What is Recsssion?

An extended decline in general business activity. The National Bureau of Economic Research formally defines a recession as three consecutive quarters of falling real gross domestic product. A recession affects different securities in different ways. For example, holders of high-quality bonds stand to benefit because inflation and interest rates may decline. Conversely, stockholders of manufacturing firms will probably see company profits and dividends drop.

After nearly a year of falling commodity prices, rising unemployment, increasing personal and corporate bankruptcies, falling stock prices, and declining public confidence, the National Bureau of Economic Research made it official and on November 26, 2001, declared a recession. The announcement wasn't a surprise to hundreds of thousands of people who had lost their jobs and an even greater number of investors who had experienced substantial losses in the stock market. The bureau's Business Cycle Dating Committee of six academic economists determined the recession commenced in March 2001, when economic activity stopped growing. Although many economists use declines in gross domestic product to define a recession, the NBER Dating Committee examined employment, industrial production, manufacturing and trade sales, and personal income. The country's last previous recession lasted eight months and ended in March 1991. The subsequent ten-year period of uninterrupted growth between March 1991 and March 2001 was the longest in America's history.

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Recession. Broadly defined, a recession is a downturn in a nation's economic activity. The consequences typically include increased unemployment, decreased consumer and business spending, and declining stock prices.

Recessions are typically shorter than the periods of economic expansion that they follow, but they can be quite severe even if brief. Recovery is slower from some recessions than from others.

The National Bureau of Economic Research (NBER), which tracks recessions, describes the low point of a recession as a trough between two peaks, the points at which a recession began and ended -- all three of which can be identified only in retrospect.

The Conference Board, a business research group, considers three consecutive monthly drops in its Index of Leading Economic Indicators a sign of decline and potential recession up to 18 months in the future. The Board's record in predicting recessions is uneven, having correctly anticipated some but expected others that never materialized.

World Economies-An overview

World economy

Economy of the World
During 2003 unless otherwise stated

Population (November 24, 2008):	6,739,067,924 ([1])
GDP (PPP):	US$70.65 trillion (2008 est.) ([2])
GDP (Currency):	$54.62 trillion (2008 est.)
GDP/capita (PPP):	$9,774
GDP/capita (Currency):	$7,178
Annual growth of per capita GDP (PPP):	5.1% (tty*), 2.1% (1950-2003)
People Paid Below $2 per day:	3.25 billion (~50%)
Millionaires (US$):	~9 million i.e. ~0.15% (2006)
Billionaires (US$):	1125 (2008)
Unemployment:	30% combined unemployment and underemployment in many non-industrialized countries. Developed countries typically 4-12% unemployment.
*Trailing-ten-years. Most numbers are from the UNDP from 2002, some numbers exclude certain countries for lack of information.
See also: Economy of the world - Economy of Africa - Economy of Asia - Economy of Europe - Economy of North America - Economy of Oceania - Economy of South America
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The world economy can be evaluated in various ways, depending on the model used, and this valuation can then be represented in various ways (for example, in 2006 US dollars). It is inseparable from the geography and ecology of Earth, and is therefore somewhat of a misnomer, since, while definitions and representations of the "world economy" vary widely, they must at a minimum exclude any consideration of resources or value based outside of the Earth. For example, while attempts could be made to calculate the value of currently unexploited mining opportunities in unclaimed territory in Antarctica, the same opportunities on Mars would not be considered a part of the world economy – even if currently exploited in some way – and could be considered of latent value only in the same way as uncreated intellectual property, such as a previously unconceived invention.

Beyond the minimum standard of concerning value in production, use, and exchange on the planet Earth, definitions, representations, models, and valuations of the world economy vary widely.

It is common to limit questions of the world economy exclusively to human economic activity, and the world economy is typically judged in monetary terms, even in cases in which there is no efficient market to help valuate certain goods or services, or in cases in which a lack of independent research or government cooperation makes establishing figures difficult. Typical examples are illegal drugs and other black market goods, which by any standard are a part of the world economy, but for which there is by definition no legal market of any kind.

