economics - where to begin?

Abbott that story really scared me. Tuck me in?

Shit I don't know where my head is forget that last part.

I don't have any happy stories.

I'm sort of imagining a baby alien with titanium teeth. Very impressive.

I took an economics class in high school and got an A, but only because I was good at memorizing the terms and basic principles and because all the quizzes were multiple-choice. Otherwise, economics is something that I just cannot wrap my head around. Like, I was a pretty good history student, too, until we got around to anything that involved tariffs and then I was like, "Durrrr, what?"

My high school econ class was taught by a football coach who looked like a really solemn Ken doll. The main things I remember:

1. He had us write a one-page reply every class to an inspirational quote on the board, the kind coaches like. He didn't like any of my replies, so eventually I just started writing about other inspirational quotes. "Wow, 'a journey of a thousand miles begins with a single step.' That's really true. You're finally beginning to catch on to this class."

2. Playing "Communist Monopoly," where we were given random, equal amounts of property squares and had to move pieces around the board paying people, not trading anything. Then at the end of the game (kind of randomly truncated), we had to evenly divide our winnings. "And that's how Communism works! As you can see, it's tedious and boring."

As far as books abt econ, I liked The Undercover Economist. Of course, since it came out after Freakanomics, the jacket has all this stuff like "just like Freakanomics!" But unlike Freakanomics, you actually learn about theory/principles/ideas of economics, and not just a bunch of "how can we connect gallons of strawberry ice cream purchased with how Kennedy started the space program?"

OMG: I don't know if I even want to stifle my "Communist Monopoly" laughter and be a pedant about it, but he could have gone much further: I think technically the teacher would control all the hotels, place them however he wanted, and you would have to keep your piece in one spot, getting paid in small, periodic increments. (If you wanted to move to another, more prosperous square, you would have to fill out various forms and submit them to the teacher, requesting permission.)

Also in capitalist monopoly there should technically be one player who doesn't get $200 for passing go, unemployment being a fixed structural feature of the economy that prevents inflation from damaging the other players' earnings. (Also you'd have to be locked up for a week and playing for sandwiches and bottled water.)

In Capitalist Monopoly, of course, two out of nine players get a long head-start during which they buy up most of the properties and then make up a bunch of arcane rules you can't follow

has larry gonick not written a book about this?

I only realized recently that the various pieces are meant to represent wealth / poverty that way! They were just too pussy about capitalism to actually start the sports car out with more cash than the thimble.

I never thought of it that way - but wait, so the town car is the capitalist, the thimble is the laborer/craftsman, the wheelbarrow is the farmer, the dog is the, uh, running dog?

wheelbarrow 4 life

I am listening to some Teaching Company lectures on Economics right now, and it is mostly filling in some gaps in my Econ 101 understanding, and it is generally going well, but the lecture on the trade balance made my head spin.

-- Deric W. Haircare, you are a stupid fucked-up piece of shit and ought to be banned. There's not a post of yours I've read that added anything to the conversation, you got no data, no information, I don't even know who you are or where you're from, and you're not even funny. On top of that you can't even amage to post a WDYLL photo proving that you have cleavage and a cute smile. You're worthless. The posters you criticize might have their fair share of predictable faults, but at least none of them is being a complete and utter fucking dullard.

Oh, are you referring to all 30 or so posts I've made on this board? I have no idea what could've possibly inspired this much bile, but you can seriously go fuck yourself straight to death.

ugh, Macroeconomics in HS was brutal. We had a real teacher, but he got all his lesson plans and videos from some 'winger free market group and refused to teach anything but.

x-post

And if you'd like to point out examples of whatever the fuck straw man bullshit you're even talking about, that'd be great.

Macroeconomics is fun. I'm currently taking a Macro class for my M.B.A. degree. It's not as bad as I expected.

(from way upthread)

Inflation/Deflation exist because money has no intrinsic value, even gold. Money is only worth what people are able to give you for it. This is evidenced by the prices people will charge for things. The natural tendency is for people to try and increase prices but this only serves to reduce the value of money because the value to a person of, say, a loaf of bread remains pretty much the same...

I think I'm getting this, except why is it natural that businesses will gradually charge higher and higher prices over time (thus causing inflation in the long run)? Does this have to do with the increasing money supply?

"because people are greedy bastards"

http://www.mospaw.com/monopoly/token-iron.jpg IRON OUT INEQUALITY http://www.mospaw.com/monopoly/token-iron.jpg

WTF is the cannon supposed to represent? Unbridled phallic agression?

