Modern economic thought is usually said to have begun with Adam Smith in the late 18th century. For an overview of precursors to Smith as well as an overview of schools that have developed later, see history of economic thought. Modern mainstream economics is primarily a further refinement of neoclassical economics.

Macroeconomics began with Keynes in the 1930s. For an overview of a number of competing schools, see macroeconomics.

Many economists use a combination of Neoclassical microeconomics and Keynesian macroeconomics. This combination, sometimes known as the Neoclassical synthesis, was dominant in Western teaching and public policy in the years following World War II and up to the late 1970s.

In principle, economics can be applied to any type of economic organization. However, it developed historically in market societies, and its most detailed and precise work has dealt with the institutions belonging to them. To what extent economics must be adjusted to be applied to earlier forms of social organization has been the source of discussion. Generally, mainstream economists mostly feel that the basic framework of economics is relevant and flexible enough to be applied to virtually any form of society. Marxist economists, who were more influential a few decades ago, often feel that each era of history obeys its very own set of laws, and that contemporary economics can only be applied to industrialized societies.