However, even in cases in which there is a clear and efficient market to establish a monetary value, economists do not typically use the current or official exchange rate to translate the monetary units of this market into a single unit for the world economy, since exchange rates typically do not closely reflect worldwide value, for example in cases where the volume or price of transactions is closely regulated by the government. Rather, market valuations in a local currency are typically translated to a single monetary unit using the idea of purchasing power. This is the method used below, which is used for estimating worldwide economic activity in terms of real US dollars. However, the world economy can be evaluated and expressed in many more ways. It is unclear, for example, how many of the world's 6.6 billion people have most of their economic activity reflected in these valuations.

Contents 1 Economy – overview 1.1 2007–2008 2 Statistical indicators 2.1 Economy 2.2 Employment 2.3 Industries 2.4 Energy 2.5 Cross-border 2.6 Gift economy 2.7 Communications 2.8 Transport 2.9 Military 3 References 4 See also 5 External links

Economy – overview

2007–2008

Current account balance 2006^[1]

Global output (gross world product) (GWP) rose by 3.2% in 2008, led by China (9%, equal to 21% of global growth), the US (1.1%, or 12% of growth), the European Union (0.9%, for a 10.5% share of growth) and India (7.3%, equal to 5.6% of the total rise). The 12 largest economies (the US, Japan, China, Germany, France, the United Kingdom, Italy, Russia, Spain, Brazil, Canada and India) contributed just over half of all economic growth in 2008.^[2]

Growth results in the wealthy, or “advanced” economies, slowed by two-thirds, from 2.7% in 2007 to just 0.9% in 2008. Emerging Asia slowed from 9.8% to 6.8%; Emerging Europe from 5.4% to 2.9%; the Commonwealth of Independent States from 8.6% to 5.5%; the (non-OECD) Western Hemisphere from 5.7% to 4.2%; the Middle East from 6.3% to 5.9%; and Africa from 6.2% to 5.2%. ^[3]

Externally, the nation-state, as a bedrock economic-political institution, is steadily losing control over international flows of people, goods, funds, and technology. Central governments are losing decision making powers and enhancing their international collective power thanks to strong economic bodies of which they democratically chose to become part, notably the EU. The introduction of the euro as the common currency of much of Western Europe in January 1999, while paving the way for an integrated economic powerhouse, poses economic risks because of varying levels of income and cultural and political differences among the participating nations.

Internally, the central government often finds its control over resources slipping as separatist regional movements - typically based on ethnicity - gain momentum, e.g., in many of the successor states of the former Soviet Union, in the former Yugoslavia, in India, in Iraq, in Indonesia, and in Canada.

Statistical indicators

Economy

GDP (GWP) (gross world product): (purchasing power parity exchange rates) - $59.38 trillion (2005 est.), $51.48 trillion (2004), $23 trillion (2002)

GDP (GWP) (gross world product):’’’^[4] (market exchange rates) - $60.69 trillion (2008)

GDP - real growth rate: 3.2% (2008), 3.1% p.a. (2000-07), 2.4% p.a. (1990-99), 3.1% p.a. (1980-89)

GDP - per capita: purchasing power parity - $9,300 (2005 est.), $8,200 (92) (2003), $7,900 (2002)

GDP - composition by sector: agriculture: 4% industry: 32% services: 64% (2004 est.)

Inflation rate (consumer prices): developed countries 1% to 4% typically; developing countries 5% to 60% typically; national inflation rates vary widely in individual cases, from declining prices in Japan to hyperinflation in several Third World countries (2003)

Derivatives outstanding notional amount: $273 trillion (end of June 2004), $84 trillion (end-June 1998) ([3])

Global debt issuance: $5.187 trillion (2004), $4.938 trillion (2003), $3.938 trillion (2002) (Thomson Financial League Tables)

Global equity issuance: $505 billion (2004), $388 billion (2003), $319 billion (2002) (Thomson Financial League Tables)

Employment

Unemployment rate: 30% combined unemployment and underemployment in many non-industrialized countries; developed countries typically 4%-12% unemployment^{[citation needed]}

Industries

Industrial production growth rate: 3% (2002 est.)

Energy

Yearly electricity - production: 15,850,000 GWh (2003 est.), 14,850,000 GWh (2001 est.)

Yearly electricity - consumption: 14,280,000 GWh (2003 est.), 13,930,000 GWh (2001 est.)

Oil - production: 79.65 million bbl/day (2003 est.), 75.46 million barrel/day (12,000,000 m³/d) (2001)

Oil - consumption: 80.1 million bbl/day (2003 est.), 76.21 million barrel/day (12,120,000 m³/d) (2001)

Oil - proved reserves: 1.025 trillion barrel (163 km³) (2001 est.)