Having not studied economics much formally, I'd venture a guess that businesses are probably likely to raise prices for legit reasons but then not drop them down again (as much) unless they really need to. Like I wouldn't be surprised that if the coffee price goes up 10%, Starbucks would raise its prices accordingly, but then if coffee went back down to where it was, Starbucks would either keep prices the same or drop them less than proportionally. Just a hunch.

<i>I think I'm getting this, except why is it natural that businesses will gradually charge higher and higher prices over time (thus causing inflation in the long run)? Does this have to do with the increasing money supply?</i>

The general idea these days is that economies have cycles, and they grow towards full capacity. As they do this, it becomes harder and harder for companies to keep their good workers, because their labour is more in demand. So the companies have to pay the workers more. This has two effects:
1. People have more money, so are willing to spend more money on stuff
2. (Some) companies have higher costs, and so must raise their prices to avoid closing down.

You can substitute labour for dudes who make factories, gold, oil, whatever. Eventually someone stops buying stuff (or central banks who are concerned with inflation put up interest rates, which makes you have to pay more on your mortgage and gives you less money to spend on DVDs, and also discourages business from investing in things and making bigger factories), and the economy slows down and goes into the recession phase. Rinse and repeat.

I didn't read the whole thread so someone has probably already said this.

fuck u lack of html

Also after you have read the economics books aimed at people who have no idea about economics (the undercover economist etc) and you want a bit more detail, the best textbook author by far is Greg Mankiw.

Having not studied economics much formally, I'd venture a guess that businesses are probably likely to raise prices for legit reasons but then not drop them down again (as much) unless they really need to. Like I wouldn't be surprised that if the coffee price goes up 10%, Starbucks would raise its prices accordingly, but then if coffee went back down to where it was, Starbucks would either keep prices the same or drop them less than proportionally. Just a hunch.

This is called sticky prices. Oil/petrol in particular has this effect. Pricing in perfect competition should not be sticky.

it's one of my true regrets in this life, that i decided to change my undergrad major from poli sci/economics to poli sci/english. of course, that my economics grads weren't all that hot had something to do with that decision ;__;

and oh yeah, micro/macro weren't all that brutal as classes -- at least not the intro level classes. the intermediate micro/macro classes (i.e., the stuff that econ majors had to take at my school) were a bit more quant-oriented than the intro stuff, but the math wasn't all that bad (though one had to take calculus in order to be able to take intermediate micro/macro in the 1st place).

the REAL bitch of a class for econ majors was econometrics -- that was the shit that made me drop economics as a major.

Economics is equally bad when it tries too hard to be a science and when it tries too hard to be a liberal art

Science as w/ Marx?!

Seriously in need of a crash-course after I finish vol 1 of 'Kapital'. I suppose Smith is the obvious.

No, like more recent economics that dresses itself in excessive math and modeling to disguise its inability to forecast certain things accurately.

Can someone explain how oil keeps getting more expensive in Europe while the dollar keeps getting less expensive? Shouldn't these two, like, cancel each other out at least a little bit?

Do these oil companies really think we're going to just keep on (oh wait, we are, aren't we? oh well, they win.)

Well the price of oil is outpacing the dollar. Oil went up by $3 a barrel in the last week, while today the dollar has dropped by one cent against the pound.

Has this been the case during the last, say, six months? Because I had the impression that in the long run, it didn't feel that way.

Yeah, basically, we've been cusioned from the effects of the rise in oil price somewhat.

Oh. I thought we were being had.

The internet says that since 2001 the exchange rate has changed from $1.45 to the pound, to $2.06 to the pound, so the value of the dollar has fallen by maybe a third. Over the same period the price of oil has risen from about $25 a barrel to about $90 a barrel, nearly three to four times higher.

I think the oil price was a bit higher than that, but what you're basically saying is correct: the dollar hasn't fallen anywhere near enough for the current price to have parity with 2000 prices.

Okay, want an intro on Keynesian economics, pref covering its use in the FDR and the modern eras

as close to a textbook definition as i can muster off top of the dome: keynesian economic theory posits that in times of recession (decreased aggregate demand), government can pick up the slack using economic stimulus. so things like FDR-style public works projects could be interpreted as keynesian economic stimulus since government is spending in the observed absence of private spending. the theory goes that absent any government intervention, the private economy would stagnate or otherwise take longer for aggregate demand to recover and than injection of government spending would help increase the velocity of spending and perhaps reignite the yoga flame of private investment and employment.

at some point "keynesian" came to be interpreted as government spending of any kind (which is rong). the risk of spending too much govt money during economic expansion is the crowding out effect which has the govt demanding too much of the available dollars for private investment to generate more efficient growth, thus stifling said growth!

