Economics

TOBB ETÜ Economics Publications

Macroeconomics is the main branch of economics that analyzes the economy as a whole. It focuses on aggregate economic activities within a country or region, covering topics such as economic growth, unemployment, inflation, and total industrial production. Economists and policymakers from public institutions, international organizations, banks, financial institutions, and major corporations utilize macroeconomic models to analyze various trends and dynamics related to the economy.

Microeconomics is the main branch of economics that studies the decision-making behavior of individual economic agents, such as consumers and firms, and how these decisions impact the allocation of resources in a society. Key topics in microeconomics include game theory, behavioral and experimental economics, industrial organization, health economics, education economics, welfare economics, and labor economics. Some of the other subtopics listed on this page are also within the scope of microeconomics as long as they examine individual decision making.

Econometrics is a field of science that employs mathematical and statistical techniques to analyze the relationships between various economic variables within a causal framework. Time series is a sub-branch of econometrics. It employs a range of methods to examine and forecast the behavior of economic variables measured at regular intervals (such as monthly or yearly), including indicators like income, production, inflation, and unemployment.

Monetary economics explains how institutions and policies that determine monetary aggregates in a country affect various economic indicators including employment, interest rates, consumption, production, wages, and commodity prices. Topics such as money demand and money supply, the central bank and the banking system, monetary policy tools and objectives, maturity and risk structures of interest rates, as well as financial crises fall within the scope of monetary economics.

Finance refers to how individuals, institutions, and governments manage, invest, and allocate their resources over time, analyzing the financial instruments and risks associated with these activities. Financial economics, on the other hand, focuses on the behavior of financial markets, the pricing of assets, and the factors that influence investment decisions. It examines the impact of economic variables on financial systems, develops models for risk management and forecasting.

International economics involves both international financial transactions and the trade of goods and services across borders. International trade theory, on the other hand, is a subfield of economics that focuses on imports and exports while also encompassing a broader range of economic relationships between countries and regions.

Economic development refers to a society's comprehensive enhancement of quality of life through progress not only in economic, social, and political dimensions but also in health and education. In contrast to economic growth, which emphasizes increases in total output and income, economic development includes the structural changes and advancements of societal institutions. Issues such as measuring poverty and inequality levels in a country, tracking the changes in these indicators over time, and identifying the factors that drive these changes constitute the areas of study within development economics.

Computational economics involves analyzing large and complex data sets, and uses computer-aided simulations and algorithms to develop economic models. In this process, technologies such as artificial intelligence and machine learning play a crucial role in understanding economic dynamics and predicting future trends. Big data analysis, on the other hand, supports more precise and rapid insights into market behavior, consumer trends as well as macroeconomic indicators. These advanced methods go beyond traditional economic analysis, allowing policymakers and businesses to make more accurate and reliable decisions. The integration of economic modeling with computational techniques, big data, and artificial intelligence represents a significant transformation in the field of economics.

This particular field, referred to by economists as "game theory" or "interactive decision-making theory" and by psychologists as "social situation theory," addresses predictable interactions that occur between at least two decision-makers. In other words, it focuses on the rational strategies of individuals or groups in situations where the outcome of one individual's chosen action depends on the actions chosen by others, as well as the consequences of these strategies. Game theory has become an important tool for the development of many subfields of microeconomics. For example, "auction theory," which is also a subfield of microeconomics, utilizes the tools and methods of game theory to design auctions that yield the highest expected returns for sellers and to predict the behavior of potential buyers in these auctions.

Labor economics examines the factors that determine labor supply and demand in a country, as well as the dynamics of unemployment, employment, and wages that arise from this equilibrium. It encompasses a wide range of topics, including human capital investments, individuals' career choices, skill mismatch issues, employer-employee relations, and the causes and effects of discrimination in the workplace. Women's employment and participation in the labor force are also among the key topics in this field. Additionally, due to recent global migration crises, the effects of migration on labor markets has become a prominent research topic within labor economics.

Industrial organization applies the price theory in economics to markets by examining topics such as firm structures, strategic firm decisions, forms of imperfect competition observed in markets as well as regulation and antitrust policies. Economists working in the field of industrial organization focus on the principles governing the functioning of different industries, how to enhance their contributions to societal welfare, and how various public policies can improve these processes.

Public economics analyzes the optimal allocation of public resources, the efficiency of government expenditures, and the impact of public policies on the economy and social welfare. It also examines topics such as government budgets, infrastructure investments, social security, and the financing of public services. Public economics is a field that contributes to economic stability and growth at both micro and macro levels

Education and health are among the fundamental elements that support economic welfare by enhancing human capital and labor productivity in a country. Health economics, a subfield of microeconomics, explores how to supply the highest quality and most equitable healthcare services by optimally using resources allocated to the health sector. Similarly, the economics of education examines the financial aspects of education and the impact of different educational processes on human capital accumulation, thereby supporting individual as well as economic development.

In these two subfields of economics, various models are developed to explain human understanding, learning, and decision-making processes. These models are then tested on different groups of subjects in a laboratory setting, allowing for a review of the various assumptions put forth in economic theories. Markets, games, elections, auctions, bargaining, social preferences, matching as well as field experiments constitute the research areas of experimental economics.