Game of Theories: The Keynesians

Note: This is post #113 in a weekly video series on basic economics. “One point of contention among economists is the causes of business cycles and recessions,” says economist Tyler Cowen. Continue Reading...

Understanding the Great Depression

Note: This is post #112 in a weekly video series on basic economics. During the “Roaring Twenties” the economy was booming—growing at nearly three percent per year—while inflation stayed near zero percent. Continue Reading...

An introduction to business fluctuations

Note: This is post #109 in a weekly video series on basic economics. Rather than moving at a steady pace, economic growth ebbs and flows and has booms and busts. Economists refer to these ups and downs around a country’s long-term GDP growth trend as “business fluctuations.” Continue Reading...

Why governments create inflation

Note: This is post #108 in a weekly video series on basic economics. Most people do not like when prices rise so most people do not like inflation. But there is one sector that sometimes finds inflation beneficial: government. Continue Reading...

Understanding the causes of inflation

Note: This is post #107 in a weekly video series on basic economics. In the last post in this series we learned that according to the quantity theory of money, if the amount of money in an economy doubles the price levels also double, causing inflation. Continue Reading...

Understanding the quantity theory of money

Note: This is post #106 in a weekly video series on basic economics. The quantity theory of money states that there is a direct relationship between the quantity of money in an economy and the level of prices of goods and services sold. Continue Reading...

How do we measure inflation?

Note: This is post #105 in a weekly video series on basic economics. Inflation is an average rise in prices. But how exactly is this average rise in prices measured? In this video by Marginal Revolution University, Alex Tabarrok explains how inflation in the United States can be measured using the Bureau of Labor Statistics’ Consumer Price Index (CPI)—a weighted average of the price increases. Continue Reading...