Natural gas - production: 2,569 km³ (2001 est.)

Natural gas - consumption: 2,556 km³ (2001 est.)

Natural gas - proved reserves: 161,200 km³ (1 January 2002)

Cross-border

Yearly exports: $6.6 trillion (f.o.b., 2002 est.)

Exports - commodities: the whole range of industrial and agricultural goods and services

Exports - partners: US 17.4%, Germany 7.6%, UK 5.4%, France 5.1%, Japan 4.8%, China 4% (2002)

Yearly imports: $6.6 trillion (f.o.b., 2002 est.)

Imports - commodities: the whole range of industrial and agricultural goods and services

Imports - partners: US 11.2%, Germany 9.2%, China 7%, Japan 6.8%, France 4.7%, UK 4% (2002)

Debt - external: $2 trillion for less developed countries (2002 est.)

Gift economy

Yearly economic aid - recipient: Official Development Assistance (ODA) $50 billion...

Communications

Telephones - main lines in use: 843,923,500 (2007)
4,263,367,600 (2008)

Telephones - mobile cellular: 3,300,000,000 (Nov. 2007)^[5]

Internet Service Providers (ISPs): 10,350 (2000 est.)

Internet users: 1,311,050,595 (January 18, 2008 [4] est.), 1,091,730,861 (December 30, 2006 [5] est.), 604,111,719 (2002 est.)

Transport

Transportation infrastructure worldwide includes:

• Airports
  • Total: 49,973 (2004)
• Roadways (in kilometers)
  • Total: 32,345,165 km
  • Paved: 19,403,061 km
  • Unpaved: 12,942,104 km (2002)
• Railways
  • Total: 1,122,650 km includes about 190,000 to 195,000 km of electrified routes of which 147,760 km are in Europe, 24,509 km in the Far East, 11,050 km in Africa, 4,223 km in South America, and 4,160 km in North America.

Military

Military expenditures - dollar figure: aggregate real expenditure on arms worldwide in 1999 remained at approximately the 1998 level, about $750 billion, about 1/2 of which was the United States (1999)

Military expenditures - percent of GDP: roughly 2% of gross world product (1999)

Credit crunch on the U.S economy

IMF says US crisis is 'largest financial shock since Great Depression'

A foreclosure sign in Florida. Photograph: Joe Raedle/Getty Images

America's mortgage crisis has spiralled into "the largest financial shock since the Great Depression" and there is now a one-in-four chance of a full-blown global recession over the next 12 months, the International Monetary Fund warned today.

The US is already sliding into what the IMF predicts will be a "mild recession" but there is mounting pessimism about the ability of the rest of the world to escape unscathed, the IMF said in its twice-yearly World Economic Outlook. Britain is particularly vulnerable, it warned, as it slashed its growth targets for both the US and the UK.

The report made it clear that there will be no early resolution to the global financial crisis.

"The financial shock that erupted in August 2007, as the US sub-prime mortgage market was derailed by the reversal of the housing boom, has spread quickly and unpredictably to inflict extensive damage on markets and institutions at the heart of the financial system," it said.

After warning earlier this week that the world's financial firms could end up shouldering $1 trillion (£500bn) worth of losses from the credit crunch, the IMF said it expects the US to achieve GDP growth of just 0.5% this year, and 0.6% in 2009, with the housing crash getting even worse.

Simon Johnson, the IMF's director of research, said later the key risk to the forecasts was the danger of a vicious circle emerging, as house prices continue to fall, dealing a fresh blow to the banks, and exacerbating the problems in the markets. "Sentiment in financial markets has improved in recent weeks since the Federal Reserve's strong actions with regard to investment banks. But we have seen how strains in markets can quickly become reinforcing, and the possibility of a negative spiral or 'financial decelerator' remains a possibility."

President George Bush has already signed off a $150bn tax rebate package to kick-start the economy, and the Federal Reserve has backed an emergency buyout of investment bank Bear Stearns, but the IMF said this may still not be enough: "Room may need to be found for some additional support for housing and financial markets."

In the UK, the chancellor has repeatedly insisted that the economy is "better-placed" to weather the storm, because of its flexible labour market and low unemployment, but the IMF calculated that the British housing market is overvalued by up to 30%, and could be destined for a damaging correction.

