Principles of Macroeconomics (Video)

Picture the economy as a giant supermarket, with billions of goods and services inside. At the checkout line, you watch as the cashier rings up the price for each finished good or service sold. What have you just observed?

The cashier is computing a very...

"Are you better off today than you were 4 years ago? What about 40 years ago?"

These sorts of questions invite a different kind of query: what exactly do we mean, when we say “better off?” And more importantly, how do we know if we’re better off or not?...

They say what matters most in life are the things money can’t buy.

So far, we’ve been paying attention to a figure that’s intimately linked to the things money can buy. That figure is GDP, both nominal, and real. But before you write off GDP as strictly...

In the last three videos, you learned the basics of GDP: how to compute it, and how to account for inflation and population increases. You also learned how real GDP per capita is useful as a quick measure for standard of living.

This time round, we’ll...

We know that there are rich countries, poor countries, and countries somewhere in between. Economically speaking, Japan isn’t Denmark. Denmark isn’t Madagascar, and Madagascar isn’t Argentina. These countries are all different.

But how different are they...

Here's a quick growth conundrum, to get you thinking.

Consider two countries at the close of World War II—Germany and Japan. At that point, they've both suffered heavy population losses. Both countries have had their infrastructure devastated. So...

On September 15, 2008, Lehman Brothers filed for bankruptcy and signaled the start of the Great Recession. One key cause of that recession was a failure of financial intermediaries, or the institutions that link different kinds of savers to borrowers.

We...

How would you like to pay $417.00 per sheet of toilet paper?

Sound crazy? It’s not as crazy as you may think. Here’s a story of how this happened in Zimbabwe.

Around 2000, Robert Mugabe, the President of Zimbabwe, was in need of cash to bribe his enemies...

Economic growth doesn’t happen at a steady pace; there are ebbs and flows. Prosperity on the national level depends on a country having good institutions in place. The factors of production – human capital, physical capital, and ideas – are also critical...

Spider-Man fans likely recall Uncle Ben advising his nephew, Peter Parker, that “With great power, comes great responsibility.”

As it turns out, that sage wisdom is also pretty applicable to the U.S. Federal Reserve System (aka the Fed). The Fed...