Macroeconomics
60 lessons in this hub.
The 2008 Global Financial Crisis
A clear-eyed economic narrative of 2008: subprime mortgages, securitization, leverage, the housing bust, and the policy response.
Lesson · Intermediate · 9 minAD-AS Equilibrium: Where Demand Meets Supply
The AD-AS model finds equilibrium where aggregate demand meets aggregate supply. Learn short-run vs long-run equilibrium and how shocks play out.
Lesson · Intermediate · 9 minAggregate Demand: Total Spending in the Economy
Aggregate demand is the total demand for domestic output at each price level. Learn why it slopes downward and what shifts it.
Lesson · Intermediate · 9 minAggregate Supply: What the Economy Can Produce
Aggregate supply shows output at each price level. Learn the upward-sloping short-run curve, the vertical long-run curve, and what shifts them.
Lesson · Advanced · 10 minAustrian Economics: An Introduction
The Austrian school — Menger, Mises, Hayek — sees the economy as a process of decentralized discovery. Learn spontaneous order, the business-cycle theory, and the knowledge problem.
Lesson · Intermediate · 7 minAutomatic Stabilizers: The Economy's Built-In Shock Absorbers
Unemployment benefits and progressive taxes cushion recessions without any new vote. Learn how automatic stabilizers work, why economists love them, and where they fall short.
Lesson · Intermediate · 9 minBank Runs: Causes and Prevention
Learn why solvent banks can collapse in days: maturity mismatch, depositor coordination failure, contagion — and the defenses societies built.
Lesson · Intermediate · 8 minBudget Deficits and Surpluses: Reading the Government Balance
A budget deficit means the government spends more than it collects. Learn how deficits are measured, why they rise in recessions, and when they signal danger — or sound policy.
Lesson · Foundations · 8 minBusiness Cycles: Expansions and Contractions
Economies cycle through expansion, peak, contraction, and trough. Learn the phases, what drives them, and why cycles are irregular.
Lesson · Foundations · 8 minWhat Central Banks Do
A tour of central banking: the core jobs every central bank performs, how they differ from commercial banks, and why independence matters.
Lesson · Intermediate · 9 minClassical Economics: Self-Correcting Markets
Classical economists from Smith to Ricardo argued that flexible prices guide markets back to full employment. Learn Say's law, the loanable-funds view, and the lasting insights.
Lesson · Foundations · 8 minThe Consumer Price Index (CPI): How It's Built
The CPI tracks a fixed basket of consumer goods and services. Learn how the basket is chosen, how the index is computed, and what it misses.
Lesson · Intermediate · 7 minCrowding Out: When Government Borrowing Squeezes the Private Sector
Deficit spending can push up interest rates and displace private investment. Learn the crowding-out mechanism, when it bites hardest, and the crowding-in counterargument.
Lesson · Foundations · 5 minDebt vs Deficit: The Flow-vs-Stock Distinction
Deficit and debt are constantly confused — even by politicians. Master the flow-vs-stock distinction once, and every budget headline becomes readable.
Lesson · Intermediate · 7 minDeflation: When Prices Fall Across the Economy
Deflation is a sustained fall in the general price level. Learn its causes, why economists fear it more than mild inflation, and the debt-deflation spiral.
Lesson · Advanced · 9 minDeflationary Spirals
Understand deflation's dark side: debt-deflation dynamics, the zero-bound trap, and why central banks fear falling prices more than mild inflation.
Lesson · Intermediate · 8 minDemand-Pull vs Cost-Push Inflation
Demand-pull inflation comes from too much spending; cost-push from rising costs. Compare their mechanics, symptoms, and policy dilemmas.
Lesson · Intermediate · 7 minThe Discount Rate and the Discount Window
Learn how central-bank lending to banks works: the discount window, the discount rate's role as a ceiling, stigma, and crisis use.
Lesson · Intermediate · 8 minDiscretionary Fiscal Policy: Stimulus Packages and Austerity
When governments deliberately change spending or taxes, that is discretionary policy. Learn how stimulus is designed, why austerity is controversial, and what the evidence says.
Lesson · Foundations · 9 minEconomic Growth: Expanding the Economy's Capacity
What long-run economic growth is, the inputs that drive it — labor, capital, productivity — and how growth rates compound over time.
