Ask HN: What are you reading to make sense of the economy?
337 points by 8611m 5 years ago | 303 comments- DanielBMarkham 5 years agoMaking sense in what fashion, to what end? Investment opportunities? Proposed public policy changes? Where to look for a job?
To a large degree the economy is unknowable. That's why you can get two economists in a room and receive seven opinions. Don't get me wrong; there's good value there. It's just that economics is an odd mix of philosophy and math. On my more cranky days I call it astrology for people who know calculus.
If the economy were knowable to the degree that some economists claim to know it, they'd all be billionaires. So my advice is to scope down your question to something a bit more workable.
- tomrod 5 years agoEconomist here. Mostly agree with this sentiment.
I listened to the National Association of Business Economists webinar yesterday presenting survey expectations for Q2. To say there was difference in opinions is an understatement. Opinion ranged from barely any impact to 50% GDP loss (annualized, so 1/4 of that for a quarter).
You hear economists say things like "guns and butter do well in recessions." The same idea applies here: what do people need during this time? That is what creates the market.
Outside of that, my only thought is don't pay attention to the short run volatility of the stock market as an indicator for long run economic outcomes.
- DanielBMarkham 5 years agoI like what I heard Tyler Cowen say a long time ago: a degree in economics is a great way to learn about a lot of ideas that sound good but don't work. (I'm paraphrasing, of course)
I thought his point was great. There's some well-trodden ground in economics. If you learn nothing more but where the alligators are, you're probably going to do a lot better on that trip through the swamp you plan on taking. If nothing else, it tends to elevate the conversation.
- thorwasdfasdf 5 years agoLet's be a bit more specific here before people get the wrong idea. Economics doesn't work for predicting the stock market. Other than that, it works just fine. The principals of supply and demand and huge host of other issues are just fine and work great. It just doesn't translate to predicting equities.
- tomrod 5 years agoTyler is a gem.
- thorwasdfasdf 5 years ago
- DanielBMarkham 5 years ago
- jotakami 5 years agoI believe this sentiment is mostly a symptom of the extreme prevalence of charlatans who use economics as a marketing tool rather than a social science.
Economics is really just accounting, statistics and psychology. But mostly accounting. I think people get really worked up about the “unknowable” parts and fail to see that accounting can open up tremendous insights if we only take the time to understand it well.
If you want to learn about economics for some specific money-making purpose, you’ll probably end up with an incomplete view that frustratingly fails to describe reality most of the time. On the other hand, if you approach the subject simply with an open mind seeking understanding, you will be richly rewarded with deep insights about the structure of society and the human condition.
- xenocratus 5 years agoAfter reading quite a lot about economic policies it sounds a lot like some sort of engineering - you have some levers/gadgets that you can use, but you have to understand the consequences of each of them and how the interact with the "real world" of companies and people participating in the economy.
Sure, people being certain about what's going to happen and when is akin to snake oil, but using good insight and tools to try and control how people are affected by something like a pandemic seems to me to be the role that economists need to play.
- caseysoftware 5 years agoThat's the Keynesian view where you can move a lever (cause) and measure the changes (effect).
Unfortunately, there are way too many variables, interactions, etc, etc to have any real confidence in those measures. It's further complicated by the idea that the normal tools (primarily interest rate & money supply delivered via subsidies, etc) are beyond their "normal" operating ranges.
When the Fed rate was 5% and loans were 8%, lowering rates encouraged borrowing. When the Fed rate is 0.25% and loans are 3-5%, qualified people can get all the money they want.. now what? Do they give money to people who can't pay it back (mortgage crash) or spend it on "shovel ready projects" which take 12-18 months to get started?
Alternatively, when consumer spending makes up 70%+ of the economy, consumer confidence is probably the single most important metric.
This is less engineering and more psychology at scale.
- jotakami 5 years agoThat’s why I say it’s mostly accounting—you have to convert reality into quantities before you can engineer it, and accounting is the set of rules for measuring and manipulating those quantities. The difficulty lies in the fact that unlike physics, where units are essentially hard-coded into the fabric of reality, the unit in accounting is money which is a social construct.
- caseysoftware 5 years ago
- xenocratus 5 years ago
- smoyer 5 years agoMy favorite fight between two economists - https://www.youtube.com/watch?v=GTQnarzmTOc
- ghostpepper 5 years agoThis is actually a sequel to the first "Keynes vs Hayek rap battle"
- smoyer 5 years agoYes it is ... I like the second video better but I should have mentioned the first as context.
- smoyer 5 years ago
- PopeDotNinja 5 years agoThat was excellent.
- smoyer 5 years agoWe certainly need more educational materials like this - especially in this time of social-distancing. I'm on the board of a small Christian high school and the teachers and students need materials that can be shared via Zoom/Teams/etc. A video like this starts the engagement for everyone and makes it easier to have the follow-on discussion. Plus it's entertaining but the message actually highlights the two mind-sets pretty well!
- smoyer 5 years ago
- ghostpepper 5 years ago
- aqqTwxye 5 years agoEconomists do not claim to know the economy, much less to the point of becoming rich. They are far more likely to insist that nobody can know such thing. You must be thinking of somebody else.
- hn_throwaway_99 5 years agoHardly. Economists may believe in the idea, for example, that you can't time the market, but I have yet to meet an economist who doesn't have very strong ideas about the types of policies or interventions that are good for bad for the economy, and again it often feels like you get 10 economists in a room and you get 10 different diverging opinions.
- wdfefgrucg 5 years agoFirst, strong opinions are not knowledge. In the event that one economist forgets that, the other nine will remind him of it. But that's hardly the case right now. There's a lot of discussion on what should be done right now on the part of economists, but it's very clear that nobody is quite sure of what to do. Which is why there is so much discussion in the first place.
Second, knowledge about the economy, specially such that all could become "billionaires", is empirical knowledge and knowledge of particulars such as knowledge of when to time thr markrt. Economists have some conjectural and general knowledge regarding some policies which leads the profession to develop something akin to a consensus on certain issues (10 out of 10 is really a gross exaggeration), such as rent controls. But there has never been a proposition in economics which hasn't found defenders against any supposed consensus, specially nowadays, with the incentives to publish surprising results, and most are conscious of it. The issue with the comparison with any sort of divination is that economists do not claim to be good forecasters.
- 5 years ago
- aguyfromnb 5 years ago>but I have yet to meet an economist who doesn't have very strong ideas about the types of policies or interventions that are good for bad for the economy
I have yet to met a person on the street who doesn't have strong opinions about what economic principles should be implemented.
>it often feels like you get 10 economists in a room and you get 10 different diverging opinions.
I don't understand why this is a bad thing. Progress is made by exploring diverging theories.
- wdfefgrucg 5 years ago
- caseysoftware 5 years agoDistinguished Professor of Economics at the Graduate Center of the City University of New York and winner of the Nobel in Economic Sciences Paul Krugman would disagree with you. He's full of economic pronouncements going as far as when markets are going to crash (immediately) and their specific cause (Trump elected).
You can make the case that as a columnist, he's encouraged to make predictions but most Keynesians believe in direct cause -> effect of policy decisions based on a handful of metrics that properly describe the economy as a whole.
- dlp211 5 years agoKrugman walked that back and apologized and reflected on the fact that he to is human and liable to let his emotions get a hold of him.
- dlp211 5 years ago
- hn_throwaway_99 5 years ago
- fartcannon 5 years agoI just call it history. All these models describe what happened before. And that's all they do.
- lonelappde 5 years agoNo they don't. They guess at what happened before.
- lonelappde 5 years ago
- ashtonkem 5 years agoThen there's the "to what end" part. What decisions are you trying to make with economic advice? Because unless if you're going to make a decision with that information, all it's going to do is freak you out for no benefit.
- aguyfromnb 5 years ago>If the economy were knowable to the degree that some economists claim to know it, they'd all be billionaires.
The number of professional economists who focus on investing, or even "the economy", is much smaller than most people imagine.
- ericmcer 5 years agoPhilosophy, Math maybe some mysticism as well? Beyond that you can't even have a productive discussion about the economy without framing the discussion in humanity and what purpose a society serves. For example if we push forward UBI are we doing that for productivity? human happiness?
With our current crisis trying to discern what worldview policy is trying to force the economy to serve helps me understand decisions, especially with regard to things like inflation, consumer confidence, greed/fear, etc.
- pinky1417 5 years agoAgree 100%. The whole reason why market economies - economies based on the decentralized mechanism we call "prices" - work better than any other economic system is because they're decentralized. If one person or group of experts could know the current wants/needs of millions of individuals, we wouldn't need prices and that person/group could predict the direction of the economy.
Similarly, say all you care about is predicting a recession since that's going to risk your job/business/personal finances etc. As far as I know, there's no way to predict a recession until after you're already in one. Sure, a yield curve inversion has preceded every recession in the past ~50 years, but (1) that's only ~5 recessions (2) the inversion has taken place up to 33 months prior to recession and (3) as the Great Recession taught us once again, just because something has been true for many years in the past (housing prices always going up) doesn't mean it'll hold true in the future.
Macroeconomic forecasting is by and large nonsense. The PhD chief (macro)economists from big banks you see on CNBC will, at best, identify some recent trends that could cause the economy to change if said trends continue and, at worst, prognosticate. I wouldn't describe myself as an "economist" since I only hold a bachelor's of science in economics, but the prognosticators do a tremendous disservice to themselves and to the practice of economics.
So should you ignore all economic news and analysis?. No. You might be able to make some vague, general, long-term forecasts, like how I believe that the US economy will remain a major economic power 20 years from now (hence why I'm comfortable squirreling away cash into S&P 500 Vanguard index funds) and that Amazon will probably be a major company for most or all of that period, but I don't pretend to know whether inflation will be below 2% for any fraction of that period, if self-driving cars will replace Uber drivers, or if China's per-capita GDP will exceed that of the US.
