5 Economic Knowledges Worth Knowing

• "It has been said that in 1800, not one person in fifty living in England wore socks, but by 1900 not one person in fifty was without them.” source

• (# of dollars) x (velocity of money) = (real GDP) x (price level). This is an accounting identity and it explains why printing more money must cause inflation (except a little extra money must be printed each year if GDP rises or velocity falls)
• The Fed should pump in different amounts of money at different times. Why there is a variable demand, explained in terms of a baby-sitter co-op instead of a complex real economy: source

• (1 - % of lifetime spent working) x wage = \$ you can spend
$\large \dpi{150} \bg_white \left( 1-\text{\% of life spent working} \right) \ \cdot \; \mathrm{wage} \; = \; \ \text{ you can spend}$
• Angus Maddison’s history of the world economy and Brad Delong’s related charts

9 notes

1. bparramosqueda reblogged this from isomorphismes
2. isomorphismes posted this