What are Macroeconomics?

August 8th, 2015

We all know just how important money and finances are in the world, helping determine who can do what, who can buy what, and where one can travel or live. In short, money matters. Thankfully, the discipline of economics has emerged over the last several centuries to help us understand how goods and services are allocated and distributed in our lifeworlds. In economics, there are two general branches: microeconomics and macroeconomics. Microeconomics focuses on the behavior of branches and firms in making decisions regarding the allocation of limited resources. While microeconomics are important to study, here we will focus on macroeconomics, in order to understand just how crucial these systems are to our well-being and everyday lives.

The field of macroeconomics studies the economy as a whole: its structure, behavior, performance, ideology and reasoning. To put it another way, macroeconomics studies the sum of the economy’s parts in an attempt to understand what the economy does and why it does it. Doing so allows economists to help individuals live better lives by shedding light on why social situations are the way they are and how they can be alleviated.

Take poverty for example. While some would conclude that poverty is the result of laziness or lack of gumption and effort, others would suggest that the macroeconomic structure of a given nation or locale more greatly determines why people are in poverty and why they stay there over generations. In other words, macroeconomics looks at the system, not the individual, to understand how goods and services are allocated, and how people can begin to pay for these goods and services, or have better access to them. Things like output and income, unemployment, and inflation and deflation are studied by macroeconomists, because these things typically fall out of the purview of a specific individual or organization.

Economists like Christian Broda, a New York-based economist and financial professional, study macroeconomics in an attempt to better understand how the financial system functions for members of society. Broda received his training from Massachusetts Institute of Technology, and is currently the managing director of Duquesne Capital Management. His job is to help manage capital by studying and researching the economic system in an attempt to navigate and predict economic trends and tendencies. People who work with Broda, or who hire him as a capital manager, expect him to be knowledgeable about economic systems and global finances.

In today’s society, many people consider the world’s economy globalized, which means that nation-states interact with one another to promote trade and increase wealth across borders. Others would suggest that the notion of globalization is flawed, since what some consider free markets are in reality strongly regulated by national governments. Whatever the case may be, it is clear that understanding the economy means understanding international finances. That way, people can work to secure capital in the market. People like Christian Broda have as their job the call to understand policies and procedures which make this larger-level economy function across the globe.

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