We have seen that
there is a distinction between micro and macroeconomics, but this does not
imply that both are independent ways of analyzing the economic issues. Both are
complementary to each other.
Analysis of economy cannot be conducted in two water tight compartment. Variables of each other are interdependent, therefore as we analyse micro economic variables,we have to take account of macroeconomic variables that may affect the micro economic variables and vice versa.
When we say that macroeconomic theory deals with big issues of economic life it does not mean that macroeconomic theory is more important, since the entire economy is made up of small units of microeconomics, so micro economic theory is equally important.
Also the main objective of both are same i.e. maximization of material welfare of the people and the entire economy. So study of both is equally vital so as to have full knowledge of the subject matter of economics.
As said by Samuelson “There is really no opposition between micro and macro economics. Both are vital. You are less than half educated if you understand one while being ignorant of the other.”
Macro & Micro Economics can be better understand by the below picture.
Analysis of economy cannot be conducted in two water tight compartment. Variables of each other are interdependent, therefore as we analyse micro economic variables,we have to take account of macroeconomic variables that may affect the micro economic variables and vice versa.
When we say that macroeconomic theory deals with big issues of economic life it does not mean that macroeconomic theory is more important, since the entire economy is made up of small units of microeconomics, so micro economic theory is equally important.
Also the main objective of both are same i.e. maximization of material welfare of the people and the entire economy. So study of both is equally vital so as to have full knowledge of the subject matter of economics.
As said by Samuelson “There is really no opposition between micro and macro economics. Both are vital. You are less than half educated if you understand one while being ignorant of the other.”
Macro & Micro Economics can be better understand by the below picture.
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| Microeconomics and Macroeconomics |
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