The observation that inflation and unemployment tend to be inversely correlated

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

Big picture of how money enters circulation and how lending can increase the money supply

Fractional reserve banking and the money supply.

Thinking about a consumption function where taxes are also a function of income (which is more realistic than constant taxes)

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

Intuition behind why the current account and capital account should balance

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

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

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

Why there tends to be moderate inflation during good economies

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

How banks can actually create checking accounts under a fractional reserve system

Fractional reserve banking and the money supply.

Showing how a change in government spending can lead to a new equilibrium

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

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

Factors that might shift aggregate demand

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

Intuition as to why high real interest rates lead to low investment and why low rates lead to high investment

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

How a central bank could use foreign currency reserves to keep its own currency from devaluing

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

Understanding how aggregate demand is different from demand for a specific good or service. Justifications for the aggregate demand curve being downward sloping

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

Why Keynesian thinking might not be ideal sometimes

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

Looking at a simple model of an economy

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

Basics of price inflation and the CPI (consumer price index)

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

How the theory of liquidity preference drives demand for money and the LM (liquidity preference-money supply) 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

Thinking about how real GDP can drive real interest rates

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

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

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