i guess keynesian or other fiscal policies kind of fell out of favor ca. the recession of the early 80s which was combated with monetary policy of the fed (more associated w/ milton friedman iirc). keynes became new hotness again recently because we already had p low interest rates so there wasn't much stimulus to be gained from that.

does economics ever just...click? i hate not understanding big news stories.

i'm in basically the same position as toby at the start of this thread except i've actually tried reading and studied it at university for a year, to basically no avail. it goes beyond mere lack of knowledge, which can be solved with information and learning, into just sheer total incomprehension and bafflement at how to get to a place of understanding. i have no idea what even the child's-level explanations of inflation upthread mean. seriously what is the key to getting it? this is literally the only subject that makes me feel this thick. (apart from certain branches of cultural theory but at some point i realised those were total bollocks anyway and stopped beating myself up over it.)

or should i just accept that, like, i don't have the right brain to understand economics? i don't beat myself up for not understanding physics, i never see anyone feel bad about not enjoying literature. it's only cuz economics interacts with politics and current affairs that i ever feel the lack.

i took two economics classes in college, got As in both, have read a couple books on economics on my own, and i feel like i'm starting over every time i try to think about the subject. i think the difficulty largely comes from the way it mixes incredibly airy, abstract concepts with real-world figures and statistics -- you have to think in two different 'modes' at once.

the other challenging thing about economics that you don't get so much with other sciences is that there are several schools of thought, and they all start from completely different places, so depending on what commentator you're reading you get a completely different version of what's going on (e.g., economists from different schools won't agree on the cause of a recession).

i found this pretty lucid and interesting: http://www.amazon.co.uk/Long-Short-Investment-Normally-Intelligent/dp/0954809327/. it's kind of about personal investing rather than macroeconomics, but he has to go through some of the big and fundamental stuff before he gets into, e.g. the markets.

the investing/markets stuff in that book is uk-centric btw.

http://www.guardian.co.uk/commentisfree/2011/aug/05/financial-greek-debt-market-eurozone

this fn guy used to edit the new statesman (well known left-wing magazine) and among other things hired johann hari and put on the cover an image of the star of david impaling the union jack. anyway, he admits to being ignorant of economics. which is fine, because why should the editor of a major political magazine understand economics.

How many editors of news outlets understand it? Or politicians and civil servants?

i think it is kind of impossible not to feel this way at least to some degree unless u are just really stubborn & probably explicitly ideological and think u have it all figured out, or have like a masters degree. i think the reason is the econometric arguments economists use when debating empirics are thoroughly inaccessible to just about everyone in the world, & when translating them into plainspeak a lot of the essence of the argument is lost, which results (ime) in a vertiginous read, especially when reading conflicting viewpoints. it feels as if there's no common logical interpretation of data grounding the debate, and without a strong familiarity with systems of models economists use the whole "this went up, causing that to go down" is very confusing. think this is partly due to conspiratorial ~special interests~ legitimizing supply side arguments (that are often shrouded in fancy complicated theory & econometrics) but also just bc economics is not very advanced as a field yet

my advice is pick a couple writers you feel are reasonable & follow them. paul krugman does
a pretty good job explaining concepts every time they come up on his blog, tone a bit 2 strident though

think this is partly due to conspiratorial ~special interests~ legitimizing supply side arguments (that are often shrouded in fancy complicated theory & econometrics)

& thereby prolonging an unnecessary debate abt basic macro policy

but also just bc economics is not very advanced as a field yet

I think this is a strange way of looking at it. economics is prob the most advanced social science - but it's ultimately a social science, which means there isn't going to be 'a right answer' a lot of the time.

are the economic models that drive "policy" really the most advanced and up-to-date (whichever ideological interest they seem to serve) or is still REALLY just Keynes vs. Hayek? I have had a sneaking suspicion that what's up with the economy is pretty much over everyone's head (or at least over the head of anyone in a position to do something about it). not sure we even have a good model for what's actually "going on" at any given moment.

That graph is 100% accurate and completely useless as a means of understanding economics, finance or money.

Yeah, a lot of crypto supporters think low inflation is a bad thing.

I haven't read the book this is reviewing, so the review may be deeply unfair, but I agree with the review's argument that much of what gets criticised in 'economics' is really just 'the right'. https://t.co/C9qi7XqrIx

— Lafargue (@Lafargue) May 20, 2022

https://www.epi.org/anti-racist-policy-research/disparities-chartbook/#laborcharts

I note that this thread on economics already existed.