The hottest Economic Theory Substack posts right now

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The Three Types of Money Behind Silicon Valley's Rise to Dominance

The Future, Now and Then • 110 implied HN points • 25 Feb 25
💰 Finance Investing Stock Market Speculation Economic Theory Venture Capital
  1. Silicon Valley's success relies on three types of money: government contracts, product revenues, and speculative investments. Each plays a different role in funding and shaping tech companies.
  2. Many tech stocks are driven by 'vibes' rather than actual profits. This means their value can fluctuate wildly based on investor sentiment instead of real financial performance.
  3. When speculative finance overshadows the real production of goods and services, it can lead to an unstable economy. Companies need a balance of funding sources to grow healthily and sustainably.

Progressives take their best shot at Abundance (but it falls short)

Noahpinion • 14588 implied HN points • 17 Jun 25
🇺🇸 U.S. Politics Policy Analysis Progressivism Regulation Economic Theory Political critique
  1. Critics of the book 'Abundance' often haven't read it and misunderstand its ideas. Instead of addressing the arguments, they focus on insulting the authors.
  2. The backlash against 'Abundance' seems to stem from its author Ezra Klein's influence rather than the book's actual content. Some progressives feel threatened by a shift in focus towards empowering the government.
  3. One critic, Sandeep Vaheesan, does engage with the book but misinterprets its core arguments. He points out that while 'Abundance' suggests empowering the government, it doesn't clearly outline the specific actions needed to achieve that.

Too much or not enough of Ricardo?

Global Inequality and More 3.0 • 1102 implied HN points • 13 Jun 25
💰 Finance Economic Theory Globalization Inequality Political Economy
  1. David Ricardo's economic ideas are still influential, but they often ignore important social classes and conflicts. It's crucial to consider how class affects the economy.
  2. The effects of globalization are often viewed just through a Western lens, which can overlook the benefits it has brought to many people in other parts of the world. This creates a skewed understanding of economic progress.
  3. Critiquing historical economic figures like Ricardo should include recognizing their contributions to understanding social dynamics, not just focusing on their abstract theories.

DRAFT: Prosperity & "Utopia": The Moving Target :: History of Economic Growth Lecture Notes 1.5

Brad DeLong's Grasping Reality • 199 implied HN points • 17 Jun 25
📖 Philosophy Economic Theory Political Philosophy Historical Analysis Cultural critique
  1. Utopias represent different ideas of a perfect society, like order, simplicity, pleasure, freedom, and collective purpose. However, real examples often don't match these ideals.
  2. Economic growth is important, but it doesn't guarantee happiness or satisfaction. It's complicated because people might just want more, rather than knowing what truly makes them happy.
  3. Historical models of societies like Sparta, Arcadia, and Rome show that chasing perfection can lead to problems. It's vital to think critically about what we truly want from life.

Macroeconomics: Some Defects

In My Tribe • 486 implied HN points • 29 May 25
💰 Finance Macroeconomics Banking Economic Theory Fiscal policy Financial Sector
  1. Macroeconomics often treats the economy like a simple factory that can be controlled centrally, but the reality is much more complex with many different goods and services. It's not just about one measure like GDP.
  2. Many economics students learn about macro without understanding the important role banks play in the economy. Banks help manage risks and their crises can lead to major economic downturns.
  3. Macroeconomic theories are often presented as timeless, but they should consider historical changes and events that shape the economy. Each economic crisis is unique and influenced by different circumstances over time.
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This Next Market Crash Will Break Our Fragile Brains

QTR’s Fringe Finance • 67 implied HN points • 23 Feb 25
💰 Finance Market Trends Investment Strategies Economic Theory Behavioral Finance Financial Risks
  1. The next market crash may have serious psychological effects on investors. Many people today haven't experienced a long-lasting downturn, which could be shocking for them.
  2. Current stock prices are very high compared to earnings, which might lead to a big correction. People are buying stocks without truly understanding their worth.
  3. The economy is facing challenges that could lead to stagflation. If that happens, it might hurt everyday people more than the wealthy, widening financial inequalities.

