Macroeconomics is the study of the economy’s behavioural manner as a whole, focusing on various wider factors such as growth, gross domestic product, unemployment, inflation and other similar phenomena.
While microeconomics focuses on smaller factors that influence the choices made by companies and individuals, whereas macroeconomics emphasizes on the big picture of the economy, both concepts are interlinked.
The above interconnection is one where, for example in the case of microeconomics, the level of unemployment in an economy, as a whole, has a direct impact on the number of workers that a company is willing and able to recruit.
Macroeconomics studies the economy as a whole
On the other hand, the macroeconomic view does not pay attention to the individual markets, such as an industry or a company, but it focuses more on the impact, behaviour, decision making and performance of the economy as a whole.
Furthermore, the economists, the analysts, and, generally, the people who are working in the field of macroeconomics study mostly the aggregate indicators to understand their correlation and how the economy functions.
Some indicators, the ones mostly used, are price indices, gross domestic product (GDP), unemployment rate, inflation, national income, output, consumption, finance, savings, international trade, and investments.
The macroeconomic research is also more of a broad field involving both, short-term and long-term consequences and the understanding of market fluctuations.
From a short-term spectrum, the research focuses on businesses or industries’ cycle, such as growth, maturity stage, acceleration and deceleration within a sector, policies, etc. In wider terms, the macroeconomic factors influence the nations’ economies and the economy as a whole.
Moreover, the daily events, announcements, or releases, shape the world’s economy, as the impact of such factors, either weak, medium or strong, is greatly influencing the world’s currencies, commodities, indices, shares, and other financial related instruments.