Understanding how changes in foreign ownership of assets effects balance of payments

Balance of payments. Current account. Capital account. Currency reserves and speculative attacks. In this tutorial we will see how trade and assets (including money) changing hands are fundamentally intertwined. Not only that, but we will see how this can

How a change in fiscal policy shifts the IS curve

Consumption function. Marginal propensity to consume and multiplier. Keynesian Cross and IS-LM model. In this tutorial, we begin thinking about the impact of real interest rates on planned investment and output. We then use this to help us plot the IS cur

Overview of full reserve banking in comparison to fractional reserve banking

Fractional reserve banking and the money supply.

What happens when a good is not finished in a period

Circular flow of income and expenditure. Gross domestic product. Economics can some times get confusing because one person's expenditure is another person's income which can then be used for expenditure and on and on and on. Seems very circular. It is. Th

Basic of hyperinflation. Weimar Germany, Hungarian Pengo and Zibabwean Dollar

Inflation and deflation. CPI-U. Real and nominal return. Phillips Curve.

Thinking about how high utilization could drive price as another justification for an upward sloping short-run aggregate supply curve

Aggregate demand and aggregate supply. Keynesian thinking. Demand-pull and cost-push inflation. Fiscal and monetary policy. In the last tutorial, we claimed that the aggregate demand and aggregate supply model (AD-AS) would be useful for analyzing macroec

Weaknesses of Fractional Reserve Lending

Fractional reserve banking and the money supply.

Contrasting Keynesian and Classical Thinking

Aggregate demand and aggregate supply. Keynesian thinking. Demand-pull and cost-push inflation. Fiscal and monetary policy. Whether you love him or hate him (or just consider him a friend that you respect but disagree with every-now-and-then), Keynes has

Generalizing a linear consumption function as a function of aggregate income

Consumption function. Marginal propensity to consume and multiplier. Keynesian Cross and IS-LM model. We are steadily building up the tools to understand the Keynesian Cross and the IS-LM model. In this tutorial, we begin to model consumption as a linear

How a currency crisis in Thailand led to a banking crisis in the 1990s

Balance of payments. Current account. Capital account. Currency reserves and speculative attacks. This tutorial delves into how and why countries (usually their central banks) would want to keep other countries' currency in reserve. It then goes into why

The observation that inflation and unemployment tend to be inversely correlated

Inflation and deflation. CPI-U. Real and nominal return. Phillips Curve.

Basic introduction to what microeconomics and macroeconomics study. A bit on Adam Smith

Circular flow of income and expenditure. Gross domestic product. This very short tutorial gives us the big picture of what economics is all about and, in particular, compares macroeconomics (where you are now) to microeconomics.

Thinking about why aggregate supply may not be influenced by prices in the long-run

Aggregate demand and aggregate supply. Keynesian thinking. Demand-pull and cost-push inflation. Fiscal and monetary policy. This tutorial looks at supply and demand in aggregate-from the perspective of the entire economy (not just the market for one good

Difference between every day and economic notions of investment and consumption

Circular flow of income and expenditure. Gross domestic product. You already understand the circular nature of the economy and how GDP is defined from the last tutorial. Now let's think about how economists define the composition of GDP. In particular, we

More on shifting aggregate planned expenditures. Connecting to the multiplier

Consumption function. Marginal propensity to consume and multiplier. Keynesian Cross and IS-LM model. We now build on our consumption function models and start to explore ideas of planned expenditures as a function of output. When plotted with the actual

Using real GDP as a measure of actual productivity growth

Circular flow of income and expenditure. Gross domestic product. The value of a currency is constantly changing (usually going down in terms of what you can buy). Given this, how can we compare GDP measured in dollars in one year to another year? This tut

How government can effect aggregate demand through tax policy

Aggregate demand and aggregate supply. Keynesian thinking. Demand-pull and cost-push inflation. Fiscal and monetary policy. Governments (and pseudo government entities like central banks) have two tools at their disposal to try to impact the business cycl

The basic idea of a consumption function

Consumption function. Marginal propensity to consume and multiplier. Keynesian Cross and IS-LM model. We are steadily building up the tools to understand the Keynesian Cross and the IS-LM model. In this tutorial, we begin to model consumption as a linear

Understanding the United States Current Account in 2011

Balance of payments. Current account. Capital account. Currency reserves and speculative attacks. In this tutorial we will see how trade and assets (including money) changing hands are fundamentally intertwined. Not only that, but we will see how this can

Basics of a deflationary spiral

Inflation and deflation. CPI-U. Real and nominal return. Phillips Curve.