Alistair Darling is due to fly to Washington tomorrow to discuss the turmoil with fellow G7 finance ministers.

Mervyn King, governor of the Bank of England, will also be in Washington this weekend to discuss the ramifications of the credit crunch with central bankers from around the world.

Global economic crisis

Global Economic Crisis, World Financial Crisis, Economic Turmoil

The world financial system is now undergoing a global economic crisis of staggering proportions. The root cause of the economic and financial crisis was the United States mortgage market selling sub-prime mortgages to large numbers of consumers with inadequate incomes. These mortgages were bundled into securitized paper investments, and sold by Wall Street to major financial institutions across the globe.

When the mortgages became non-performing, these securitized assets were transformed into toxic acid, infecting the entire worldwide financial system. The ensuing global economic and financial crisis has destroyed trust in banks and borrowers in all the major economies of the world. Depositors are withdrawing their money from uninsured and even insured accounts. Coinciding with this massive run on the world’s banks, these financial institutions are no longer lending capital to each other, reflected in the rising LIBOR short term inter-bank loan rates. Capital is fleeing, and the global credit crunch ensuing has frozen the arteries of a global economy based on easy, cheap credit. As corporations are being denied normal flows of credit, a massive global economic crisis is transforming the financial meltdown on Wall Street into an economic disaster on Main Street. This evolving global and financial crisis and credit crunch will afflict developed and developing economies, leading to massive unemployment, demand destruction and price deflation among many pivotal asset classes

The attempts by the Federal Reserve Bank and Treasury Department in the United States to inject liquidity into the credit market, along with intervention by central banks in many other developed economies, is proving ineffective in responding to the global economic crisis. A growing number of economists are speculating that the global economic crisis will lead to a worldwide recession of such intensity, it may rival the Great Depression of the 1930’s in its calamitous economic devastation.

World Business News

Late-2000s recession

Late 2000s recession

Late 2000s recession in Africa Late 2000s recession in the Americas Late 2000s recession in Asia Late 2000s recession in Australasia Late 2000s recession in Europe

Countries in official recession (two consecutive quarters) Countries in unofficial recession (one quarter) Countries with economic slowdown of more than 1.0% Countries with economic slowdown of more than 0.5% Countries with economic slowdown of more than 0.1% Countries with economic acceleration N/A (Between 2007 and 2008, as estimates of December 2008 by the International Monetary Fund)

The great asset bubble:^[1]

1. Central banks' gold reserves - $0.845 tn.
2. M0 (paper money) - - $3.9 tn.
3. traditional (fractional reserve) banking assets - $39 tn.
4. shadow banking assets - $62 tn.
5. other assets - $290 tn.
6. Bail-out money (early 2009) - $1.9 tn.

Since 2008, much of the industrialized world entered into a recession, the late-2000s recession, sparked by a financial crisis which was caused in part by the combination of a real estate bubble in the United States and the securitization of real estate mortgages in a way which made the riskiness of mortgage-backed securities difficult to assess.^[2].^[3][4] Sub-prime loan losses in 2007 exposed other risky loans and over-inflated asset prices. With the losses mounting, a panic developed in inter-bank lending. The precarious financial situation was made more difficult by a sharp increase in oil and food prices. The exorbitant rise in asset prices and associated boom in economic demand is considered a result of the extended period of easily available credit,^[5] inadequate regulation and oversight,^[6] or increasing inequality.^[7] As share and housing prices declined many large and well established investment and commercial banks in the United States and Europe suffered huge losses and even faced bankruptcy, resulting in massive public financial assistance. A global recession has resulted in a sharp drop in international trade, rising unemployment and slumping commodity prices.

In December 2008, the NBER declared that the United States had been in recession since December 2007, and several economists expressed their concern that there is no end in sight for the downturn and that recovery may not appear until as late as 2011.^[8] The recession is considered the worst since the Great Depression of the 1930s.^[9][10]

Neoclassical Economics

A body of theory later termed 'neoclassical economics' or 'marginalism' formed from about 1870 to 1910. The term 'economics' was popularized by such neoclassical economists as Alfred Marshall as a concise synonym for 'economic science' and a substitute for the earlier, broader term 'political economy'.[34][35] This corresponded to the influence on the subject of mathematical methods used in the natural sciences.[2] Neoclassical economics systematized supply and demand as joint determinants of price and quantity in market equilibrium, affecting both the allocation of output and the distribution of income. It dispensed with the labour theory of value inherited from classical economics in favor of a marginal utility theory of value on the demand side and a more general theory of costs on the supply side.[36]

