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Is finance a category of economics?

Economics and finance are two closely related disciplines, but they have different focuses on research issues.

Economics is usually classified as a social science, and it mainly focuses on the study of macro-level production, consumption, and distribution of goods, services, and resources. At the same time, economics will also study the impact and role of the government's tax policy, monetary policy and other regulatory policies on the macro economy, macro enterprises and market participants; it will also study the supply and demand issues of the market. Issues in these economic fields are often closely linked to the financial decisions (such as financing, investment, etc.) of macro market participants (including companies, individuals, etc.).

Although finance belongs to business in the usual sense, it still has the attributes of social science. It focuses on the research and analysis of financial markets, and the specific pricing issues of financial assets traded in financial markets and the operation and management issues of corporate finance. The proper pricing of financial assets involves properly measuring the risks of assets and cash flows, which are closely related to macroeconomic conditions and policies.

So I think economics and finance are different and closely related. As for the college under which they are established as a subject unit in colleges and universities, it is just a matter of the institutional structure of colleges and universities and will not change. properties of the relationship between them. At the same time, these two disciplines essentially study human activities, so they are both social. Economics studies how to optimally allocate limited resources, while finance adds the dimensions of time and risk to this. In essence, it is still studying how to optimally allocate resources. With the deepening of research, people have also discovered that human rationality is limited and often cannot always make optimal decisions. Therefore, behavioral economics and behavioral finance have introduced psychology to explain this-this further It confirms that both economics and finance belong to the category of social sciences.