Macro for the Impatient
This is the shape of Japan's Philips Curve—because, in Japan, even inflation and unemployment look aesthetically pleasing!
What is Japan?
This measure of productivity, developed by Bob Solow in the 1950s, is still used today—because economists figured, 'Why invent something new when we can just keep riding Bob’s coattails for eternity?'
What is the Total Factor Productivity (TFP) or the Solow Residual?
This concept explains why countries stick to making stuff they’re relatively less bad at—because apparently, 'Hey, we’re the least terrible at this!' is a winning trade strategy!
What is comparative advantage?
Some people (some -- but not Alexey!) say that this Harvard professor's jokes are funnier than Roberto's.
Who is Ricardo Hausmann?
These are the Nobel Prize winners in Economics this year!
Who are Daron Acemoglu, Simon Johnson, James Robinson?
This framework helps us analyze economic fluctuations, inflation, output levels, and precisely when economists will start blaming each other again on Twitter.
What is the Aggregate Demand (AD) - Aggregate Supply (AS) framework?
Paul Krugman compared Lee Kuan Yew to Stalin because of this aspect of Singapore's growth.
What is growth from accumulation of capital and not from productivity?
This modern economic "game of chicken" saw tariffs fly faster than Fortune 500 companies relocated their supply chains, with both sides claiming to "win bigly."
What is the US-China trade war?
This decision by the Rigobon family created a mess in the basysitters cooperative.
What is babysitting too much?
This book reveals that nations fail not because of geography or bad luck, but because their leaders looked at the rule of law and said, "Nah, let’s try chaos instead."
What is Why Nations Fail?
This is the key difference between the 'short run' and the 'long run' from a macro perspective.
What is price flexibility?
This concept in growth theory suggests poorer countries catch up to richer ones—as long as they share similar savings rates, population growth, and borrow just enough tech to avoid looking like they’re copying homework!
What is conditional convergence?
This trade theory, big in the 16th to 18th centuries, was all about hoarding gold like a dragon and treating trade like a competitive sport.
What is mercantilism?
This investment strategy borrows in a low-interest-rate currency to invest in a high-interest-rate one, basically hoping exchange rates don’t ruin the party.
What is carry trade?
These are potential fundamental causes of economic prosperity
What are geography, culture, institutions, and, possibly, ignorance?
The Fed made this major mistake during the Great Depression—proving that sometimes doing the exact opposite of what’s needed really ties a crisis together!
What is tightening money supply in the middle of a recession?
What are high savings and export-led growth?
This comprehensive record keeps tabs on all the cash, goods, and IOUs flying in and out of a country—basically the world’s nosiest bank statement!
What is balance of payments?
This model dives into the messy reality of disequilibrium economies, trying to juggle full employment in one hand and a current account balance in the other, while everything else is on fire.
What is the BBNN framework?
This type of research design uses real-world events that act like Mother Nature’s randomizer button to figure out what causes what—perfect for when running a controlled experiment would be, you know, wildly unethical or impossible!
What is a natural experiment?
This happens when interest rates hit zero and the central bankers throw up their hands because everyone decides holding cash is cooler than doing anything productive with it.
What is liquidity trap?
These are the two key lessons from the Solow growth model.
- Countries cannot grow from accumulation of capital forever
- To keep growing in the long run, you need tech advancements
Because no amount of capital will save you if you’re still using fax machines!
This concept says a country can’t have it all—no stable exchange rate, free capital flow, and independent monetary policy at the same time. It's the economic equivalent of 'you can’t have your cake, eat it, and Instagram it too!'
What is impossible trilemma of macroeconomic policy?
This foreign exchange arrangement pegs a country's currency to a foreign one, with strict rules to back every unit of local currency in circulation, making central banks the ultimate 'no-fun' regulators.
What is currency board?
This key variable was the secret sauce Nobel Prize winners used to crack the code on how institutions cause economic prosperity
What is European settlers' mortality?