The economy as a science that studies the factors of production, wealth creation, distribution and consumption of goods and services to satisfy human needs, is the basis for management, the finance and accounting.
The economy is the science that studies the distribution of limited resources, thus “studies scarcity” its relationship with the administration of resources is unquestionable.
The economic figures make use of the meticulousness and the different fields of an accounting management system that register, order and present analyzes and reports from there the relationship between economics and accounting.
Part of the economy relies on theories and models to analyze the movements of money between individuals, companies and nations, which is the basis of finance.
The economy as one of the social sciences focuses on human needs and behaviors inherent in the distribution and rational use of resources. Therefore, it poses a close link with sociology, considering also that the different economic systems such as capitalism, communism and socialism govern the foundations of societies.
The economy relies on numerous quantitative tools to explain on a logical and supported basis how to solve problems of production and distribution of resources, hence its strong link with mathematics.
The different areas of the economy allow an integrality, a huge field of action and an important link with other disciplines of human knowledge.
It is easy to see how the very definition and importance of economics has strong links with other sciences. Let’s continue in this article by presenting the relationship of economics with other sciences.
Some sciences related to economics
The economy as the field of knowledge that studies the production, distribution and consumption of goods and services for the satisfaction of human needs, is closely intertwined with mathematics and the social sciences, which can be defined as the studies of society.
By classifying economics as a social science we link it with fields of study such as history, geography, politics, psychology, and philosophy. Let us value each of these links.
Economy and History
The story is related to the economy in numerous ways. First, history provides the economy with material, data, and records that economists can analyze.
Second, history has been largely influenced by economic factors. In fact, many wars, conflicts, and revolutions occurred as a result of economic disputes.
In addition, numerous inventions that shaped the course of history were introduced to improve the economic models of production and distribution as well as the economic condition of people in general.
Economics and Geography
The geography is another social science that is linked to the economy. A favorable geographical position is an important determinant of the prosperity of a nation. Climates, reliefs, soils, hydrographic resources determine the productive systems and wealth that a region has.
A typical case of Panama for its isthmic and strategic position to connect the Atlantic with the Pacific, which makes it a whole logistics center or HUB of the Americas.
The main factors of a country’s geographical position that determine its economic potential are proximity to markets and the abundance of available natural resources.
Economics and Political Science
The politics and economics go hand in hand. As John Maynard Keynes, a famous economist, once observed: “Practical men, who think themselves quite free from any intellectual influence, are often the slaves of some deceased economist.”
Ideological and political thoughts or ways of governing are based on opposing economic systems such as capitalism or communism. Reciprocally, political theories also influence economics. For example, the economic theorist Adam Smith used many political ideas from the thinker John Locke.
The economic theories influence policy. A case in this regard are the ideas of liberalization economics promoted by Milton Freedman and his great influence on the politics of President Ronald Reagan.
Economics and Philosophy
Philosophical thoughts and economics can become intertwined in such a way that it is sometimes difficult to distinguish where one ends and the other begins.
Many of Karl Marx’s writings can be classified both as economic works and as forms of philosophical thought. Another example is Milton Freedman, although he is mainly considered as an economist a libertarian philosophy or “libertarianism” plays a central role in all his ideas.
Economics and psychology
Unquestionably the economy concerns and studies human behavior, especially in its economic decisions, these are the choices and actions of the individual when faced with the management of limited resources.
The psychology provides elements for the economy especially in microeconomics, economic decisions of individuals there are many qualitative elements that psychology helps to understand.
Economics and Mathematics
The mathematical tools provide calculations, modeling and forecasting used by economists.
Of particular importance are algebra and calculus, as they allow economists to construct elaborate econometric models to study macroeconomic variables such as changes in gross domestic product (GDP), employment, inflation, per capita income, and other variables.
The mathematics are also used in microeconomics, for example, to calculate the optimal price of an economic good.