ABSTRACT
This chapter explores the relationship between government and policy and explores the role of economics in seeking solutions for some major issues. Economic analysis provides the means by which government can implement its policies. The Stern Review on the Economics of Climate Change is the most well-known and most widely discussed report highlighting the issues surrounding climate change. In the wake of the financial crisis of the late 2000s and the subsequent global recession, economics came under a lot of criticism about its failure to have predicted what was to occur. The branch of economics that applies economic analysis to understanding the particular problems faced by less-developed countries (LDCs). Economics uses mathematical techniques as a key tool of analysis, building models to represent reality. Public economics looks at the theory and practice of how and why governments intervene in the economy at both microeconomic and macroeconomic levels.
