Functions of economic theory

The main functions of economic theory were formed during the period of the formation of this science. There are only five of them.

1. Cognitive. The realization of this function of economic theory occurs through the study of the essence of processes and phenomena in this field. When science discovers and formulates new categories and laws, thereby it replenishes human knowledge, increases the intellectual potential of the whole society. It also contributes to the expansion of the world outlook of people, to the scientific forecasting of the economic development of society.

2. Methodological. The meaning of this function of economic theory is that it reveals the basic concepts, categories, laws and principles of management. And they all have practical application in many branches of human activity. That is, a number of other sciences in this field rely on economic theory.

3. Practical. The essence of this function of economic theory boils down to the justification of state policy in this field from the point of view of science. Also, in practice, recommendations are being developed regarding the use of methods and principles of sound management.

Economic policy looks like a whole system of measures taken by the state. All of them are aimed at the development of the nation's economy and affect the interests of all social classes. In her competence to determine the best possible solutions to the problems that have arisen in this area.

Economic theory and practice are in close relationship with each other. Without a two-way communication, they lose all meaning. So, the order for theoretical research is formed by practice. It provides material for scientific analysis and provides a final assessment of the viability of any theory. Practice is a real criterion of authenticity of knowledge in economics. It encourages learning. It also leads to forecasting, the next step from which is rational action, presupposing constant improvement of practice. This cycle is repeated endlessly, with each time rising to a higher level.

4. Prognostic. It manifests itself in the development of a scientific justification for anticipating the future development prospects of the country in terms of the economy and society's life. In practice, it reduces to the development of forecasts for the implementation of long-term programs relating to the development of social production. Moreover, future resources, costs, and options for final results are taken into account.

5. Educational. The meaning of this function of economic theory lies in the formation of citizens' analytical abilities, modern type of thinking, logic and culture. All this will help them in the new market system to develop economic, literate behavior. The result of the effective impact of this function is the formation of a holistic picture of the population of the economic system at the level of the nation and the world. In addition, she fosters the understanding that only deep knowledge, initiative and enterprise, persistent work, making informed decisions and the ability to take responsibility for one's own actions in a highly competitive environment will help achieve a high standard of living and success in the profession.

Currently, the country continues to transition to market relations. Therefore, in modern conditions the subject and functions of economic theory play an important role. After all, profound knowledge is simply necessary in order to change the conditions of life for the better. This can not be done without mastering the economic laws and mechanisms of their use in economic activities, without the ability to recognize the nature of interdependencies and interrelations in this field.