues. That is why economics is important. Through economics, we are able to know the status in our country. Economics is about giving solution in our daily problems in our means of livelihood. It does not only tackle about on how to get resources but as well as on doing some decisions. As a member in the family, and in the society, we can see the essence of economics in every aspect in our life, because we are making decision everyday. Thus provides a rich context in making decisions in business, professional, and financial life. As ocean is to fish, economics is to business. It is the environment in which business operates, because the better you know about this environment, the more that you will be functioning as an analyst, manager and a decision-maker. Economics, its challenge lies in its mysteries. Dealing with the process of development, the role of economics play a significant great value to human kind, in our economy, business, market and everywhere, with the supply and demand we have, thus economics get involve on its process. We don’t know if a federal tax will be limit will help the economy grow. We also don’t know when will be next expansion or recession will come. We don’t know how to overcome poverty, hunger, crime, and other evils rooted in economic reality, since economics most concerned with these matters, and thus it will equipped to help us deal with them. In the arena of human capital, the ultimate drama in economics is acted out. In the field of economics, in recent years, in fact, the most interesting developments have come with the new attention paid to moral factors in economic progress.

As I mention above regarding economics is a branch of science, but if economics were not only a science, but if it is also a way off looking at reality and hence a way of thinking. For future generations of thinkers, modern economics offers enormous resources, and the possibilities for a new synthesis are immense. Speaking with modern economics it is not a modern medicine, it taught in either discipline ought to be the promotion of health, be as the human or the socio-economic organism. To understand the social world, economics unified in its approach. It is a social science that is at once very broad in its subject matter. Economics helps us in our every day living because it also studies the behavior of social systems include markets, corporations, legislatures, and families. Institutions between goals directed individuals, as this is the outcome of interactions. With the help of our economist in which they are the one who monitor and knows the process of it, economist is making a policy recommendations that they believe will make people better off. As our economy today we are facing every challenges and trials, problems, decision-making as I said earlier that it had a great impact in the field of economics. With these, many people learn to make exchange, or barter, to invest in other country make common goods, supply the needs of the people in which they are also basing the immediate demands of the people. Through economics a certain location would be in progress and could be develop.

If a certain country had a good economy they may lead to well progress, and can be a developing country, if one country is not able to utilize the needs of the people, and their economy is not good, then it might lead to shrinking boat. It is because economics basically focused on understanding the prices, competitive markets, like in Hong Kong, China, US, they have a very competitive market, and the interactions between markets as example market from the other country then negotiate with the other country with their supplies like the cell phone. Economic growth, monopolies and antitrust, income inequality, are important topics and the business cycle continue to be central areas of inquiry in economics. The subject matter of economics, recently, though, has broadened, that why economist today remarkable address a variety of social science questions. Economics in the process of development, it doesn’t only give a helping hand to the country but as well as for the students, professionals because it provides a background in banking, law, professional work in business and even medicine. Many students like to study economics because it plays an important role in our economy. Maybe other people would wondering if business is economics, economics and business are related but economics is not business and business is professional training ultimately aimed at making profits, and thus economics is a science. Economics also is not a policy, it is just that since we are dealing on our economy and helping on it, there are ways in which we also to follow, policy considerations is true that often motivate economic analyses. With regards to economic development, it is define as a process of change in which it focused on the betterment of the community, state or nation.

Through economics people tend to learn and know how to budget their money, they able to make decision on their own and through it all, economics helps in building a prosperous society, because economics is the foundation of all. Economics in the process of development, speaking with economic development, it is also in the development of economic wealth, for the well being of their inhabitants. It is an effort that seeks in order to improve and well develop the quality of life. In economic development there are three models but there are also 3 building blocks we have first, the production function, saving function and labor supply function which is related to population growth. Three models are Harrod-Domar model focus on growth rate of gross domestic product, it also used in economic planning and exogenous growth model which focus on role of technological change.

To end it therefore I conclude that economics really play a great role in our economy, in the process of development, because through this people we able to determine the process on our economy, the prices, the supply and demands, the allocation of a certain state. Decision-making is essential in our everyday life as this enable us to be wise and knows to budget it. We keep on questioning on how the does it happens, the status and the process of out money, the goods as with this we knew through economics, as it is the study of labor, land, and investments, income, of money, and production and of taxes and government expenditures. People ask and keep on complaining, why did the price of oil goes up, unemployment and others, questioning how companies will be able to continue producing their products and etc, still economics is just revolving in our life. As with this economics really plays an important role, it plays a central role in our every life. All these questions were just revolving around economics, economics is all around us.


Hayek, Friedrich A. 1968. Individualism and the Economic Order.

Chicago: Henry Regnery Company.

Lutz, Mark A. 1999. Economics for the Common Good: Two Centuries of Social

Economic Thought in the Humanistic Tradition. Routledge. London.

Mankiw, N. Gregory. 1998. Principles of Economics. Fort Worth: The

Dryden Press.

Marshall, Alfred L. 1890. Principles of Economics: An Introductory volume.

London. Macmillan.

Sowell, Thomas. 2000. Basic Economics: A Citizen’s Guide to the Economy.

New York: Basic Books.


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