The Fed, With No Earnings, Is Taking Us on a Magic Carpet Trip

QTR’s Fringe Finance • 19 implied HN points • 26 Feb 25
💰 Finance Monetary Policy Federal Reserve Economic Theory Government spending
  1. The Federal Reserve is spending more money than it is earning, leading to significant losses. This means they can't send money back to the Treasury, which affects taxpayers.
  2. The Fed's unusual accounting strategy allows them to classify these losses in a way that keeps them operating. This raises questions about how they can sustain this approach in the long term.
  3. People are concerned about the impact of the Fed's spending on inflation and government debt. Many wonder how this will affect the economy and taxpayers in the future.

Retaliatory Tariffs

David Friedman’s Substack • 260 implied HN points • 14 Feb 25
🇺🇸 U.S. Politics Trade policy Tariffs Economic Theory Political strategy International relations
  1. Retaliatory tariffs are taxes on imports that match the tariffs a country imposes on exports. They aim to make both countries reconsider their tariff policies.
  2. If one country sets high tariffs, the other may respond with corresponding tariffs, which might lead to both countries lowering their tariffs for mutual benefit.
  3. The idea of reciprocal tariffs can help simplify trade negotiations, but it can also create loopholes where countries find ways to keep protections in place without directly using tariffs.

The Frankfurter Index

Doomberg • 6098 implied HN points • 30 Jan 25
💰 Finance Investment Currency Commodities Economic Theory Financial Analysis
  1. The price of everyday items can help us understand the true value of money over time. For example, the cost of hot dogs compared to the price of gold shows how much the dollar has changed.
  2. While the value of the US dollar has been decreasing, it's important to look at prices in relation to gold to see the bigger picture. Gold has been a constant measure of value throughout history.
  3. Some people worry that we will run out of oil, but advancements in technology suggest otherwise. Oil and gas companies are innovating and have plenty of resources available.

Milton Friedman’s Weird Abolition List

Bet On It • 171 implied HN points • 03 Jun 25
🇺🇸 U.S. Politics Government Policy Economic Theory Public Finance Regulation
  1. Milton Friedman suggested abolishing certain government policies he viewed as unnecessary. Some of these policies include price supports for agriculture and minimum wage laws.
  2. He believed that many interventions weren't justified by their outcomes, indicating a need for less government control in various sectors.
  3. Friedman's focus was on promoting free-market principles, but his priorities differed from contemporary issues, revealing changes in the economy and regulation over time.

Chartbook 342 Are we all dead in the long run? John Maynard Keynes and the politics of time

Chartbook • 2617 implied HN points • 22 Dec 24
🇺🇸 U.S. Politics Economic Theory Political theory Future studies Historical Analysis
  1. Keynes' famous quote 'In the long run we are all dead' is often misunderstood. It doesn't mean he didn't care about the future; instead, he criticized how some economists ignore present issues in favor of uncertain future predictions.
  2. Keynes saw the future as full of possibilities, suggesting we should focus on bold and significant plans that address current crises rather than worrying too much about long-term outcomes.
  3. He believed in experimentation and creativity in political action, encouraging open-ended approaches to solve today's problems while keeping an eye on the potential futures we can create together.

Physiocratic Platform: Transaction Tax

Contemplations on the Tree of Woe • 1266 implied HN points • 11 Jan 25
🇺🇸 U.S. Politics Tax policy Government Economic Theory Public Finance Legislation
  1. Transaction taxes are small fees added to all money exchanges, helping to fund government services. They can be applied to everything from buying groceries to trading stocks.
  2. A broad transaction tax could simplify the tax system by ensuring everyone contributes, especially from financial activities that often go untaxed. It aims to promote fairness among all economic participants.
  3. The proposed tax system would lower the overall tax burden for most people while ensuring that the rich and businesses pay their fair share, potentially reducing unfairness in current tax practices.