You have to be careful to identify what's not knowableeven when everyone else believes that something is knowable. When I did debate in high school (circa mid-late 2000s), we had a topic on whether the US government should increase investment in alternative fuels. Many arguments in favor relied on the assumption that oil prices would continue to rise. Some experts debaters cited even suggested the world had already reached "peak oil." Judges were receptive since they were paying $4.00/gallon for gas. Now, of course, if oil is a finite resource and our consumption/drive habits remain the same, oil prices will have to rise eventually without alternative fuels. But few people, including me, (at least few people who got media attention) realized that the then-high oil prices were both (1) inducing previously cost-prohibitive US oil extraction and (2) weakening the incentive of OPEC's members to keep production low. That was a lesson to me: conventional wisdom about the economy, even "wisdom" from "experts" in a segment of the economy, can be wildly inaccurate.
P.S. hot take: while it's clear that humans can and have changed the climate, it's not clear what the tangible effects will be... so while some investment in mitigation may be warranted (especially with respect to obvious pollutants), we should be careful not to incur massive costs today on the assumption that say, Miami will definitely be underwater in 50 years.
- aguyfromnb 5 years ago>That was a lesson to me: conventional wisdom about the economy, even "wisdom" from "experts" in a segment of the economy, can be wildly inaccurate.
Conventional wisdom is wrong about all kinds of things, all the time. "Forecasts have been wrong, therefore forecasting is pointless" is the wrong lesson to take.
- pinky1417 5 years agoBoth of your statements are true. However, I feel it would be a misrepresentation or, at least, a misunderstanding to say I suggested that "forecasts have been wrong, forecasting is pointless."
Perhaps I'm misunderstanding your reply or I wasn't clear in my original post. The history of failure of expert consensus forecasts is one reason why we should be highly skeptical. That's why I said such a forecast, and you yourself quoted, "...can be wildly inaccurate" and not, as you suggest I said "...is pointless."
Macroeconomic forecasting is indeed pointless, but for a different reason. Some might say it's pointless because the economy is a (1) complex and (2) chaotic system. The economy is indeed complex and chaotic, but so is the weather... and we can forecast the weather with accuracy and precision macroeconomic forecasters drool over. The economy has two additional and overlapping factors making forecasting effectively impossible: (3) two-way causality between the forecast and the economy (the forecast is based on the predicted behavior of individuals and individuals will change behavior depending on the forecast) and (4) the free will of humans.
- pinky1417 5 years ago
- aguyfromnb 5 years ago
- oso2k 5 years ago
This is the quote of the year, as far as I'm concerned.It's just that economics is an odd mix of philosophy and math. On my more cranky days I call it astrology for people who know calculus. - lucasps99 5 years agoreply one
- tomrod 5 years ago
- sambarina 5 years ago"All" you have to do is watch "How the economic machine works (in 30 minutes)" by Ray Dalio: https://www.youtube.com/watch?v=PHe0bXAIuk0
Read his insights and watch his interviews. That's a good basic start. Everything more then that: Nobody really knows.
I have read countless of books, but one thing you have to know:
It is a market - period. Something has value just because another person wants to buy it (at a given price). That's basically all there is. If you think that some asset is worth more in 10 years then it is now - buy it.
The "markets" go heavily up and down currently. That's just because different people price in the current health crisis in different ways.
- sideshowb 5 years agoFor a longer term read I'd recommend Hill & Myatt, the Economics Anti Textbook. It's a fair introduction to Economics 101 but at the same time provides more in depth critique than an introductory book usually would, of where Economics 101 fails, and how it tends to get over-applied in policy.
Ha Joon Chang, Economics: the Users Guide and 23 Things They Don't Tell You About Capitalism (don't dismiss it as an anti-capitalist treatise, it's not) are also good, lighter weight (unlike Hill & Myatt no maths) but give an overview of the different schools of economics and what can be drawn from each.
- ipnon 5 years agoA great follow up in the "New York billionaires explain basics of the economy" curriculum:
William Ackman: Everything You Need to Know About Finance and Investing in Under an Hour | Big Think [0]
Covers the money making, Wall Street side
- manishjhawar 5 years agoI found this recent interview [0] of his by TED to be quite insightful.
- war1025 5 years agoI got about halfway through Principles when it came out and eventually gave up on it (had newborn twins at the time).
Was having a slow morning here so your comment led me on an hour and a half of checking out that video and some of his other content.
His videos seem a lot more approachable than the book.
- yamrzou 5 years agoI wish there was a book (or even video lectures) that goes more in depth, but with the same style as that video.
- edsykes 5 years agoNot in the same style, but this is the research that the video summary is based upon. https://www.principles.com/big-debt-crises/
It's free
- edsykes 5 years ago
- sideshowb 5 years ago
- vmurthy 5 years agoIt helps to know what "making sense" means to you? If it means "Will my job be safe for the next 12 months", the reading will be different.
If it means "What 10-15 stocks are poised to give me great returns in the next 5 years", the reading will be different (this would be sector reports, 10-Ks etc)
If it means "how can I ensure that another economic shock won't destroy my wealth or plans for FIRE", the reading will be different.
FWIW, I am finishing up a book called "Contagion" [0] (not the fiction one ) and should start reading "Pale Rider" [1] about the 1918 pandemic. I've found that history offers guidance and opens your mind to possibilities thus offering solace.
[0] https://www.amazon.in/Rules-Contagion-Outbreaks-Infectious-D...
[1] https://www.amazon.in/Pale-Rider-Spanish-Changed-World-ebook...
- selimthegrim 5 years agoFor a second I thought you were mentioning Pale Horse, Pale Rider
- selimthegrim 5 years ago
- dacohenii 5 years agoNot reading per se, but I've listened to Marketplace podcast [0] almost daily for years at this point, and I find it invaluable for economic news and interpretation -- especially now.
Also recommend Marketplace's podcast Make Me Smart [1], which is an informal deep dive on a single subject. It's nominally a weekly podcast, but they're now releasing a 10-minute daily version.
Finally, NPR's Planet Money [2] and their daily podcast The Indicator [3] are entertaining and education as well.
[0] https://www.marketplace.org/ [1] https://www.marketplace.org/shows/make-me-smart-with-kai-and... [2] https://www.npr.org/podcasts/510289/planet-money/ [3] https://www.npr.org/podcasts/510325/the-indicator-from-plane...
- jldugger 5 years agoHonestly, I find Marketplace's obsession with politics annoying. IDK if they just have an easier time sourcing interviews from government officials because public radio or something, but it feels like even in times of non-distress they lean heavy on policy and lean on actual markets.
Look at the non-COVID Make Me Smart topics as an example:
- Housing policy - Corporate social responsibility - food policy to fight global poverty - the equal rights act - facebook and US elections - regulating the internet with section 230 - an interview with a senior politico editor about the school-skills-jobs pipeline - why private equity needs to be regulated
That said, I do appreciate the Marketplace interviews with 'regular small business owners' Marketplace has been doing lately. Ranchers, Mississippi freighters, factory operators, etc.
In terms of other podcasts, Bloomberg's Odd Lots podcast[1] is a nice long form podcast with subject matter experts. Their guests also likely have a political agenda, but you at least get exposed to the inner workings of a market. A recent pair of podcasts provides a good example: a few months ago they talked with a guest about an unusual feature of Korean retail banking, the structured note. They provide investors--primarily retirees--a fixed 7.8 percent return if the market doesn't drop by a huge margin. Otherwise, investors are stuck with the return of the underlying benchmark (which is down a huge margin). Well, last month exactly that exact tail risk scenario triggered, and they brought the guest back on to further discuss how this compares with previous bank crisis episodes.
- _curious_ 5 years ago"I find Marketplace's obsession with politics annoying" Same - seems shallow.
- _curious_ 5 years ago
- jldugger 5 years ago
- passer_byer 5 years agoConsider a subscription to the British newspaper The Economist. It began publication in 1848 in protest against the British corn laws. The writing is superlative written with a rather sly sense of humor.
In particular, they collect and graph enormous amounts of data to augment their articles. It's much better than random posts found on the internet.
- kiliantics 5 years agoI think the economist is great in how broad the coverage is, it's a great way to keep up with what's happening around the world. But it tends to have a very ideologically driven narrative, I think of it as basically neoliberal propaganda, so I always read it with a hefty helping of salt.
- sanderjd 5 years agoIt isn't neoliberal propaganda, it is just editorially neoliberal. Having some particular editorial voice does not make something propaganda. Similarly, there are many magazines that are editorially progressive or socialist or any number of things, and are also not propaganda. Maybe this is all you meant, but if so, I don't think it is a useful definition of the word "propaganda".
- sanderjd 5 years ago
- jazzyk 5 years agoVery well written indeed, unfortunately owned by globalists since 2015 (check out the ownership change, if you are interested [1])
I had been an avid reader for 30 years, cancelled my subscription around 2015-2016, and I was not even aware of the new ownership at the time, I just sensed the change of their ideological orientation and did not like it one bit.
- Nasrudith 5 years agoWhat? They bought up another company in 2015. Not the other way around. Why would that even be a bad thing?
- jazzyk 5 years agoPlease read carefully.
The Agnelli family owns 43.4%, members of the Rothschild family own 21%, other big corporate/rich families interests own the rest. Lots of "Sirs", "Ladies" and "Baronesses" on the board of directors, as you can see below.
From the Wikipedia page:
Pearson PLC held a 50% shareholding via The Financial Times Limited until August 2015; at that time Pearson sold their share in the Economist. The Agnelli family's Exor paid £287m to raise their stake from 4.7% to 43.4%, while the Economist paid £182m for the balance of 5.04m shares which will be distributed to current shareholders.[2] Aside from the Agnelli family, smaller shareholders in the company include Cadbury, Rothschild (21%), Schroder, Layton and other family interests as well as a number of staff and former staff shareholders.[2][3]
The current members of the board of directors of The Economist Group are: Rupert Pennant-Rea (Chairman), Zanny Minton Beddoes (editor-in-chief of The Economist), Lady Suzanne Heywood, Brent Hoberman, Sir David Bell, John Elkann, Alex Karp, Sir Simon Robertson, Lady Lynn Forester de Rothschild, Chris Stibbs and Baroness Jowell.[12]
Lady Lynn Forester de Rothschild publicly supports many politicians including Hillary Clinton.
- jazzyk 5 years ago
- rch 5 years agoI noticed the change as well, but didn't think to investigate. Thanks for surfacing this information.
