In every stage of my formal schooling – from high school to college to graduate school – I took courses in economics. Yet with all that education I struggled to understand a seemingly simple question: How does the economy actually work?
Sure, I can still draw supply and demand curves or give the equation for GDP (Y = C + I + G + (X − M)). But when it comes to picturing a reasonably functional model of how it all fits together, I was at a loss. Until a few years ago when Ray Dalio came to my rescue.
Dalio is the founder of the “world’s richest and strangest hedge fund” and #48 on Forbes list of richest people in America. But more importantly (at least for our purposes), Dalio is also the creator and narrator of the 30-minute video, “How the Economic Machine Works.”
Dalio’s video is one of the best explanations of economics I’ve ever seen. I’ve watched it at least half a dozen times over the past three years and highly recommend setting aside half an hour to watch this entire video.