Will Elon's Team of Elite Math Twinks Tell Him That You Can't Close a $1.8 Trillion Budget Gap By Eliminating a $0.04 Trillion Agency?

I Might Be Wrong • 25 implied HN points • 06 Feb 25
🇺🇸 U.S. Politics Budgeting Government Federal Spending Policy Analysis Economic Theory
  1. Elon Musk's team is trying to find ways to cut a massive budget deficit, but suggestions like eliminating a small agency won't make a real difference.
  2. Young and inexperienced teams can bring fresh ideas, but they might also lack the courage to challenge big figures when things don't add up.
  3. Real budget solutions will likely involve tough decisions like tax increases or cuts to popular programs, which are often avoided in flashy discussions.

DeepSeek: Is this Jevon's Cope?

Mule’s Musings • 635 implied HN points • 29 Jan 25
🕹 Technology AI Infrastructure Market Trends Economic Theory
  1. Price changes can greatly influence how people feel about markets, leading to strong swings in sentiment. This idea is evident in the ongoing debates around AI infrastructure spending.
  2. The Jevons Paradox suggests that as technology makes things cheaper, demand often increases instead of decreases. This means that even with better technology, we may use more resources rather than less.
  3. There is a real risk that supply can exceed demand in the short term, impacting the market negatively. While the long-term picture may be optimistic, the immediate situation can be very different.

My Social Journey Toward the Right

In My Tribe • 1245 implied HN points • 15 Nov 24
🇺🇸 U.S. Politics Political Ideologies Social influence Economic Theory Political History
  1. Beliefs are influenced by the people we trust. For example, trusting certain professors or colleagues can shape your view on politics.
  2. Life experiences, like working in different environments, can also change your political stance. Being around business-minded people can lead you to adopt more right-leaning views.
  3. Understanding complex issues, such as economics and evolution, can lead to a more nuanced perspective on human behavior and society, making one appreciate different political ideologies.

The Physiocratic Platform: Taxation

Contemplations on the Tree of Woe • 1560 implied HN points • 11 Oct 24
🇺🇸 U.S. Politics Tax policy Federal Budget Government reform Economic Theory Political Philosophy
  1. There are many types of taxes in the U.S., which can make the system very confusing. The government collects money through taxes like income tax, sales tax, and property tax to fund its activities.
  2. A proposed way of understanding taxes is to link them directly to the services the government provides. For example, taxes could cover the cost of maintaining order and protecting citizens.
  3. One suggested tax is a poll tax, which would be paid by everyone, regardless of income. This tax could help fund voting processes and personal protection, though it might be seen as unfair for low-income households.

Rich and Poor: How Things Work

Fake Noûs • 702 implied HN points • 18 Jan 25
🇺🇸 U.S. Politics Economic Theory Wealth Inequality Political Ideologies Social Mobility Labor Economics
  1. The left and right have very different views on how wealth is created and who deserves it. Leftists see rich people as taking advantage of workers, while rightists believe everyone contributes to wealth creation.
  2. Many people can move up the economic ladder, and success isn't solely about one's environment or education. Personal talent and hard work play a big role.
  3. The rich provide essential resources that support society, while the poor often rely on the wealthy for stability. Instead of resenting the rich, the poor could recognize their contributions.

When we lost our minds: Pt.1 Overview

Erdmann Housing Tracker • 189 implied HN points • 09 Dec 24
💰 Finance Economic Theory Market Analysis Housing policy Financial Crisis Investment Strategies
  1. Many people believe the 2008 financial crisis was inevitable, but this oversimplifies what really happened. It's important to question how we understand the events leading up to the crisis.
  2. High home prices and rental costs are more about limited housing supply than just low interest rates. Building more homes could help address these issues.
  3. Experts often misunderstood the role of foreign capital and how it influenced the US economy. Rather than viewing borrowing negatively, it can be a way to invest in growth.

