Methods of Research in Economics

The economy in the study of economic processes uses certain methods. Research methods in the economy are ways and means of studying certain phenomena.

Methods of research in economics, like in any other field of knowledge, are divided into general (philosophical), general scientific (historical, logical, etc.) and specific to the economy.

In this science, methods such as functional analysis, analysis and synthesis, scientific abstraction, induction and deduction, hypothesis advancement and testing, experimentation, modeling, etc. are widely used.

The method of scientific abstraction is reduced to the purification of the object under study from particulars, any accidents and the isolation of typical, permanent and essential features and characteristics. As a result of using this method, categories and concepts are derived that reflect the most important aspects of the objects under study, as well as economic laws reflecting the permanent cause-effect relationships existing between the phenomena of the economy.

The method of graphic images allows you to visualize certain economic dependencies. As a rule, economists place independent data (variables) on the ordinate axis, and dependent ones, respectively, on the abscissa axis.

Functional analysis helps to establish relationships and relationships between economic processes and phenomena, when some factors act as exogenous (independent) and others as endogenous (derived from the first group).

Research methods in economics are widely used in economic and mathematical modeling, which today is one of the most common methods of investigating economic problems. It allows you to identify the causes, consequences, patterns of processes. Economic models help to describe reality in a simplified form, they are an abstract generalization with the help of graphs, equations and it is necessary to clearly describe the interrelations between economic variables. Models help to better understand the phenomena of economic reality, since they do not include many secondary details that complicate the vision of the essence of processes and the connections between them.

Mathematical methods of research in the economy are quite complex, because the economy is a multidimensional system in which most processes are of a probabilistic nature and depend on many factors.

Marginal (marginal) analysis is used to study economic categories and laws. The essence of the analysis is reduced to an increment of the economic indicator, caused by an increase by one unit of the factor on which this indicator depends. Such an increase is characterized by marginal revenue, marginal product, marginal utility, and so on.

Experimentation is used to artificially reproduce economic processes and phenomena so that they can be studied "near". However, this method requires caution, since it is unacceptable to break down natural processes, putting real life in artificial designs.

In economic theory, statistical methods are used to study the economic conjuncture . These methods are necessary in the work of analysts as a diagnostic tool in order to make correct management decisions. The conjuncture is a situation that has developed at a certain point in a certain sphere of economic life. It is about the specific conditions of the production process, the situation in the markets, etc. In the application of this method, methods of calculating absolute and relative efficiency are used, and index and balance methods are used.