Economics is as old as human beings on this planet. Initially it was refered to as "rules of household". But with the passage of time as the human beings grew and became more intelligent with their daily lives, economics as a subject matter grew parallely, justifying every act of human beings. And soon it became the most important weapon to rule! Economic education is knowing ourselves and the surroundings (neighborhoods and communities) we live in, knowing how our needs change with regard to changes in our surroundings and vice versa.
Economic education is vital to the future health of our nation's economy. It empowers consumers by giving them the knowledge and tools to improve their economic well-being. It is the best investment we can make to strengthen our nation's economy.
Economists recognize that developing basic economic and financial knowledge is an important goal for a democratic society that relies heavily on informed citizens and personal economic decision-making. When households are capable of building wealth, they are also capable of building more economically stable neighborhoods and communities.
In today's ever-changing and increasingly competitive financial marketplace, knowledge is power. We are living in an age in which the communications revolution has inundated consumers with more information than ever before, even as the financial marketplace has become more complex. But simply having more information does not necessarily mean people have more knowledge.
As we all know, the business of managing our money in this environment has become increasingly complicated. Technological advances continue to expand the range of financial services available to consumers. While choice and flexibility are certainly beneficial to the consumer, they come with increased risks — especially among consumers who lack the knowledge and resources to discern their choices.
The consumers must not only have access to information, but they must also be able to both understand and use it. This is our challenge. It is difficult enough for the average consumer to understand and choose wisely among the complex financial products and services now available. Think what an exceptionally daunting challenge it is for those with limited financial experience or education to make such decisions. Therefore, educating consumers on the basics of economics is an issue of critical importance.
Mr. Antony M. santomero, has illustrated how important it is to identify the changing trends in the economy even if such changes may or may not affect us directly, it is wise to be aware and more importantly to know its implications and solutions in case of problem. That's why today, knowledge alone is not the power!
Lets take an example. Today after ourselves if we trust anyone is the banking system of our nation. The banking system of any country must assume its responsibility to educate the people of its nation and must be involved in such initiatives. As you know, the central bank serves a three-fold function in our economy: it conducts monetary policy, supervises and regulates banks and financial institutions, and maintains an effective payments system. Our economic education efforts are important to, and intertwined with, all three functions.
First, educating the nation's populace about economic issues is an integral part of our role in monetary policy. Economic education fosters a better understanding of how policymakers have an impact on the economy. This basic knowledge of economics helps consumers better understand banking policy actions and how changes in policy ultimately affect their own lives.
Second, as a regulator and supervisor of banks and other depository financial institutions, the central bank is responsible for promoting safety and soundness in the industry.
Third, the central bank's duty to maintain an effective payments system is facilitated by knowledgeable consumers. Simply stated: If people are informed about available choices, they will be better able to make appropriate decisions about their payments. For instance, consumers must make decisions about when to pay by cash, check, credit card, or debit card. The options are increasing, and the choices have become more complicated.
For all these reasons, economic education is critical to the nation's long-term objective of maximum sustainable economic growth. Educated consumers are the key to a well-functioning financial market, one that best serves the nation's economy.
Economic education fosters a better understanding of how policymakers have an impact on the economy.
Effective economic education helps people develop the skills to meet their financial and personal objectives, including savings, financial stability, home ownership, higher education, or retirement. Rather than being merely reactive in correcting abuses that occur in financial markets — which we must — it is better to be proactive in developing an educated consumer, knowledgeable enough to avoid being abused.
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