Crypto is chain-letter technology

In My Tribe • 470 implied HN points • 26 Jan 25
🔮 Crypto Cryptocurrency Investment Blockchain Finance Economic Theory
  1. Cryptocurrencies like Bitcoin can be compared to chain letters, where early participants may make money while later ones might lose everything. It only works as long as new buyers keep joining in.
  2. The American dollar, being a fiat currency, also operates like a chain letter. It's based on trust and belief rather than a physical backing, and its value can decline over time.
  3. Some people view Bitcoin as a safe way to protect against inflation, but switching from the US dollar to Bitcoin may not solve the fundamental issues with trust and value in these systems.

The Physiocratic Platform: Land Tax

Contemplations on the Tree of Woe • 1108 implied HN points • 27 Oct 24
🇺🇸 U.S. Politics Tax policy Government Structure Economic Theory Land use Political Reform
  1. A land value tax (LVT) is different from a property tax because it only taxes the value of the land itself, not any buildings on it. This means it encourages landowners to use their land efficiently.
  2. Implementing a 2% LVT could raise a lot of money for government services while avoiding economic issues that other taxes might cause. It's seen as a less harmful option for funding government needs.
  3. There are ways to protect homeowners from being forced out of their homes due to rising land taxes, like exemptions for primary residences or allowing tax deferrals until the property is sold.

Economics Links, 1/4/2024

In My Tribe • 501 implied HN points • 04 Jan 25
💰 Finance Market Trends Economic Theory Regulation Crypto Investing
  1. Paul Krugman talks about how gambling on asset prices is like a natural Ponzi scheme. People get caught up with optimism, which can lead to bigger financial risks.
  2. There are new types of market leaders, like Michael Saylor of MicroStrategy, who influence markets and create a kind of cult-like following among investors.
  3. In Argentina, Javier Milei is changing things by cutting government departments and privatizing state companies. His aim is to weaken the power of his political rivals.

Economics Links

In My Tribe • 455 implied HN points • 21 Dec 24
💰 Finance Economic Theory Regulation Labor Market Cryptocurrency Market Trends
  1. Academic economics has a culture that can feel snobby. Many economists avoid challenging well-known figures out of fear of seeming unimportant.
  2. The job market has changed a lot over the years, moving from agriculture to manufacturing, and now to service-based jobs. This shift reflects changes in demand and productivity.
  3. Cutting regulations can significantly lower prices, leading to increased real income for people. This could result in economic growth that exceeds what many economists expect.

Fischer Black vs. Monetarism

In My Tribe • 455 implied HN points • 14 Dec 24
💰 Finance Monetary Policy Economic Theory Inflation Market Dynamics Financial Systems
  1. Fischer Black believed that both money supply and price levels are based on collective beliefs rather than strict numbers. People accept money because they trust others will accept it too.
  2. Inflation and prices are influenced more by market behavior and expectations rather than solely by money supply. This means prices can change based on what people think will happen in the future.
  3. The relationship between money and prices might be less reliable than before. As people use less cash and more digital forms of payment, traditional ways to predict inflation might not work well anymore.

Economics Links

In My Tribe • 394 implied HN points • 24 Dec 24
💰 Finance Macroeconomics Interest Rates Consumption Inflation Government Policy Economic Theory
  1. Cato's wish list includes ideas for government reform, like raising Social Security retirement ages. Some of these suggestions might not be politically popular, but they show a push for change from a libertarian angle.
  2. There's a big difference in how academics and policymakers view the impact of interest rates on consumption. Academics think higher rates could boost future consumption, while policymakers see them as a negative for the economy.
  3. Scott Sumner highlights the issues with measuring inflation. He argues that inflation numbers are often confusing and imprecise, which also affects how we understand productivity changes.

Casting doubt on risk preferences

Klement on Investing • 2 implied HN points • 17 Jun 25
💰 Finance Investing Risk management Behavioral Finance Economic Theory
  1. A recent study shows that how we measure risk preferences might not be accurate. People might choose safer options because they find complex math hard, not just because they're afraid of taking risks.
  2. Participants in the study reacted similarly whether faced with risky choices or complex ones. This raises doubts about whether traditional risk assessments truly reflect someone's risk tolerance.
  3. The results suggest that some risk assessments might actually measure how much people dislike complicated decisions instead of their real risk attitudes. We need to rethink how we evaluate risk preferences.

