Mesoeconomics

Mesoeconomics is a field of economics that bridges the gap between microeconomics and macroeconomics. While microeconomics focuses on the behavior of individual economic agents like households and firms, and macroeconomics examines the economy as a whole, mesoeconomics analyzes the behavior of intermediate-sized economic units. These units can include industries, sectors, or specific markets.

The goal of mesoeconomics is to understand how these middle-level aggregates function and interact. It explores phenomena that are too complex for simple microeconomic models but too specific for broad macroeconomic theories. For instance, mesoeconomics might study the dynamics of the automobile industry, the impact of technological change on a particular sector, or the competitive landscape within a specific product market.

Key areas of mesoeconomic inquiry often involve analyzing market structures beyond perfect competition and monopoly, such as oligopoly and monopolistic competition. It also investigates how different industries respond to aggregate economic shocks, such as changes in interest rates or inflation, and how their collective actions then feed back into the broader macroeconomic picture. Mesoeconomics provides a more nuanced understanding of economic adjustments and transformations that occur at a level between individual decisions and the overall national economy.