Lesson · Foundations · 8 minFunctions of the Federal Reserve
Explore the Fed's structure and its core jobs: the dual mandate, supervising banks, providing financial services, and stabilizing the system.
Lesson · Advanced · 10 minFinancial Crises: Anatomy of a Meltdown
Learn the recurring pattern behind banking panics, asset busts, and debt crises — from Minsky's instability hypothesis to policy responses.
Lesson · Foundations · 8 minWhat Is Fiscal Policy? Government Spending and Taxation
Fiscal policy is how governments use spending and taxation to influence the economy. This lesson explains expansionary and contractionary policy, time lags, and the role of the government budget.
Lesson · Intermediate · 9 minFractional Reserve Banking Explained
See how banks keep only a fraction of deposits as reserves, lend the rest, and thereby create money — with a T-account walkthrough.
Lesson · Foundations · 9 minGross Domestic Product (GDP): The Basics
What GDP measures, how the expenditure approach (C + I + G + NX) adds up spending, and why GDP is the headline number for a country's economy.
Lesson · Intermediate · 8 minThe GDP Deflator: Measuring the Price Level
The GDP deflator converts nominal GDP to real GDP. Learn the formula (nominal/real × 100), a worked illustration, and how it differs from CPI.
Lesson · Intermediate · 8 minThe Limits of GDP: What the Number Misses
GDP ignores unpaid work, the environment, leisure, and distribution. Learn the main critiques and the indicators that complement GDP.
Lesson · Foundations · 7 minGDP per Capita: Output per Person
GDP per capita divides output by population. Learn what it reveals about living standards, when to use PPP, and its blind spots.
Lesson · Foundations · 7 minGovernment Spending: What It Is and How It Works
From schools and hospitals to roads and defense — learn the main categories of government spending, how it shifts aggregate demand, and how economists judge its effectiveness.
Lesson · Intermediate · 9 minHyperinflation: When Money Collapses
Study history's most dramatic monetary failures: what causes hyperinflation, how it destroys economies, and how it ends.
Lesson · Foundations · 8 minInflation: The Basics of Rising Prices
Inflation is a sustained rise in the general price level. Learn how it is measured, what causes purchasing power to fall, and who wins and loses.
Lesson · Intermediate · 9 minWhat Causes Inflation? Money, Demand, and Expectations
Inflation has several engines: money growth, demand pressure, supply shocks, and expectations. Learn each cause and how economists tell them apart.
Lesson · Intermediate · 8 minInflation Targeting by Central Banks
Learn the world's dominant monetary framework: explicit inflation targets, how they anchor expectations, and their track record.
Lesson · Foundations · 8 minInterest Rates: The Basics
Understand what interest rates really are: the price of borrowing, compensation for risk and time, and the anchor of the financial system.
Lesson · Intermediate · 9 minKeynesian Economics: Demand Drives the Economy
Keynes argued that economies can get stuck with high unemployment because demand falls short. Learn the General Theory's core ideas and why they still shape policy.
Lesson · Intermediate · 9 minMonetarism: Money Matters Most
Milton Friedman argued inflation is 'always and everywhere a monetary phenomenon.' Learn the quantity theory revival, the k-percent rule, and monetarism's lasting legacy.
Lesson · Intermediate · 9 minMonetary Policy: Expansionary vs Contractionary
Master the logic of monetary policy: how central banks use interest rates to steer demand, inflation, and employment — and the lags involved.
Lesson · Foundations · 8 minFunctions of Money in the Economy
Learn the four classic functions of money: medium of exchange, unit of account, store of value, and standard of deferred payment.
Lesson · Intermediate · 8 minThe Money Multiplier
Learn the textbook money multiplier formula, work a numerical example, and understand why the real-world multiplier is smaller and unstable.
Lesson · Foundations · 7 minMoney Supply: M1, M2, and How Money Is Measured
Understand the monetary aggregates M0, M1, and M2, what counts as money at each level, and why economists track the money supply.
Lesson · Intermediate · 8 minThe Multiplier Effect: How Spending Ripples Through the Economy
One dollar of government spending can raise GDP by more than a dollar. Learn the multiplier formula, what makes it big or small, and why it matters for every stimulus debate.