- zie 5 years agoso where do we go now?
- sanderjd 5 years agoI'm confused by this thread: I've been reading the Economist since quite awhile before 2015 and I don't think its editorial stance has changed significantly; it has always been pro-globalism, pro-trade, pro-market, generally what I'd describe as neoliberal. If anything, the shift I detected in their views was toward more government intervention and regulation, coming out of the great recession. I'm very skeptical of the idea that there was an inflection point toward globalism in 2015.
So to answer your question: if you want what the Economist gives, you don't need to go anywhere else.
- sanderjd 5 years ago
- Nasrudith 5 years ago
- kiliantics 5 years ago
- jotakami 5 years agoWhere to begin? I’ve been reading about economics for about 15 years, and I have to say that this crisis has brought a level of clarity about certain economic truths that I never would have seen otherwise.
First: accounting. I got an MBA five years ago and accounting was my favorite subject because it is behind everything that a business does. Accounting is the instrumentation that allows humans to organize their activity across tremendous scale and complexity and still be confident that they are producing value (making a profit). In the modern economy, accounting is everything. Try reading Jerome Levy’s “Where Profits Come From” to check your accounting chops: https://www.levyforecast.com/assets/Profits.pdf
- twomoretime 5 years agoInteresting take on accounting - I've never understood why anyone competent would be drawn to it.
- jonahbenton 5 years agoShould be the top comment. Accounting is everything. It is the physics of the economy.
There is a common fiction to money matters that everyone has to share- whether or not they know it- and the language in which that fiction is written is accounting.
- _curious_ 5 years ago"There is a common fiction to money matters that everyone has to share- whether or not they know it- and the language in which that fiction is written is accounting."
Poetic.
- _curious_ 5 years ago
- twomoretime 5 years ago
- yaa_minu 5 years agoI'm surprised no one has mentioned Basic Economics[1] by Thomas Sowell.
It's a fairly detailed book but it's worth the time. If you're too busy to read a whole book, you might want to take a look at "Economics in One Lesson" [2] by Herny Hazlitt.
The foundation for economic education[3] has some great articles too about economics and public choice.
[1]https://www.amazon.com/Basic-Economics-Thomas-Sowel/dp/04650... [2] https://fee.org/media/14946/economicsinonelesson.pdf [3] https://fee.org
- chrisco255 5 years agoReal Vision Finance by Raoul Pal and others. They are a subscription based macro-finance and economic analysis platform with some of the highest quality interviews I've ever seen on this subject. Raoul and his team are great synthesizers and do a great job at pulling in people from different disciplines and specialties. They release daily updates and have an interview catalog going back several years. They have many free videos on their YouTube channel but I pay for the subscription and it's been well worth it. Check out their YouTube channel:
- oDot 5 years agoThe only school that has any explanation for this is the Austrian School of Economics. Their theory of the business cycle is the reason they successfully predict every crisis to the tee (except for timing, no one can do that), while other economists are just blown away in surprise that it even happened.
Mises and Hayek wrote big and hard to read books about it, but two that explain this to the layman are "Meltdown" by Tom Woods[0] and "How An Economy Grows And Why It Crashes" by Peter Schiff[1]. The first is an explanation using the 2008 crisis, and the second is a very amusing yet educating economy lesson told as a kids' story.
Another book that can help grasp this, although I wouldn't read it first, is "The Forgotten Depression: 1921: The Crash That Cured Itself" by James Grant.
If you're interested in the actual business cycle theory, Tom Woods explained it briefly while promoting Meltdown. Explanation starts 14:03:
https://youtu.be/NBwJm68FkMc?t=844
[0] https://www.amazon.com/Meltdown-Economy-Tanked-Government-Ba...
[1] https://www.amazon.com/How-Economy-Grows-Why-Crashes/dp/B004...
- fanzhang 5 years agoThe Austrian School seems to have been wrong about the last 15 years' money printing causing inflation. In particular, the general Austrian school would have predicted a lot more inflation by now. The prediction on this has fared so poorly that the last 15 years has given rise to a school nearly diametrically opposite to the Austrian school: modern monetary theory. (My understanding of the Austrian response to this is some amount of semantic contorting: "well... let's define inflation this way and there is inflation... or will be... lots of it!")
Also, current consensus, of course among mainstream economists, is that countries that more believe the Austrian school, like Germany, has caused unneeded pain on themselves/their neighbors by advocating of austerity versus stimulus during downturns. If you want the mainstream steelman against the Austrian school, you can search Paul Krugman's take on them.
- Qasaur 5 years agoThis kind of rebuttal to the Austrian school is often based upon a misguided idea of monetary neutrality. Inflation does not happen everywhere in the economy at the same time - this is called the Cantillon effect and is a central pillar of Austrian Business Cycle Theory.
You are right, there is very little inflation in the consumer price index (at least nominally), but there is a significant amount of inflation in assets and other parts of the economy that are relatively close to the central bank/printing press. Inflated Silicon Valley salaries, maintained by an influx of VC money bidding up the price of labour, are a great example of this.
- jeffreyrogers 5 years agoI think there is a lot of inflation if you measure it properly. We say inflation is low because we adjust for quality. So they say sure, a car costs more now than in 2000 but it has more features so if you adjust for quality it is cheaper. Same goes for other goods like computers, smartphones, etc. The problem is, the cheaper versions of these goods don't exist anymore, because the more expensive version is effectively required to not handicap yourself.
Similarly, things like housing, healthcare costs, schooling costs, etc. are not well captured by the inflation metric, but have grown wildly in the last few decades.
The purchasing power of the average person is probably worse now than it was in 2007 if you look at what people actually have to spend money on versus the artificial basket of quality adjusted goods used to measure inflation.
- jennyyang 5 years agoThe government changed the way they measured inflation to purposefully downplay it. For example, if they were measuring the cost of Levi's jeans, and they went up too high, they would replace them in their index with cheaper non-name brand jeans to show that inflation didn't occur.
And same thing goes with groceries. When ice cream used to be a pint, it's now 14 oz. They have decreased the size of things like food packages over the last 15 years, and I don't think that's taken into consideration in the inflation index. Recently they decreased the size of orange juice by 15% but kept the price the same. That is the definition of inflation.
- vertak 5 years agoI recently read of an alternate measure of inflation called the "Cost of Thriving Index" which aimed to capture the astute point you're making. See page 18 of this document:
https://media4.manhattan-institute.org/sites/default/files/t...
I'm not economist but I've found this captures the feeling that although we're more productive and wealthier, it still feels harder to get ahead and live an average life.
- jennyyang 5 years ago
- ghastmaster 5 years agoAre you aware of the stock market, housing market, bond market, precious metals? Asset price inflation absolutely is happening. The FED up until now was able to keep the CPI increases fairly low even though they were creating trillions of dollars, because the money was locked into assets. This has had a severe effect on anyone in the market for these assets that have risen.
- eru 5 years agoHow do the assets lock up money?
The stock market, no matter how enormous it's market cap, doesn't lock up any money. When I pay through the nose for Tesla stock, the other fellow then has some money that he either has to spend or park somewhere.
- RobertoG 5 years agoI though that, from the Austrian perspective, the stock market would be one of the last things to see inflation. Are not suppose the prices of stocks reflect the aggregate infinite wisdom of the market?
- eru 5 years ago
- chrisco255 5 years agoIf you're talking about the U.S. that's mainly due to our reserve currency status and nothing else. And the money printing has driven certain sectors higher even in the face of low / stagnant growth. Stocks, real estate, etc being some of them.
But you gotta understand that we export a great deal of our inflation. One day those dollars will come home to roost, but until then, Germany's balance sheet looks a hell of a lot better than the U.S.'s. going into this recession. Our deficit is already $3 trillion this year and climbing rapidly, with debt levels reaching their highest in relative terms since World War 2. And we haven't even scratched the surface of this deep recession yet.
- eru 5 years agoThe American Dollar was the world's reserve currency in the 1970s as well. They still managed high inflation.
The subdued American inflation despite QE has a more technical and contingent explanation: the Fed started paying Interest on Excess Reserves (IOER) in 2008. Ie they reward banks for keeping the money they are printing out of the economy.
Most of the time since then, the interest on short term US government bonds hasn't been much higher than the interest on excess reserves. So there hadn't been much aggregate economic impact when the Fed bought government bonds with new money.
The banks slightly preferred excess reserves over government bonds, because they regulators preferred them.
The QE was 'sterilized' by IOER.
- RobertoG 5 years agoThat sounds like a very ad hoc explanation, what about Japan then?
- eru 5 years ago
- AnimalMuppet 5 years agoKrugman's going to supply your steelman? Sorry, no. Krugman has a Nobel, but when he writes (at least for the last decade or two), he does so primarily as a propagandist, and secondarily (if at all) as an economist.
There's plenty of actual mainstream economists that can give you steelman responses to Austrian Economics. Don't go get them from Krugman. You won't get good steel from him; it will have too much straw in it.
- TheColorYellow 5 years agoWho would you point out as a steelman? I'd love to find a proper, thorough critic of the Austrian school.
- TheColorYellow 5 years ago
- hutzlibu 5 years ago"is that countries that more believe the Austrian school, like Germany"
As a german, this is news to me. Austrian school stands mostly for a free market without or as little as possible state interventions and regulations: a idea very frowned upon here generally and usually rather associated with the US
- Qasaur 5 years ago
- IAmGraydon 5 years ago> Their theory of the business cycle is the reason they successfully predict every crisis to the tee (except for timing, no one can do that), while other economists are just blown away in surprise that it even happened.
A prediction without timing is no prediction at all.
- rjtavares 5 years agoAlso, I fail to see how an economic theory can predict a depression caused by a pandemic...
- oDot 5 years agoThis crisis was not caused by the Corona virus. It is only the pin that burst a bubble that was already there, and if no virus would have happened, something else would have burst it. Austrians see the depression as a necessary correction, and the bubble as a problem.
I actually sat down for a few hours to calculate what would have happened if this pandemic happened in the 50s, and no one could work (especially true since there was no internet). Seems like people saved enough for a year at home, on average. Today people are so levered up not only do they not have savings, they have to pay back debt.
