Fiscal stimulus. Economic package. Printing money. Inflation. Migrant workers. All these words are getting tossed in our platter every moment ever since the pandemic has bared its fangs. Some are difficult to comprehend until and unless the leading dailies explains them in a commonsensical way. But if there is one thing that ties all these jargons together it is economics. To be precise macroeconomics.
This pandemic again has brought macroeconomics to forefront. The task of reading and studying economics, choosing it as a career has never been more important. The task of comprehending and formulating policies, learning from empirical data and building theoretical frameworks is the need of the hour. Frameworks that can explain the current crisis. Frameworks that can envision a radical new.
As economics is a social science, it has close ties with history, politics. How society changes gets reflected into economic theories and again economic theories reflect back into society. This wheels of dialectics makes the subject alive. And if there is one aspect that can capture this diversity, it is macroeconomics.
Let us explain with an example. The current crisis has been compared by many with the Great Depression that had rocked Britain and the world in the 1930s. Lack of purchasing power of the people and hence lack of demand, unemployment became rampant at that time. To combat the crisis, revolutionary theories came up which brought to the forefront the need of government intervention to tide over the crisis. Government should spend more after its people, create jobs and other social securities and thus inject demand into the economy. This came to be known as Keynesian macroeconomics, after the economist John Maynard Keynes who was the proponent of this school of idea. This branch of economics became very popular, dominated the globe for decades and the result was the creation of welfare states across globe. However as history changed, as government intervention began to be termed as excess, welfare states started collapsing, there emerged another important school of thought in macroeconomics which is called monetarist school of idea. It championed free market, the fact that market can solve any problem, having found its most loyal crusader in Milton Friedman, the Nobel laureate.
Today when we are seeing the government is announcing packages to revive the economy from doldrums, we can see Keynesian economics is standing guard again. When we see RBI is trying to boost the economy through its policy tools, it is again macroeconomics. When the plight of the migrant workers is shaming the nation as the whole, it is again macroeconomics.
So, see it is indeed a brilliant subject of specialization because it is that branch that can bridge the gap between theories and society. Sometimes while doing graduation or masters in economics, the rigorous calculations, empirics starts alienating ourselves from the society. Then is the time to resort to macroeconomics. Because this branch has mind and heart both in the right place. This branch can make you vision a new society post pandemic.
So hurry up, make economics your career and macroeconomics your specialization! After all historically pandemics have taught us to think differently!
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