Inequality is overwhelmingly between firms, not within

Something to Consider • 99 implied HN points • 13 Jul 24
💰 Finance Income Inequality Corporate Structure Economic Theory Labor Market Public Policy
  1. Income inequality is mainly based on differences between companies, not just between workers in the same company. Some companies pay their workers a lot more than others, and that's a big part of why inequality has grown.
  2. About 40% of this inequality comes from workers choosing to work at different firms. The other 20% is because some firms are simply more productive or profitable than others.
  3. We should focus more on how many highly skilled workers are earning a lot overall, rather than just looking at top executives. More people than ever have high incomes, showing that there's great potential for those who can add value in the economy.

The existence of the monopsony model does not imply a minimum wage is optimal

Something to Consider • 99 implied HN points • 12 Jul 24
🇺🇸 U.S. Politics Economic Theory Market Power Public Policy
  1. The monopsony model suggests there might be just one buyer for labor, which can create wage issues. However, just because this model exists doesn't mean we should automatically support a minimum wage.
  2. Implementing a minimum wage isn't straightforward because we can't easily measure supply and demand for labor. Different firms have different needs, making a one-size-fits-all wage unrealistic.
  3. Studies on minimum wage effects are mixed, but many show that while it can help some workers, it can also lead to slight job losses and reduced hours. It's also more complex than just raising pay; sometimes, directly giving support to people may be a better solution.

Capitalists Do Not Take Risks.

JoeWrote • 130 implied HN points • 19 Nov 24
🇺🇸 U.S. Politics Capitalism Labor Rights Economic Theory Wealth Inequality Political Economy
  1. Capitalists often claim they take risks when starting businesses, but the reality is they just risk losing money, while workers create the real value.
  2. The idea that financial risk deserves the biggest reward is flawed. Labor plays a crucial role in producing wealth and should be valued more than just money at stake.
  3. Ultimately, capitalists face the possibility of becoming workers themselves if their businesses fail, but this isn't much of a risk compared to the actual physical and personal risks that workers take daily.

The Housing Shortage by Metro Area, Part 4

Erdmann Housing Tracker • 84 implied HN points • 02 Dec 24
🇺🇸 U.S. Politics Housing policy Real Estate Economic Theory Urban planning
  1. There is a housing shortage, which means there are not enough homes available for people who need them. This shortage can lead to high prices and long waiting lists for affordable housing.
  2. When rent control is put in place, it may help some tenants afford their homes but can also lead to declining quality of living conditions. Property owners often stop maintaining their properties, which can create additional problems.
  3. Access to mortgage loans is important for homebuyers. If people can't get loans to buy homes, it reduces the amount of housing being supplied in the market, contributing to the overall shortage of available homes.

DeFi Education's Holiday Book List 2023

DeFi Education • 739 implied HN points • 05 Dec 23
💰 Finance Investing Book Reviews Market Analysis Economic Theory Personal Finance
  1. The holiday season is a great time for reading, and the recommended books cater to different interests for personal growth.
  2. Books like 'The Alchemy of Finance' and 'Undermoney' offer unique insights into finance and investing, influenced by real experiences and theories.
  3. Many of the books are available for free online, making it easy for anyone to dive into these enriching materials.

Some Austrian Answers

Bet On It • 306 implied HN points • 25 Nov 24
🇺🇸 U.S. Politics Economic Theory Libertarianism Philosophy Behavioral Economics
  1. The author's views on Austrian economics have not changed much over the years, but they've become more open to certain ideas, particularly regarding human behavior in economics.
  2. They believe that Austrian economists should focus more on using empirical psychology and less on philosophical debates to better understand economic behaviors.
  3. The author finds that reading Austrian economists has inspired new libertarian policy ideas and encourages others to do the same for creative thinking.