- toshk 5 years agoIsn't that the whole essence's of Nassim's Taleb work? He actually makes the opposite claim, that a model that doesn't takes extreme events into the equation is not worth anything at all.
- oDot 5 years ago
- sametmax 5 years agoI predict it will rain after a sunny day.
Some day.
- oDot 5 years agoThen you should buy umbrellas, and not listen to people saying it'll be sunny forever.
- oDot 5 years ago
- oDot 5 years agoIt definitely is. The Austrians are very prepared for this crisis, and it seems like it was useful to some people shorting in 2006-2008.
- ace32229 5 years agoThe Austrian school predicted a disease-related economic crisis?
- IAmGraydon 5 years agoIn what ways are they more prepared for this crisis than anyone else?
- ace32229 5 years ago
- rjtavares 5 years ago
- nicoburns 5 years agoThe best theory I've seen for crash cycles is:
1. The establishment encourages making credit widely available in order to pacify the less well off who would otherwise demand a better deal out of the social contract.
2. This leads to unsustainable debt, as people are forced into borrowing to meet basic needs with no means to pay it back.
3. Eventually this comes to a head as people begin to default, causes a cascading chain through the economy as people are unable to meet their obligations, leading to crash.
4. At which point, governments step in and debt is forgiven, correcting the imbalance created in step 1.
Seemed to make a lot of sense to me. And the interesting thing is that it suggests a solution: replace widely available credit with direct wealth redistribution and you end up with the same net effect (as the debts are being forgiven in the end anyway), but without the destructive boom-bust cycles.
- oDot 5 years agoThe establishment you describe in step 1 is the government. Wall street could not do what they do now without government involvement. They will run out of money, and have to suffer the losses of the bad loans they make, instead of relying on the Fed to save them by depreciating the money of regular working people.
- nicoburns 5 years agoAgreed. Although one might note that those involved in wall-street are highly likely to be amongst those voting for conservative governments that are enacting these policies.
- nicoburns 5 years ago
- smnplk 5 years agoThe way I see it, it's the cheap money problem. Big businesses with lots of capital are incentivized to borrow cheap money and make stupid investments with that borrowed money.
- Scea91 5 years ago> 2. This leads to unsustainable debt, as people are forced into borrowing to meet basic needs with no means to pay it back.
People borrow for much more than basic needs and they do so voluntarily without anyone forcing them. This does not substantially affect your logic, but I think lots of the blame for mismanaging debt lies at the people in debt themselves.
- nicoburns 5 years agoHmm... they do, but this is actively incentivised with low interest rates, which directly inventivise borrowing, and also have secondary effects, such as easily available mortgages leading to increased house prices, which leads to further borrowing.
You can also see this in student loans. Sure, people volutarily choose to take them out. But this is because they live in a society where access to a lot of jobs is gated on having a degree, and degrees are so expensive that a loan is the only option more often than not.
- ianleeclark 5 years ago> People borrow for much more than basic needs and they do so voluntarily without anyone forcing them.
People can be forced without there being an "anyone" to do the forcing. Being underemployed in some expensive city, unable to make your next car payment that you need to get to your job doesn't require an "anyone" to force that person into a loan at gunpoint. They're still being coerced into that decision, even if there isn't an "anyone."
- nicoburns 5 years ago
- eru 5 years agoHow does step 2 work? Are the creditors fools?
- oDot 5 years ago
- hn_throwaway_99 5 years agoLol, I'm not as familiar with some of the other economists, but these days I'm always amused by the bloviating of Peter Schiff when I hear him on TV.
The biggest thing I find incomprehensible is this belief that when a recession or crisis hits, you have to let pretty much everything go to shit so the bad firms can get wiped away and better, more innovative firms can take their place. On the face of it, that is very reasonable, and I certainly worry about the moral hazard of bailout after bailout.
But at the same time, Schiff seems to incomprehensibly believe that our political systems live in a world separate from our economic ones. There is just no way the populace at large in a liberal democracy would stand for a deep recession/depression without demanding the government do something to soften the blow. There is even less of a chance of that happening with a command-control/fascist type economy. This fantasy that he believes that people would just stand idly by thinking "thank God the free market is clearing out the detritus!" while they lose their jobs is laughable at this point.
- EastLondonCoder 5 years agoA very simplified version of Austrian economics boom and bust cycles would be that central banks provides money too cheaply which leads to non productive investments resulting in a first a boom and then a bust when those investments don't pan out. Worth noting is that empirical evidence for this is slim at best. I think a better explanation for the 2008 crisis is that commercial banks mismanaged risk of mortgage backed securities. And I have a hard time seeing the current crisis having anything to do with cheap money
- chrisco255 5 years agoYou should check out corporate debt levels over the last 10 years.
- chrisco255 5 years ago
- kdtsh 5 years agoThe response of governments around the world doesn’t look like it’s been informed by Austrian economics, and in places which have implemented some kind of policy derived from MMT (esp. Australia) things have been looking pretty good. What would Austrian economic policy have done differently and better?
- RobertoG 5 years agoMaybe I'm don't understand it properly, but it seems to me that Austrian economics would predict hyperinflation and high interest rates in Japan the last twenty years when the opposite have happened.
As you say Modern Monetary Theory models predict Japan and, also, the missing depressions in Australia.
- chrisco255 5 years agoTheir central bank practically nationalized the entire economy:
https://research.stlouisfed.org/publications/economic-synops...
As for Australia they are heading into a deep recession as we speak and who knows if it will be a depression or not but given the state of the world, odds are reasonable.
- chrisco255 5 years ago
- RobertoG 5 years ago
- nickysielicki 5 years agoI’m on the same team as you, but this is dangerous advice to take because that’s not the world we live in. Don’t buy gold because you expect the sky to fall tomorrow. In 20 years? Yeah, we’re pretty fucked. But right now? Markets can always stay irrational longer than you can stay solvent.
- oDot 5 years ago> Markets can always stay irrational longer than you can stay solvent.
That's very true. People will read and decide for themselves.
- oDot 5 years ago
- tomrod 5 years agoI disagree that ABC is the only school of thought that has an explanation. Almost every economic school of thought can discuss decreases in aggregate demand and aggregate supply. Not every school of thought may have theories regarding the drivers thereof, which is a feature ABC spends a lot of time on, but some do and most can assess and even build predictions for anticipation.
As an example where ABC will go off the rails, our current crisis is not one build up due to overage in inventory, a favored ideal rationale for ABC to explain the business cycle. Much more explanatory, surprisingly, is Keynesian animal spirits.
- fbonetti 5 years agoThe thrust of ABC is that artificially cheap credit, induced by the central bank, causes malinvestment. Interest rates are signals of risk. When you artificially lower interest rates, people take on more debt than they normally would and invest in capital improvements that only make sense in a low interest rate environment. When the central bank attempts to raise those interest rates to the natural level, or there’s a large change in consumer preferences that causes a drop in aggregate demand, all of those over leveraged business fail en masse, which results in layoffs, reduced production, and falling asset prices. It has nothing to do with inventory.
- tomrod 5 years agoIt does. What do you do with the capital malinvestment? Build up inventory consumers don't want or aren't paying enough for, resulting in layoffs, lost revenue, etc.
The central bank is not the only interest rate driver, as the last 5 years have shown, especially for rates of long tenure bonds. But, regardless of drivers, malinvestment certainly does occur.
- tomrod 5 years ago
- fbonetti 5 years ago
- postingawayonhn 5 years agoI don't think the Austrian School explains what's happened so far, but may help explain some of what is to come. Everything we've seen so far is simply the result of people not being able to operate their businesses. What we will soon see is businesses closing down and probably mass default on debt.
I do believe that the Keynesian economics that has been practiced for the last few decades has left the global economy woefully unprepared and venerable. Low interest rates have fuelled massive asset price inflation and encouraged governments, businesses, and individuals to take on far more debt than is prudent.
- RobertoG 5 years agoKeynesian economics has been practiced for the last few decades? Where? They don't call it the neoliberal period for nothing.
If you are talking about the QE programs, that's what Keynesian economics would call "pushing a string". Keynesian would be fiscal policies, not monetary policies.
- postingawayonhn 5 years ago> Keynesian would be fiscal policies
Well most governments around the world have been running deficits (the US to the tune of~$1T annually) since the last recession. I consider that to be some pretty serious fiscal stimulus.
- postingawayonhn 5 years ago
- RobertoG 5 years ago
- mountainboot 5 years agoPredict every crisis to the tee? Citation needed. Reminds me of the economists have "predicted nine of the last five American recessions."
- DeathArrow 5 years agoAccording to Wikipedia, inverted yield curves are good predictors for economic recession.
After about 12 months in average from when the inversion stars, the recession will start itself. >"All the recessions in the US since 1970 (up through 2018) have been preceded by an inverted yield curve (10-year vs 3-month). Over the same time frame, every occurrence of an inverted yield curve has been followed by recession as declared by the NBER business cycle dating committee.[12] The yield curve became inverted in the first half of 2019, for the first time since 2007." https://en.wikipedia.org/wiki/Yield_curve
- ace32229 5 years ago> they successfully predict every crisis to the tee (except for timing
What does this mean?
- oDot 5 years agoThey describe the source of the problem, the way it will affect the market, and the extent of the effect, usually.
- oDot 5 years ago
- specialist 5 years agoI'm sad that economic cycles are considered a natural law, rather than something to be mitigated or designed away.
FWIW, Richard D. Wolff doesn't accept crashes as a given. He advocates worker self-directed enterprises as a mitigation. Having done some workplace democracy (am a huge fan), I regard his effort as more aspirational than prescriptive, but it's nice to have people floating new ideas.
- joyj2nd 5 years ago"The only school that has any explanation for this is the Austrian School of Economics. Their theory of the business cycle is the reason they successfully predict every crisis to the tee (except for timing, no one can do that), while other economists are just blown away in surprise that it even happened."
Mises is a big joke. Never made it past assistant professor. Never worked a day of his live in private enterprise. His theories describe barter economies in the middle ages; alas this quite well. Due to his lack of understanding of the principal nature of capitalism he offer no insights into economics.
"Credit expansion can bring about a temporary boom. But such a fictitious prosperity must end in a general depression of trade, a slump."