Lesson · Intermediate · 8 minThe National Debt: What It Is and Why It Matters
National debt is the accumulation of past borrowing. Learn how it is measured, who holds it, what it costs, and the real constraints on how much debt a government can carry.
Lesson · Intermediate · 8 minThe Natural Rate of Unemployment and Full Employment
The natural rate is the unemployment that remains even in a healthy economy. Learn what determines it, how it relates to full employment, and why it matters for inflation.
Lesson · Advanced · 9 minNew Keynesian Economics: Sticky Prices, Modern Foundations
Today's central banks run on New Keynesian models: optimizing agents, rational expectations — and sticky prices that make demand management work. Learn the modern synthesis.
Lesson · Foundations · 7 minNominal vs Real GDP: Stripping Out Inflation
Nominal GDP values output at current prices; real GDP holds prices fixed. Learn why economists prefer real GDP for measuring true growth.
Lesson · Foundations · 6 minOkun's Law: Output Gaps and Unemployment
Okun's law links GDP growth to unemployment: faster growth, fewer jobless. Learn the rule of thumb, why it works, and when it breaks.
Lesson · Intermediate · 8 minOpen Market Operations
Learn the central bank's main day-to-day tool: buying and selling securities to adjust reserves, steer the policy rate, and signal stance.
Lesson · Intermediate · 9 minThe Phillips Curve: Inflation vs Unemployment
The Phillips curve maps the short-run tradeoff between inflation and unemployment. Learn the original curve, Friedman's vertical long run, and why the tradeoff keeps shifting.
Lesson · Advanced · 10 minQuantitative Easing (QE) Explained
Understand large-scale asset purchases: why central banks buy long-term bonds, how QE eases conditions, and its side effects.
Lesson · Intermediate · 8 minReal vs Nominal Interest Rates
Learn the Fisher relationship: nominal rates minus inflation equals real rates — and why real rates drive economic decisions.
Lesson · Foundations · 7 minRecessions: What They Are and Why They Happen
A recession is a broad decline in economic activity. Learn the definitions, common causes, key features, and how recessions differ from depressions.
Lesson · Intermediate · 7 minReserve Requirements
Understand required reserve ratios: what they are, how they constrain banks, why they amplify policy — and why the Fed set them to zero in 2020.
Lesson · Advanced · 9 minRicardian Equivalence: Do Deficits Even Matter?
Robert Barro's famous proposition: deficit-financed tax cuts change nothing, because households save for the future taxes. Learn the logic, the assumptions, and why it usually fails.
Lesson · Intermediate · 8 minStagflation: Stagnation Meets Inflation
Stagflation combines rising prices with a stagnant economy. Learn how supply shocks create it, why it confounds policy, and the lessons of the 1970s.
Lesson · Intermediate · 8 minSupply-Side Economics: Growth Through Incentives
Supply-siders argue growth comes from the supply side — lower marginal tax rates, deregulation, and investment incentives. Learn the theory, the Laffer curve, and the evidence.
Lesson · Intermediate · 8 minTypes of Taxes: Progressive, Proportional, and Regressive
Not all taxes treat rich and poor alike. Compare progressive, proportional, and regressive tax structures, and see how income, consumption, and wealth taxes differ in practice.
Lesson · Foundations · 7 minTaxation Basics: How Governments Raise Revenue
Taxes fund everything governments do. Learn the main types of taxes, what makes a good tax system, and how taxes shape incentives and aggregate demand.
Lesson · Advanced · 10 minThe Taylor Rule: A Guide for Policy Rates
Meet the most famous monetary-policy rule of thumb: how the Taylor rule prescribes rate responses to inflation and output gaps.
Lesson · Foundations · 7 minUnemployment: Measuring Joblessness
The unemployment rate is unemployed ÷ labor force. Learn who counts as unemployed, what the labor force is, and how the rate is measured.
Lesson · Intermediate · 8 minTypes of Unemployment: Frictional, Structural, Cyclical
Not all unemployment has the same cause. Learn frictional, structural, cyclical, and seasonal unemployment — and why the distinction matters for policy.