Applied Economics

AAA

DEFINITION of 'Applied Economics'

The application of economic theories and principles to real world situations with the desired aim of predicting potential outcomes. The use of applied economics is designed to analytically review potential outcomes without the "noise" associated with explanations that are not backed by numbers. Applied economics can involve the use of econometrics and case studies.

INVESTOPEDIA EXPLAINS 'Applied Economics'

Because economics relies on the interpretation of historical events in its theories, applied economics can lead to "to do" lists for steps that can be taken to ensure stability in real world events. Although applied economics uses economic theory and principles, it is itself not a field of economics, such as neoclassical economics or the Austrian school.

RELATED TERMS
  1. Business Cycle

    The fluctuations in economic activity that an economy experiences ...
  2. Mechanism Design Theory

    An economic theory that seeks to determine the situations in ...
  3. Financial Economics

    A branch of economics that analyzes the use and distribution ...
  4. Macro Environment

    The conditions that exist in the economy as a whole, rather than ...
  5. Econometrics

    The application of statistical and mathematical theories to economics ...
  6. Economics

    A social science that studies how individuals, governments, firms ...
Related Articles
  1. Fundamental Analysis

    How Influential Economists Changed Our ...

  2. thinkstock|istock
    Economics

    Understanding Supply-Side Economics

  3. thinkstock|digital vision
    Economics

    Monetarism: Printing Money To Curb Inflation

  4. Investing Basics

    Economic Indicators That Do-It-Yourself ...

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  3. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  4. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  5. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
Trading Center