Ludwig von Mises
Von an outstanding an deep insight, not. While not explicit mentioning it, he suggests that this is a bad thing. Trick question: What kind of boom does not bring a credit expansion with it? His quote is just a tautology and offers no insight. Yes, the boom/bust cycle is an inherent feature of capitalism.
- qqssccfftt 5 years ago1) Steal manhole cover 2) Sell to junkyard for drugs 3) Take drugs whilst waiting for it to be replaced 4) Repeat
- fanzhang 5 years ago
- myth_buster 5 years agoBehavioral Economics - Thaler Kahneman Tversky et Al.
If you are referencing to the fallout from covid, it's essentially the effect of global commerce coming to screeching halt.
As CEO of GS said, no one has a clue on what's going to happen in Q2 and beyond, and if they say they do, they are BS'g.
It's a Black swan event. Most forecasting models are ineffective. Whether it would be a V, U, L recession is anyone's guess. As it all depends on how politicians react, ie. How late they are to lockdown and how long they will be in that state. Which perhaps is outside the realm of traditional economics. Hence my suggestion.
- barrenko 5 years agoIt's NOT a black swan event.
- paganel 5 years agoNot the OP but we've last had a pandemic of such proportions 100 years ago, and back then the world was not as inter-connected and inter-dependent as it is right now. Even during WW1 and WW2 industry and the economy itself were working (sometimes at full capacity), a fact that it is not happening right now. We've never had half of the planet's population in some sort of lockdown, that is the definition of a "black sawn event".
Yeah, one could say that things could have been better prepared (I'm in that camp), but one can never truly prepare for half of the working population being put on indeterminate leave on such great a scale.
- dlp211 5 years agoBlack Swan events are unknown unknowns. White swan events are known unknowns. Pandemics are White Swan events.
- dlp211 5 years ago
- 5 years ago
- paganel 5 years ago
- barrenko 5 years ago
- ekianjo 5 years agoThomas Sowell - he has many great books about economical principles - "Basic Economics" itself is extremely educational, and is regularly updated with examples of recent History.
- downerending 5 years agoHaven't read his econ book, but really loved Cosmic Justice. The guy is brilliant.
Beyond that, if you want something kind of fringe but real time, ZeroHedge is interesting. Lots of chaff, but some of the wheat is insightful.
- ekianjo 5 years agoThanks for the recommendation of Cosmic Justice, I was not aware of that book of his. Will definitely have a look!
- ekianjo 5 years ago
- downerending 5 years ago
- Tangokat 5 years agoThe markets and the economy move so fast now I prefer content which updates very regularly. A lot of material is simply outdated.
Real vision[0] has some really good content. It's not super easily digestable for someone not in professional finance but I think finance is just too complicated to simplify and not lose a lot of nuance. I'm trying to learn and have to look up a lot of stuff but it has been fun. I think they have 1 month trial for $1. I recommend Raoul Pal's recent video "The Unfolding" as a starting point.
I also think Macro Voices[1] podcasts are very solid. Again not very easy content but experts in various fields help to make sense of the bigger picture. You can choose a bit depending on what you're interested in (gold, bitcoin, bonds etc).
It's worth noting that NOBODY knows what is really going to happen, all you can do is try to get informed opinions and set probabilities. If you're looking for investment advice trying to time the market or sectors, I would stop looking. The uncertainty does not favour amateurs in my opinion.
- DyslexicAtheist 5 years agoNassim N. Taleb, author of BlackSwan books. His thinking about risk/probability is timeless. Frequently publishes links to his papers and debunks the BS-peddlers on his twitter: https://twitter.com/nntaleb
- BaronSamedi 5 years agoI liked Taleb's "The Black Swan" but find his Twitter persona grating. He displays an attitude of, "anyone who doesn't agree with me is dumb". I think the opposite is needed now. Complex and difficult issues are better approached with humility, and a frank and open discussion of uncertainty.
- alexilliamson 5 years agoThere was a particularly childish fight between Taleb and Nate Silver about a year ago on Twitter. I couldn't stand following either of them after that and I haven't looked back.
- the_af 5 years agoWasn't there a similarly childish fight between Taleb and Pinker, too? That kind of thing is embarrassing. I haven't read Taleb but I enjoy the occasional Pinker and don't want to see him engaged in pointless ego fights.
- the_af 5 years ago
- tasubotadas 5 years agoOn Twitter, for him, it is a completely justifiable approach, and he would be correct 99.99% of times.
- sergiosgc 5 years agoI don't mind arrogance on public personas[^] who are very good at what they do. Think Steve Jobs arrogance. Think José Mourinho "I'm the special one" in 2004. I read it as putting your (reputational) neck on the line. "I'm so sure of this assertion that I'm risking my reputation here.". Taleb is one such brilliant mind.
The downside to arrogance is that it will tank your reputation if you fail. This may be too early in History, and too politically charged to use as an example, but think Trump.
[^] on personal interactions, though, I find arrogance a repellent trait.
- barrenko 5 years agoHe's only arrogant to people covertly arrogant.
- BaronSamedi 5 years agoA perhaps more important downside to arrogance is that hubris leads to blindness. One can be so blinded by the light of one's own brilliance that one fails to see beyond it. Intellectual humility, therefore, is the recognition of our limitations and helps us remain open to new information.
- barrenko 5 years ago
- alexilliamson 5 years ago
- jiscariot 5 years agoI like Taleb and really enjoyed Anti-Fragile and The Black Swan. His personality doesn't bother me too much, but I do think those two books could be 1/3 the size.
- BaronSamedi 5 years ago
- inv13 5 years agoAfter reading through the comments, I'd like to approach from a different angle.
Summary: you better of learning more about human behavior, and how we operate on a daily basis then reading every book on economy.
When I heard in 2008 as a kid, that the world is in a financial crisis because the investors are scared, I had no idea what is going in. I was like, those people are grown man, how come they fear something they do all the time? And why does investors mood correlates to financials? How can a grown man have a fear of investing as an investor, it was odd at a time for me. Then I went ahead and played outside like nothing is happening.
I've read a lot of books just about everything, like on every topics i could get my hands on. Some of em are: Thinking, Fast and Slow, The power of habbit, Deep Simplicity, Intelligent Investor and much more, not exclusively from hackernewsbooks.com.[0]
I always arrived at the conclusion of the market is eventually run by people(no shit). At some point in time people come up with the idea of having a stock exchange or whatever you want to call it. Without people it would be non-functional, non-existent. So if you want to know about the working of market, you better of reading about humans, human mind. What drives us, why we do things, fears, and so much more. And the best thing about this is that you can see for yourself, it feels I am doing a research, but on myself. There is not a single silver bullet in this topics of course, but one book I most often hear is Thinking, Fast and Slow, mentioned before, its really worth to read it!
Sometimes its driven by fear, like right now. In 2008 it was greed (yeah its usually not just one thing, but you get the idea). So at the why and how, I usually end up with human behavior. And since you cant determine what someone is going to do, feel or think, you cant really tell what is going to happened next, or in the future. But after reading more and more about humans, it gets a little bit clearer as you read more books and connect the dots. And you are going to experience everything for yourself. You can be your own research subject. The past couple of years I've been doing that and I really enjoying it.
[0]: https://hackernewsbooks.com/book/thinking-fast-and-slow/8e66...
- RobertoG 5 years agoWe will never agree in what makes sense explaining economy because it's a political question. The first thing to do, in my opinion, is to accept that.
For me, personally, after trying to make sense for a while using the mainstream narrative, the only thing that worked was Modern Monetary Theory. Their explanation of the banking system is based in how it really works (mainstream textbooks don't), the sectoral balances framework (1) gives you a tool to think in terms of aggregate demand and their theory explain things that mainstream have problems with (like public debt ratios and inflation and interest rates relationships). There is a textbook available(2).
1.- https://en.wikipedia.org/wiki/Sectoral_balances 2.- http://bilbo.economicoutlook.net/blog/?page_id=33139
- eel 5 years agoI'm keeping an eye on initial jobless claims and BLS unemployment statistics. I'm concerned that it's a cascading effort as fewer workers means less spending means less earnings means fewer workers and the cycle continues. Obviously the government has levers to try to ease the pain (lower interest rates, pass stimulus bills), but it's not yet clear how sufficient these levers will be.
- mrleinad 5 years agoYeah, that's a recession. But we'll probably see a lot of helicopter money going forward, and some sort of global New Deal in many countries after the virus is gone.
- mrleinad 5 years ago
- calahad 5 years agoCapital and Ideology - Piketty
very approachable for an intimidatingly huge book
- Zenst 5 years agoYou will see mentalities lean more towards a cell based distrubution system over a global one and by that, production spread more with many countries waking up to being dependant upon others and looking at it as if they are at war with a country that makes all the guns in the world style thinking will play out politicaly more.
So a shift away form outsourcing, at least outsourcing out of country in full as has been the case in many area's of production alone.
Equally, resource/asset stripping may well be rife in the fallout with the ability to buy up companies cheaper and be instances in which those value of assets changing quicker than the company values them. They may own some unused warehouses that on the books been almost written off and yet perfect venue for manufacturing boom.
But so many things so high up in the air, you can never see a true picture of tomorrow, but can get some idea's and those ideas will change and flesh out in the long-run. But it's the overall trends and psychology is probably as useful a skill in predicting the markets than maths in today's times. Which kinda shows how up in the air everything is.
Only thing for sure, soon as one company comes up with a cure, you will see a jump in that companies share price, even if they was to do it all for free.
- GavinMcG 5 years agoThis isn't an answer to the question.
- GavinMcG 5 years ago
- tareqak 5 years agoI’ve only read the odd HN posts and AP news articles. That being said, there might be interesting things on these places that were part of an article about how more and more people were resorting to getting financial advice from online sources.
https://www.reddit.com/r/Frugal/
https://www.reddit.com/r/personalfinance/
https://www.reddit.com/r/financialindependence/
https://www.reddit.com/r/investing/
https://www.reddit.com/r/stocks/
Oh, this was the article https://qz.com/1707479/reddit-has-become-a-guide-to-personal... (https://news.ycombinator.com/item?id=22478854).
