Overview

Economists are interested in the choices people make when they shop, when they choose jobs, and when they vote as well as the choices made in State Capitols, at the Federal Reserve, and on Wall Street. For example, understanding the sources of economic growth, differences in income across countries, the rate of inflation, and the appropriate policy responses to recessions are fundamental issues in macroeconomics, which is the study of the performance of an economy as a whole.

Microeconomists study households, firms, and markets. For example, why has the price of energy fallen relative to other prices, why do housing prices vary across locations, why do similar people earn such different pay, and why do firms produce and price things the way they do?

Economists participate in debates about policy toward climate change, international trade, taxes, healthcare, immigration, and crime. At a deeper level, the fundamental institutions that support economic activity are important as well. Such institutions—legal principles and laws, social norms, even families and communities—facilitate market and non-market transactions, investment in human and physical capital, innovation and technological change, and social and geographic mobility. This leads to questions about the role of government in regulating, taxing, subsidizing, or otherwise affecting markets and related institutions.