In microeconomics, neoclassical economics represents incentives and costs as playing a pervasive role in shaping decision making. An immediate example of this is the consumer theory of individual demand, which isolates how prices (as costs) and income affect quantity demanded. In macroeconomics it is reflected in an early and lasting neoclassical synthesis with Keynesian macroeconomics.[37][38]

Neoclassical economics is occasionally referred as orthodox economics whether by its critics or sympathizers. Modern mainstream economics builds on neoclassical economics but with many refinements that either supplement or generalize earlier analysis, such as econometrics, game theory, analysis of market failure and imperfect competition, and the neoclassical model of economic growth for analyzing long-run variables affecting national income.

Classical Economists

Publication of Adam Smith's The Wealth of Nations in 1776, has been described as "the effective birth of economics as a separate discipline."^[29] The book identified land, labor, and capital as the three factors of production and the major contributors to a nation's wealth.

Adam Smith wrote The Wealth of Nations

In Smith's view, the ideal economy is a self-regulating market system that automatically satisfies the economic needs of the populace. He described the market mechanism as an "invisible hand" that leads all individuals, in pursuit of their own self-interests, to produce the greatest benefit for society as a whole. Smith incorporated some of the Physiocrats' ideas, including laissez-faire, into his own economic theories, but rejected the idea that only agriculture was productive.

In his famous invisible-hand analogy, Smith argued for the seemingly paradoxical notion that competitive markets tended to advance broader social interests, although driven by narrower self-interest. The general approach that Smith helped initiate was called political economy and later classical economics. It included such notables as Thomas Malthus, David Ricardo, and John Stuart Mill writing from about 1770 to 1870.^[30]

While Adam Smith emphasized the production of income, David Ricardo focused on the distribution of income among landowners, workers, and capitalists. Ricardo saw an inherent conflict between landowners on the one hand and labor and capital on the other. He posited that the growth of population and capital, pressing against a fixed supply of land, pushes up rents and holds down wages and profits.

Malthus cautioned law makers on the effects of poverty reduction policies

Thomas Robert Malthus used the idea of diminishing returns to explain low living standards. Population, he argued, tended to increase geometrically, outstripping the production of food, which increased arithmetically. The force of a rapidly growing population against a limited amount of land meant diminishing returns to labor. The result, he claimed, was chronically low wages, which prevented the standard of living for most of the population from rising above the subsistence level.

Malthus also questioned the automatic tendency of a market economy to produce full employment. He blamed unemployment upon the economy's tendency to limit its spending by saving too much, a theme that lay forgotten until John Maynard Keynes revived it in the 1930s.

Coming at the end of the Classical tradition, John Stuart Mill parted company with the earlier classical economists on the inevitability of the distribution of income produced by the market system. Mill pointed to a distinct difference between the market's two roles: allocation of resources and distribution of income. The market might be efficient in allocating resources but not in distributing income, he wrote, making it necessary for society to intervene.

Value theory was important in classical theory. Smith wrote that the "real price of every thing ... is the toil and trouble of acquiring it" as influenced by its scarcity. Smith maintained that, with rent and profit, other costs besides wages also enter the price of a commodity.^[31] Other classical economists presented variations on Smith, termed the 'labour theory of value'. Classical economics focused on the tendency of markets to move to long-run equilibrium.

Alfred Marshall

Adam Smith

History of Economic thought

The city states of Sumer developed a trade and market economy based originally on the commodity money of the Shekel which was a certain weight measure of barley, while the Babylonians and their city state neighbors later developed the earliest system of economics using a metric of various commodities, that was fixed in a legal code.^[12] The early law codes from Sumer could be considered the first (written) economic formula, and had many attributes still in use in the current price system today... such as codified amounts of money for business deals (interest rates), fines in money for 'wrong doing', inheritance rules, laws concerning how private property is to be taxed or divided, etc.^[13][14] For a summary of the laws, see Babylonian law and Ancient economic thought.