Then there are the recent HN posts to Lyn Alden’s work: https://news.ycombinator.com/from?site=lynalden.com .
- BenoitEssiambre 5 years agoAlways read David Beckworth: https://www.davidbeckworth.com/popular ,https://twitter.com/DavidBeckworth
Nick Rowe: https://worthwhile.typepad.com/worthwhile_canadian_initi/nic... , https://twitter.com/MacRoweNick
Scott Sumner: https://www.econlib.org/author/ssumner/https://twitter.com/MoneyIllusion
Maybe, Antonios Fatas: https://twitter.com/AntonioFatas
And Also Maybe Sam Bell: https://twitter.com/sam_a_bell
- eru 5 years agoMatt Levine's Money Stuff is also helpful and usually entertaining.
- eru 5 years ago
- SigmundA 5 years agoNot having much luck myself, I don't think anyone knows how to make sense of it. Its either going to be worse than the great depression or no big deal.
Have been scanning HN a lot for anything related to the economy and found little except for this post.
- rjtavares 5 years agoAt this point I don't think anyone credible believes it will be no big deal.
- rjtavares 5 years ago
- scorecard 5 years agoA big shout out for "Good Economics for Hard Times", by two MIT profs who recently won the Nobel Prize in Economics. Why did two academic Economists who specialize in the developing world write a book for the general public? From the book's preface: "We got tired of watching at a distance while the public conversation about core economic issues - immigration, trade, growth, inequality, or the environment - goes more and more out of kilter. ... Also ... as we thought about it, we realized the problems facing the rich countries in the world were actually eerily familiar to those we are used to studying in the developing world - people left behind by development, ballooning inequality, lack of faith in government, fractured societies and polity, and so on."
- dudeinjapan 5 years agoFear and Loathing in Las Vegas: A Savage Journey to the Heart of the American Dream by Hunter S. Thompson
- mempko 5 years agoThis website from Ray Dalio is excellent. https://economicprinciples.org/
Read Debt the first 5000 years from David Graeber.
Read Money in the Modern Economy from the Bank of England. https://www.google.com/url?q=https://www.bankofengland.co.uk...
Why these? You have to understand money and credit. Economics ignores money and credit which would be like physics ignoring atoms and gravity.
- asar 5 years agoI personally really like The Economist to get a good sense of what's going on globally.
- rjtavares 5 years agoI agree, though readers should be aware of their bias towards free-markets, liberal democracies and globalization.
- lovemenot 5 years agoWhat you said is broadly right, but it's always nuanced.
Yesterday they disavowed economists who are apologists for price-gouging on life-essential goods, such as masks, whose production cannot quickly respond to pricing signals.
- tfigment 5 years agoI disagree that it's nuanced, it's very blatant. Listen to coverage involving Bernie Sanders before he dropped out to hear it. But as long as you realize it, it can still be informative.
- tfigment 5 years ago
- lovemenot 5 years ago
- rjtavares 5 years ago
- vincentmarle 5 years agoI’ve studied Economics. It took me a while to realize that it’s far from a deterministic science despite all the fancy math and models (my first clue should have been that it’s in the department of “Social Sciences”, doh!). I wish more of my time was spent learning chaos theory, probability, and systems thinking, rather than solving Lagrange multipliers by hand. I have learned a lot more from reading Nassim Taleb’s books than I ever did in those years in college. So if you want to make sense of the economy, start with learning how much of it doesn’t make sense. Start with Nassim Taleb’s books (any book of The Incerto will suffice).
- aguyfromnb 5 years ago>my first clue should have been that it’s in the department of “Social Sciences”, doh!
Because judging a subject based on it's faculty classification is oh-so-scientific. Economics is a scientific study of social phenomenon; where else would you like it to be placed?
- aguyfromnb 5 years ago
- elamje 5 years agoThe Fed gets a lot of hate, and heck, even economists get a lot of hate, but a good place to start learning about macroeconomics is by understanding what the Fed is doing and why they are doing it. The Age of Turbulence and the Courage to Act are autobiographies written by two former Fed Chairmen, which is the highest rank in the Fed. Greenspan and Bernanke likely get negative publicity, but they wrote books for the layman to understand their decisions. The Courage to Act goes into detail about what Bernanke and co did during the Great Recession and at least gives you context for the decisions which can help you determine if what they did was for “Wall Street”, “Main Street” or everyone.
You’ll likely be surprised at what facilities are at the disposal of this pseudo public institution, and it’s certainly interesting. The Fed collects inordinate amounts of data from each of its branches, and in times of crisis, as the books elaborate on, it seems they mostly go off the cuff with custom solutions to large scale solutions. Anyways, it helped me understand the US economy better. Greenspan’s book has more info on global policies.
- lootsauce 5 years agoBest discussions on the economy I have found are on Macrovoices[0] podcast and Realvison[1] TV Both are macro focused and take as a given the audience is trying to make money or at least preserve assets. It's been an amazing few years listening to all the interviews and working over the ideas in my own head then seeing things play out in the markets and economy.
[0] https://www.macrovoices.com/ [1] https://www.realvision.com/
- fallingfrog 5 years agoDebt: the first 5000 years by David Graeber. It’s a fantastic piece that takes a step back from the present moment and asks how the economic debt system developed and how other people in other times have done things.
- hosolmaz 5 years ago+1 The first few chapters were eye opening
- hosolmaz 5 years ago
- themantra514 5 years agoWhat were the ideologies that shaped the economic systems in which we live you ask? Welp do I have a book for you, friend:
Capital and Ideology by by Thomas Piketty
Spoiler alert Since way back inequality was baked-in as a featue.
- PKop 5 years agoThese twitter accounts:
https://twitter.com/LukeGromen
https://twitter.com/LynAldenContact
blog:
Common thread is topics around currency dynamics, and US Dollar reserve currency affecting..many things: trade, markets, geopolitics.
- koheripbal 5 years agoIt's hard to under-emphasize the long term impacts of the Fed's actions to print (not literally print but buy assets (treasuries, corporate bonds, and even amazingly public EQUITY) in exchange for cash), and the impact it will have on the USD - the global reserve currency.
Anyone who claims to know for certain what the impact will be, is a fool or a liar. We are in unprecedented monetary policy times.
Maybe USD is cementing it's position as the global currency standard, maybe this will spell the demise of the USD and the US' economic collapse, or maybe not much will change at all. There are arguments for all three to be true.
- aguyfromnb 5 years ago>Anyone who claims to know for certain what the impact will be, is a fool or a liar.
Why do you need to know for certain?
If you're trying to make money, or even just "get by", you look at probabilities of possible outcomes and make your best guess on how to approach the problem. A mentality of "no one knows for sure, so it's pointless" is oddly unscientific. You only need to be "right" some of the time.
- aguyfromnb 5 years ago
- koheripbal 5 years ago
- skanderbm 5 years agoI would go through these three videos : - Ray Dalio for one view https://youtu.be/PHe0bXAIuk0 - Yanis Varoufakis for another https://youtu.be/zi-dXc0bKUM - Charles Mackay for an ancient, wise and entertaining read : https://youtu.be/FxgRbnh2ouE
- kiliantics 5 years ago+1 for Varoufakis, he has a very deep understanding of the system, having seen its ugly details very close up in the eurocrisis, and he has an excellent clarity in explaining it all
- kiliantics 5 years ago
- pHde 5 years agohttps://voxeu.org/ for "research-based policy analysis and commentary from leading economists".
- cl42 5 years agoThis is a bit of a self-promotional piece, but I put together a simple website that extracts sentences related to COVID-19 and economics/finance news: https://chimerais.com/covid19
I try to write a blog post once or twice a week as well, but this is more for myself -- just to actually force myself to synthesize everything going on. Happy to share if anyone is interested.
- rojeee 5 years agoPerry Mehrling - The Money View. He has a course on coursera [1]. It’s the best explanation I’ve seen of how the economy works. It’s a bank centric view and focuses on balance sheets for analysis. Highly recommend it.
[1] https://www.coursera.org/lecture/money-banking/a-money-view-...
- vinceguidry 5 years agoWikipedia. Just yesterday I was explaining my layman's understanding of econ, namely that money itself is zero-sum, so the prices of goods and services float on the free market according to how much people are willing to pay for them.
Central banks inject money into the economy, inflating the economy, reducing costs across the board. This acts as a wealth transfer from wealth holders to wealth producers, by that I mean businesses.
Normal inflation happens in a healthy economy, in an unhealthy one like this one, they dust off the lever known as QE. In a QE environment, the central bank injects money directly into the economy by buying up government bonds and other financial instruments.
This coupled with fractional reserve banking means that the banks can make a whole lot more loans, flooding the system with liquidity so that money can start moving again.
I had implied that QE increases the money supply, and so was corrected and told that it was actually the money base that was increased. On to Wikipedia I went to upgrade my knowledge.
There I found out that the concept of money base is referring specifically to the amount of money banks can lend on using fractional reserve banking. So while nominally it's referring to the amount of hard currency in circulation, that 'in circulation' part is key, it's not just the amount of 'real' money out there.
Economics shouldn't be mysterious, one's first stop should be Wikipedia to understand the boring concepts. If you want to know how it got that way, the Wikipedia articles on the history of the banking system are pretty good.
It's dry, boring stuff. But you need to know it if you want to understand how the world works.
- RobertoG 5 years ago>>"This coupled with fractional reserve banking means that the banks can make a whole lot more loans, flooding the system with liquidity so that money can start moving again."
That's not how it works.
First, never mind how much money banks can lend, if there is nobody asking for credit. You can't create demand for credit by QE.
Second, private banks are not limited in their capacity for creating credit by the quantity of reserves available. If central banks are going to keep their interest rate target they have to facilitate any demand of reserves by private banks.
It's impossible for a Central Bank to control the quantity of money and the interest rate, they have to choose one, and they choose the interest rate.
As I said in another post, I was totally confused about how it works until I started to read the Modern Money Theory version of all this.
Here, explained by the Bank of England (pdf):
https://www.bankofengland.co.uk/-/media/boe/files/quarterly-...
