By Patrick Carroll

Whenever I meet someone, at some point, the subject of what I do for a living comes up. When I tell the person that I work in economics education, they often seem to have misconceptions about what that entails. They’ll ask me for investment advice or economic forecasts.

“Oh, you work in economics? What stocks would you recommend? What do you think will be the next big business trend? Where do you think interest rates are heading?”

These questions are perfectly innocent, but they betray a somewhat serious ignorance on the part of the person asking. More specifically, they indicate that the person doesn’t understand the distinction between the field of economics and the field of finance.

Another common misstep has to do with the field of accounting. Is it just another word for finance, or is it something else entirely?

To avoid being the kind of person who asks the wrong questions to the wrong people, it’s helpful to get an understanding of what these three fields are all about, and what they aren’t about. To that end, let’s take a look at each one in turn.

The Merriam-Webster dictionary defines finance as “the science or study of the management of funds.” It defines the financial system as “the system that includes the circulation of money, the granting of credit, the making of investments, and the provision of banking facilities.”

In brief, the field of finance is all about how money is used, both in the economy and in our personal lives. This means it tries to understand things like purchases, loans, investments, and acts of saving.

Between finance, accounting, and economics, finance is the one that is probably most closely associated with the business world and........

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