Finance and economics are a part of commerce of social system. There are seen as separate disciplines, but they inter-related also. Both these terms play an important role for investment in markets. Both economists and financial experts are employed in government policy making levels. In general, economics has a wider scope as how a market, region or country is performing in monetary terms. It focuses on public policy, while the focus of finance is on a specific company or industry.

Economics

Economics is a wider tem that deals with the monetary matters of a country or large region. Any minute change in the economy can affect the money cycle of the entire industry specifically. It helps to understand the current market scenario with respect to the existing policies. It throws light on the policy making by the government. It is a guiding force that drives all financial activities in a country by providing a governance framework. The smaller aspects of finance relies on larger body of economics.

Finance

Finance is basically a branch of economics. It deals with the creation, management, study of money, banking, investment, assets and liabilities that are a part of the financial system.

Categories

Economics is studied in smaller categories: macroeconomics and microeconomics. Macroeconomics works on the larger level dealing with terms like GDP, inflation, interest rates and their influence on the economy as a whole. Microeconomics deals with topics like effect of demand and supply in a particular region and its relation with the bigger changes in the economy.

Finance can be divided into three types: Public finance, corporate finance and personal finance. Public finance deals with matters like taxation, expenditures, revenues, stabilization policy etc. Corporate finance focuses on managing assets, liabilities, revenues for a business. Personal finance deals with the financial choices of an individual or a household. It includes budgeting, insurance, savings, mortgaging and retirement planning.

Main focus

Economics deals with monetary matters of a country. It tracks the movement of money in the market. It studies the effect of supply and demand theories at different times and their impact on the society. It looks at the financial theories both for long term and short term. Its aim is study of the conditions and to devise new and effective policies for smooth functioning and growth of the economy.

Finance focuses on the study of prices, interest rates, money flow, quantification of risks and financial markets. Finance works for issues like assessment of value of financial instruments. It uses methods like stock pricing models, capital asset pricing model. It provides solutions for both management and investors, like it decides dividend and debt policy for the companies and a good investment policy for the investors. To be able to take financial decisions at government or corporate levels, one requires a degree in finance. A financial degree holder can work as an analyst, banker, fund manager at Wall Street, commercial banks, insurance companies; or can become a part of management of corporations and companies.

Level of functioning

Economics works at a higher level. It takes decisions for sustainable development of entire country.

Finance works at root level in form of personal and corporate finance.

Decision making

As economics works at a larger scale by tracking and formulating policies, so decision power lies mainly in the hands of government or policy making agency.

Decision making exists at all levels. At personal level decisions are taken by the individual; at corporate level the management makes amendments; at larger level multi-national giants takes the decisions.

Amendment in decisions

Economic decisions can’t be easily altered. They require very high level of analysis as they impact the whole economy.

Financial decisions can be amended within a given period of time for an individual or a corporation.

Conclusion

Both economics and finance deals with the movement o money in a country and makes new ways for sustainable development. Economics provides a macro view with the help of strategies and policies. Finance works with the minute details of how money works in the market. How you find this information?