- RobertoG 5 years ago
- 5 years ago
- shanev 5 years agoKhan Academy’s economics and finance videos are excellent for learning the fundamentals.
Ray Dalio’s talks on YouTube, and his most recent TED talk are great for context around economic downturns.
Real Vision and Anthony Pompliano’s podcast are good for deep dives into what’s going on with a bit of an alternative take.
- rjtavares 5 years agoSome podcast recommendations:
-Freakonomics (https://freakonomics.com/) has been making some good episodes about different aspects of the current crisis. The latest episode is about the food supply market, the one before is about the $2 trillion aid package.
-Planet Money (https://www.npr.org/sections/money/), which was created in 2008 to help make sense of the finantial crisis, is obviously focused on the crisis. Expect 20-30 minute episodes about economic topics in the news (some of the latest episodes include "The Big Small Business Rescue" and "The Economics Of Hospital Beds")
- DennisP 5 years agoRay Dalio. Start with his articles on LinkedIn. He has a recent book if you really want to dig in.
Dalio runs the world's largest hedge fund and it's entirely focused on predicting what the macroeconomy will do, based on studying the last thousand years or so of economic history.
- brainpool 5 years agoDefinitely Keynes. Much of the fundamentals hasn’t made much sense earlier, but it does now.
- postingawayonhn 5 years agoI'd argue the Keynesian response to the last crisis is what has left us so overleveraged and poorly prepared for this one.
- RobertoG 5 years agoWhat Keynesian response? A Keynesian response would be a fiscal response to a fall in aggregate demand by governments, not a monetary one by central banks.
- tumetab1 5 years agoThat's the old problem that those who call themselves, and between them, keynesians ignore the first part of fiscal responsibility on good times.
According to tome better read than me it doesn't help that Keynes ideas floated during his writings so many contradictory ideas can be read and/or inferred from it.
- tumetab1 5 years ago
- RobertoG 5 years ago
- postingawayonhn 5 years ago
- blackvelvet 5 years agoThere's an excellent graphic novel (Economix) which gives a good broad overview of "the economy". It's very accessible.
- stackzero 5 years agoI'm interested in pointers on this in general, not just wrt the current climate.
- tigerlily 5 years agoFWIW, if you're in New Zealand you can follow economic news updates from www.interest.co.nz.
It's an impressive aggregation of data and journalism. But boy could their site do with some improvement... Could be some work in it?
There's a comments section under every article, and a motley community of dedicated "common 'taters". Plenty of workers, business owners, property darklords, doomers, prospective first home buyers, trolls, and even a few wise farmers. I find it helpful to guage the vibe of what is happening on the ground. Deep down, I think what's really needed is a forum.
- jcroll 5 years agoEconomics Explained on youtube https://www.youtube.com/channel/UCZ4AMrDcNrfy3X6nsU8-rPg
- tmaly 5 years agoI have really enjoyed simple economics texts.
I highly recommend Economics in One Lesson by Henry Hazlitt. It is a very approachable book that can be read in one sitting.
It illustrates the seen and unseen effects of action from Frédéric Bastiat.
- econcon 5 years agoI read many books and came to realization that I don't understand how economy around me is going to turnout. Yes, I know few things about economy but whatever I know has no predictive power.
So I kept it aside, I bought a piece of land and now I setup hydro and solar pvs, to generate my own power.
I am growing my own food (mostly potatoes, tomatoes, beans, raising few hens for eggs) and I've shelter, that's pretty much all I need.
So now I don't care about economy going down or smth, yes I might lose money which is in economy but it isn't going to affect my livelihood.
- DrNuke 5 years agoYou may want to have a look at five world-leading, freely available general references (from World Bank, International Monetary Fund, Merryll Lynch, United Nations and Deutsche Bank... look for their latest updates following this crisis), which I used as an intro for my recent booklet about Economy https://www.tenproblems.com/2020/02/24/ten-problems-for-econ...
- wernst 5 years agoMany are plugging books here, so I will plug: The Money Problem by Morgan Ricks
It provides a solid overview of different views of what is money, what is banking, and in what ways does the financial system impact the real economy? - These are all contested points in economics.
He goes on to lay out a different design to a monetary system, that he believes resolves the main fragility in our current system - panics on short term debt. It's a good read for someone who enjoys system design as much as they do financial/monetary economics.
- sauwan 5 years agoA very interesting one that's helped me understand a lot right now is Goliath by Matt Stoller. He frames todays economy in a similar light as the 1920s. Very compelling and interesting.
- mrleinad 5 years agoLiving in Argentina, the political landscape has far more impact on the economy than in most other countries.
What I read here are:
- Newspaper titles (only read the content if something is really interesting)
- Twitter, following a few key people, both with a political and economical background
- Discuss with friends about economy topics
I know there's much noise in all that, but same as with politics, I don't think you'll be able to fully make sense of the economy unless you dive deep into it for many years, and even then you'll only get a partial view on many things.
- rocco337 5 years agoCapital - Piketty
- yodsanklai 5 years agoFor general principles, I recommend
https://www.amazon.com/Principles-Economics-7th-Gregory-Mank...
I started with vulgarisation but it didn't lead me very far. This is a reference textbook used by economics students around the world. It's surprisingly entertaining and teaches you the basic concepts of macro and micro economics.
- activatedgeek 5 years agoI have been reading A Farewell to Alms - Brief History of Economics [1]. Largely answers questions around why Industrial revolution happened when it did despite all the institutions existing well before that.
[1] https://www.amazon.com/Farewell-Alms-Economic-History-Prince...
- seymore_12 5 years agoRight now I enjoy reading The Coming Plague https://www.amazon.com/Coming-Plague-Emerging-Diseases-Balan... Written 1995, but incredibly actual. Shows that most of epidemics are function of political will and economy and vice versa.
- snow_mac 5 years agoI'm reading absolutely nothing. I'm staying away from the markets and my investment accounts. Right now we're down from the trump bump; atleast last week we were. My 401k and college fund (index fund) for my kid are all in the shitter.
Therefore, my best advice for you is to hoard cash (3-12 months expenses), cut expenses and try not to freak the fuck out right now
- sfj 5 years agoHow can you suggest to be in cash when they are literally printing trillions with no sign it will slow down?
I know that a lot of it is supposedly not going to make it into the real economy. But if there is one thing for sure, it's that the government is going to behave recklessly and fuck it up.
- dahdum 5 years agoThe inflation target is still 2% despite the easing. I'm not aware of any indicators showing it'll exceed that, but it's easy to funnel your cash into TIPS or similar if needed. If the lockdown continues and the recession deepens the more valuable cash will be. If it ends soon and the economy rebounds you're out the opportunity cost.
- dahdum 5 years ago
- sfj 5 years ago
- stopachka 5 years agoThree things:
1. Economics in one Lessons. One of the most powerful books I've read on the economy. Will help you rethink and see deeper 2. Dao of Capital. Book by Mark Spitznagel -- goes into tail risk hedging, and his counter-intuitive investment thesis. He made 4000% over Covid 3. Dalio's essays -- from "The changing world order" to "Debt Crises"
- Jedd 5 years agoJohn Ralston Saul's The Collapse of Globalism.
Published ~2005, it (arguably) makes sense of the previous several decades of western economics.
https://www.johnralstonsaul.com/non-fiction-books/the-collap...
- eru 5 years agoI just read the blurb and summary on the page you linked to.
It might be an interesting read, but the main thesis seems false? Globalism has done just fine.
> Elsewhere, the world looks for answers to African debt. the AIDS epidemic, the return of fundamentalism and terrorism. all of which perversely refuse to disappear despite the theoretical rise in global prosperity.
Most of these don't look so intractable any more, even if we haven't solved them, yet.
- eru 5 years ago
- axegon_ 5 years agoCurrently nothing, ran out of books to read and amazon is taking forever to ship them, despite the hefty shipping fee I paid(currently two weeks from Austria to Bulgaria which is just over 1000 km away)... Rant aside, all of Nassim Nicholas Taleb's books are a very good choice for anyone that hasn't read them.
- texasbigdata 5 years agoKindle?
- axegon_ 5 years agoNot available there I'm afraid.
- axegon_ 5 years ago
- texasbigdata 5 years ago
- m0llusk 5 years agoStart with some basic reading such as Mandelbrot's Misbehavior of Markets and Taleb's books, then move on to articles and recent video interviews with Nouriel Roubini, Raoul Pal, and Neil Howe, and finally be sure to take in some modern thinking from the likes of Venkatesh Rao at RibbonFarm.
- aazaa 5 years agoEverything Lyn Alden has written:
- Kaibeezy 5 years agoThe Normal Economy Is Never Coming Back - https://foreignpolicy.com/2020/04/09/unemployment-coronaviru...
- tareqak 5 years agoPosted on HN under https://news.ycombinator.com/item?id=22857491 and https://news.ycombinator.com/item?id=22839462 .
- danesparza 5 years agoIndeed. This reminds me of what I've read about WWI -- and the fall of several monarchies. We don't have many monarchies now -- but the old world order is changing.
- tareqak 5 years ago
- ckrusk 5 years agoI really enjoy reading Matt Levine on Bloomberg. https://www.bloomberg.com/opinion/authors/ARbTQlRLRjE/matthe...
- scorecard 5 years agoThe Economy, a free, open access textbook crowdsourced from Econ professors all over the world, along with the Core Covid-19 collection of teaching materials:
- neilwilson 5 years agoMacroeconomics by Bill Mitchell (https://amzn.to/2XyoTrU)
The go to text book to understand the mechanisms and mechanics behind Modern Money Theory.
- moandcompany 5 years ago
- nickysielicki 5 years agohttps://www.epsilontheory.com/things-fall-apart-part-3-marke...
This blog, and this post in particular.
- larrydag 5 years agoFor US economy I like to track the FRED metrics. They have good visualization charts
- thorwasdfasdf 5 years agoRealVision - https://www.realvision.com/
not in any way affiliated with them, i just find their content sophisticated and interesting.
- econbooks 5 years agoHa-Joon Chang's works
Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism https://en.wikipedia.org/wiki/Bad_Samaritans:_The_Myth_of_Fr...https://www.youtube.com/watch?v=WU9DgfOMpmo
Economics: The User's Guide https://www.theguardian.com/books/2014/may/29/economics-the-...