Economic thought dates from earlier Mesopotamian, Greek, Roman, Indian, Chinese, Persian and Arab civilizations. Notable writers include Aristotle, Chanakya (also known as Kautilya), Qin Shi Huang, Thomas Aquinas and Ibn Khaldun through to the 14th century. Joseph Schumpeter initially considered the late scholastics of the 14th to 17th centuries as "coming nearer than any other group to being the 'founders' of scientific economics" as to monetary, interest, and value theory within a natural-law perspective.^[15] After discovering Ibn Khaldun's Muqaddimah, however, Schumpeter later viewed Ibn Khaldun as being the closest forerunner of modern economics,^[16] as many of his economic theories were not known in Europe until relatively modern times.^[17] Nonetheless, recent research indicates that the Indian scholar-philosopher Chanakya (c. 340-293 BCE) predates Ibn Khaldun by a millennium and a half as the forerunner of modern economics,^{[18][19][20][21]} and has written more expansively on this subject, particularly on political economy. His magnus opus, the Arthashastra (The Science of Wealth and Welfare),^[22] is the genesis of economic concepts that include the opportunity cost, the demand-supply framework, diminishing returns, marginal analysis, public goods, the distinction between the short run and the long run, asymmetric information and the producer surplus.^[23] In his capacity as an advisor to the throne of the Maurya Empire of ancient India, he has also advised on the sources and prerequisites of economic growth, obstacles to it and on tax incentives to encourage economic growth.^[24]

1638 painting of a French seaport during the heyday of mercantilism

Two other groups, later called 'mercantilists' and 'physiocrats', more directly influenced the subsequent development of the subject. Both groups were associated with the rise of economic nationalism and modern capitalism in Europe. Mercantilism was an economic doctrine that flourished from the 16th to 18th century in a prolific pamphlet literature, whether of merchants or statesmen. It held that a nation's wealth depended on its accumulation of gold and silver. Nations without access to mines could obtain gold and silver from trade only by selling goods abroad and restricting imports other than of gold and silver. The doctrine called for importing cheap raw materials to be used in manufacturing goods, which could be exported, and for state regulation to impose protective tariffs on foreign manufactured goods and prohibit manufacturing in the colonies.

Physiocrats, a group of 18th century French thinkers and writers, developed the idea of the economy as a circular flow of income and output. Adam Smith described their system "with all its imperfections" as "perhaps the purest approximation to the truth that has yet been published" on the subject. Physiocrats believed that only agricultural production generated a clear surplus over cost, so that agriculture was the basis of all wealth. Thus, they opposed the mercantilist policy of promoting manufacturing and trade at the expense of agriculture, including import tariffs. Physiocrats advocated replacing administratively costly tax collections with a single tax on income of land owners. Variations on such a land tax were taken up by subsequent economists (including Henry George a century later) as a relatively non-distortionary source of tax revenue. In reaction against copious mercantilist trade regulations, the physiocrats advocated a policy of laissez-faire, which called for minimal government intervention in the economy.

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Economics

Economics is the social science that studies the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek οἰκονομία (oikonomia, "management of a household, administration") from οἶκος (oikos, "house") + νόμος (nomos, "custom" or "law"), hence "rules of the house(hold)".[1] Current economic models developed out of the broader field of political economy in the late 19th century, owing to a desire to use an empirical approach more akin to the physical sciences.[2] A definition that captures much of modern economics is that of Lionel Robbins in a 1932 essay: "the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses."[3] Scarcity means that available resources are insufficient to satisfy all wants and needs. Absent scarcity and alternative uses of available resources, there is no economic problem. The subject thus defined involves the study of choices as they are affected by incentives and resources.

Economics aims to explain how economies work and how economic agents interact. Economic analysis is applied throughout society, in business, finance and government, but also in crime,[4] education,[5] the family, health, law, politics, religion,[6] social institutions, war,[7] and science.[8] The expanding domain of economics in the social sciences has been described as economic imperialism.[9][10] Common distinctions are drawn between various dimensions of economics: between positive economics (describing "what is") and normative economics (advocating "what ought to be") or between economic theory and applied economics or between mainstream economics (more "orthodox" dealing with the "rationality-individualism-equilibrium nexus") and heterodox economics (more "radical" dealing with the "institutions-history-social structure nexus"[11]). However the primary textbook distinction is between microeconomics ("small" economics), which examines the economic behavior of agents (including individuals and firms) and macroeconomics ("big" economics), addressing issues of unemployment, inflation, monetary and fiscal policy for an entire economy.