In every stage of my formal schooling – from high school to college to graduate school – I’ve taken courses in economics. Yet with all that education I still struggle 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’m at a loss. Fortunately, Ray Dalio has come to my rescue.
Dalio is the founder of the “world’s richest and strangest hedge fund” and #31 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 twice already and highly recommend setting aside half an hour to watch this entire video.