Jane Jacobs
Cities and the Wealth of Nations https://www.eyrie.org/~eagle/reviews/books/0-394-72911-0.htm...
- 0x8BADF00D 5 years ago
- ratsbane 5 years agoFamous Financial Fiascos by John Train. It's short and entertaining. There are only a few chapters that deal with sovereign debt, but he gets the essence of the thing.
- tigerlily 5 years agoHere ya go: https://www.bogleheads.org/forum/index.php
- artur_makly 5 years agoRay Dalio : https://www.youtube.com/watch?v=yrxYhv2O3wU
- TehShrike 5 years agoGeopolitical Futures https://geopoliticalfutures.com/
- ohiovr 5 years agoThe fed used to provide a safe environment for someone to play the music for the game musical chairs. But now they just make their own music.
- jressey 5 years agoMoby Dick might be a place to start. A popular reading is that it is an examination of the impossibility to understand large things.
- frequentnapper 5 years agoWhat I'd like to know is that is the middle class going to shrink further as a result of the current set of events?
- freeduck 5 years agoTry looking into political betting sites.
- bwb 5 years agoPlanet money and the indicator, both great podcasts that break economic data down into the macro/micro.
- jazzyk 5 years agoOne book NOT to read: "The Ant and the Grasshopper" by Aesop.
He got it completely wrong - for quite some time, Grasshoppers have been routinely bailed out with money stolen from the Ants (through interest rates way below inflation).
- threatofrain 5 years agoHow are people reading timing and schedule for major institutions near their area?
- smarri 5 years agoThe blogs and articles of John Kay and Niall Ferguson. The Financial Times too.
- ilaksh 5 years agoBig Debt Crisis by Dalio. Because a lot had been happening gradually also.
- Tycho 5 years agoThings Hidden Since the Foundation of the World by René Girard.
- grindgrind 5 years agoRead Bloomberg? They have several excellent free e-mail newsletters.
- AndyMcConachie 5 years agoFirst, the usual disclaimers about 'do your own research' and all that. Also, people come into econ for different reasons, have different focuses, and expect different things from their news. Some people read news about the economy because they have specific decision making responsibilty, and some people read it because they're just curious. I'm somewhere in the middle depending on what is specifically being talked about.
Here are some random links that I check from time to time when I have the time.
https://wallstreetonparade.com/
https://www.nakedcapitalism.com/
https://mattstoller.substack.com/
And then many mainstream ones like newspaper sites and the like.
- cynusx 5 years agoI wouldn't look at economic theory to predict what will happen as economists haven't studied economies subject to pandemics, but you can look at the reality on the ground
1/ consumer confidence is extremely low as people are afraid of the virus and afraid of losing their jobs
2/ businesses have seen sudden and complete revenue destruction with revenue going down from 50% to 0% of pre-crisis; however their obligations (salaries, servicing debt, paying suppliers) obviously are still there. The natural instinct is to pause projects, new hiring, layoff people, stop buying things, postpone payments to suppliers and be more aggressive in collecting invoices.
This becomes a self-reinforcing cycle purging non-essential businesses or non-competitive businesses at a very high rate.
This will accelerate until normal people are no longer afraid to go out and then the supply chains will restart with the businesses managed to remain alive.
The best policy response would be to freeze the capitalist system altogether and allow any liability due in the future to be postponed by 3 months when entities can prove significant revenue shortfalls and implement an aggressive government-backed temporary unemployment system for those businesses as well.
To the extent that people haven't lost their job yet, it would fix the impulse of business owners to do this very aggressively in the necessity to balance inbound and outbound cash and post-crisis these businesses would have similar balance sheets as pre-crisis so life can resume quickly.
For normal people nothing would change much to the current situation (stay at home, temporary unemployment, being afraid).
The other good policy response I have seen is to force banks to give businesses a corona-credit and to guarantee those loans. It's less good because it does increase the debt-load of a company which alters their balance sheets and would have to be paid off post-crisis.
- anoraca 5 years ago100% not anonymous public comments on the internet. Having waded into the waters of r/WallStBets and even some threads on here, there is so much disinformation and propaganda that it's actively harmful to read it.
- bosky101 5 years agowanted to share an offbeat method a friend shared the other day. he started plotting the weight of the local newspaper. lesser weight meant lesser advertisers.
- PaulHoule 5 years agoMancur Olson: Logic of Collective action.
- dredmorbius 5 years agoGood book.
How so specifically?
- dredmorbius 5 years ago
- pjmorris 5 years agoI've followed the 'Calculated Risk' and 'Naked Capitalism' blogs since the last crisis. On twitter I follow @MkBlyth and @nntaleb.
Disclaimer: NC is fairly leftish, but I don't consider that a flaw. I'd be interested in learning about rightish blogs of the same depth and quality.
- biolurker1 5 years agoCoursera and Edx courses. IBS Univ, Rice
- refurb 5 years agoBack in 2007 I listen to Econlib podcast quite a lot. The host had some really great guests on and did a very nice job in digging into the issues.
Yes, the host is a libertarian, but I don’t think he forces it on his listeners. He’ll often have people on who aren’t anything close to libertarian. He’s also quite upfront about his own biases.
I learned a ton from that podcast.
- rz2k 5 years agoRight now I am reading The Black Death in Egypt and England: a comparative study by Stuart Borsch. It compares the macroeconomic effects of the black death in England in Egypt. The relative power of the aristocracy to control or fail to control the supply and price of labor not only affected wages in the short term but agricultural productivity and eventually the foundation for industrialization and entrepreneurship.
I am only a third of the way through, but it so far seems thoroughly researched, without the dodgy understanding of economics in many (most?) historical nonfiction books. The only potential problem is that I want to believe that the dystopian sounding world ruled by mamluks was an economic disaster waiting to happen, so I am wary of my reading being overly credulous. It could be that irrigation dependent agriculture was more brittle infrastructure, but I haven't yet had time to finish or digest the book yet.
From the introduction
England:
> In spite of the disputes over many significant issues, scholars agree about certain aspects of the outcome in Western Europe, particularly northwestern Europe. In many areas, urban and rural wages rose, land rents declined, grain prices dropped, agricultural output became more diversified, and unemployment levels decreased. Furthermore, the percentage decrease of agrarian and total output was less than that of the population, and per capita incomes rose. Overall economic recovery was largely completed by the year 1500. Landholding systems were transformed, and the manorial system, which was on the wane in some areas, collapsed in many parts of Western Europe, and was replaced by tenant farming or small peasant landholdings. Where these conclusions are accepted, they are often accepted as an axiomatic response to the relative scarcity of labor and the abundance of land that accompanied depopulation. The concessions that landlords made to peasants also seem to be an obvious consequence of the relative scarcity of rural labor.
Egypt:
> Wages dropped precipitously, land rents increased, grain prices rose, agricultural output became less diversified, and unemployment levels increased. The percentage decrease in agrarian and total output was greater than that of the population, and per capita incomes plummeted. The landholding system did not undergo a radical transformation, and the aristocracy was able to successfully contest the demands of scarce rural labor. Furthermore, economic recovery was nowhere in sight by 1500; the agrarian system lay in ruins, and agricultural output had declined by approximately sixty-eight percent.
[1] https://smile.amazon.com/Black-Death-Egypt-England-Comparati...
- chvid 5 years agoS&p500 five year chart
- simonh 5 years agoThe Economist magazine, they have a paywall but you get to read a handful of articles for free. Many of the Covid-19 relevant articles are publicly viewable and you can access more if you sign up for a newsletter.
- minimidge 5 years agoThe writing on the wall
- rv-de 5 years agoreddit.com/r/collapse ... only half joking.
- dredmorbius 5 years agoI'd recommend Collapsademic as far higher S/N.
Mod is a former /r/collapse mod. Pesimistic, but not a loon.
- rv-de 5 years agoI'll check it out. But I must say that the crowd on collapse is actually on average surprisingly critical and will expose and discuss flawed information or unfounded theories. It's not a bunch of conspiracy nuts as one might expect.
- rv-de 5 years ago
- dredmorbius 5 years ago
- owenversteeg 5 years agoSo there are a number of pretty funny responses in this thread, I decided to make a list:
Marx
the Bible
Bogleheads
Newspaper titles (you read that right, not the content, titles)
"nothing, I just bought a piece of land to grow potatoes and beans"
Comparative study of the black death
Raw St. Louis Fed data
Fear and Loathing in Las Vegas
- lukewrites 5 years agoDavid Harvey’s The Enigma of Capitalism has quite a bit of explanatory power, I think, and presents an ideology that is a bit different to the most book suggestions on hn.
- wernercd 5 years ago1984
- 5 years ago
- s_kilk 5 years agoMarx - Capital
- aqqTwxye 5 years agoThe entrails of birds.
- _DIFIGIANO_ 5 years agothe bible
- sproketboy 5 years agoGoliath
The Curse Of Bigness
- lucasps99 5 years agofirst question
- bitxbitxbitcoin 5 years agoThe Bitcoin Whitepaper. [1]
- icu 5 years ago1. How an Economy Grows and Why it Crashes (2010) by Peter Schiff and Andrew Schiff
2. A Template For Understanding Big Debt Crises (2018) by Ray Dalio
3. Capitalism: The Unknown Ideal by Ayn Rand
4. Basic Economics: A Citizen's Guide to the Economy by Thomas Sowell
- sleepysysadmin 5 years agoThe boomers are retiring soon if not now. Many of them were in higher risk investments than they should be and if they all sold their high risk and went to low risk at once. The market crashes; that's what happened. Tons of people want to sell.
So the governments of the world have been the ones buying. https://www.federalreserve.gov/monetarypolicy/bst_recenttren...
The fed put 4 trillion on the books during the financial crisis and 10 years later they started normalization and barely made a dent. This number should be 0. Now in a few months they've spent 2 trillion buying what nobody on the market is buying.
How do you make sense of the market when the government is basically preventing the crash. It's not possible to make sense right now.
We aren't seeing real market numbers. We aren't seeing real tbill rates. We arent seeing real economic numbers like unemployment because the governments have been hiding % under participation rate.