Unique Locations of Rich Cities

Erik Examines • 44 implied HN points • 16 Dec 24
💾 History Urban Development Economic Theory Cultural Exchange
  1. Cities become rich not just because of resources, but often due to their location. Being in the right place for trade can make a huge difference.
  2. Historical and modern successful cities like Singapore, Amsterdam, and London thrived because they were trade hubs. They had good harbors and access to important waterways.
  3. Even if a city has challenges like diversity or resource scarcity, its strategic location can lead to economic success. This shows that trade routes and connections can often matter more than local resources.

Thinking About Teaching Economic History to the First-Year Economic History Graduate Students This Forthcoming Semester

Brad DeLong's Grasping Reality • 199 implied HN points • 02 Jan 25
🚌 Education Economic History Teaching Methods Historical Analysis Economic Theory
  1. Economic history helps us understand how preferences and market structures formed over time. Looking back can show us why things are the way they are today.
  2. It's important for economics students to learn about the historical context of economic principles. This context can enrich their understanding and practical applications in the real world.
  3. Questions about past economies can shed light on current issues, like inequality and technology progress. Exploring these questions can lead to valuable insights for today's economists.

Some Austrian Questions

Bet On It • 251 implied HN points • 20 Nov 24
🇺🇸 U.S. Politics Libertarianism Economic Theory Political Philosophy Public Policy
  1. Many people start with a simple understanding of economic theories, often identifying with one school without fully knowing its details. It takes time and deeper study to really understand the nuances between different economic thinkers.
  2. As people grow and learn, they often reassess their beliefs about economics and may find they resonate more with certain schools over others. It's okay to change your mind as you gain more knowledge.
  3. A strong pull toward empirical data and analysis can lead someone to align with mainstream economics rather than strictly adhering to one specific school of thought, like the Austrian School.

The Capitalist is Useless.

JoeWrote • 92 implied HN points • 15 Oct 24
🇺🇸 U.S. Politics Capitalism Socialism Economic Theory Labor Rights Wealth Inequality
  1. Capitalists were once important for society by helping to build industries and trade. Now, they are seen as less useful because most work is done by the people, while capitalists take the profits without doing much themselves.
  2. Modern technology comes a lot from public funding and resources, showing that capitalists often profit off ideas created by the public. So, people can question what actual role capitalists play in today's economy.
  3. Instead of relying on capitalists, society could benefit more from worker-owned businesses and government-managed industries. This would allow everyone to get fair value for their work and reduce exploitation.

The O-Ring Theory of Economic Development

Something to Consider • 59 implied HN points • 15 Jun 24
💼 Business Economic Theory Human Capital Productivity Trade policy Labor markets
  1. Production can be broken down into many steps, and a failure at any step can ruin the entire process. The skill level of workers, known as human capital, plays a key role in this.
  2. Regions can be stuck in a bad place with low investment in education due to a lack of returns. Immigration can help individuals escape this situation, leading to better education and economic growth in both their new home and their original country.
  3. Trade policies can significantly impact production. Quotas can be much more damaging than tariffs because they disrupt the entire production process, leading to larger losses than expected.

Did Wages Really Rise The Fastest In 28 Years?

Japan Economy Watch • 439 implied HN points • 09 Jul 23
💰 Finance Wages Inflation Economic Theory Consumer spending
  1. Wages per hour, not per month, need to be examined to truly understand wage growth
  2. The data showing nominal wages growth doesn't necessarily reflect a true increase in pay, as it may be influenced by other factors like scheduled hours of work
  3. The focus on nominal wages by the Bank of Japan is aimed at achieving a specific inflation target, which may not fully account for the real impact on consumers

The Physiocratic Platform: Banking

Contemplations on the Tree of Woe • 882 implied HN points • 13 Sep 23
💰 Finance Banking Policy Reform Economic Theory
  1. The Physiocratic Platform focuses on reforming the banking system by replacing the Federal Reserve and fractional-reserve banking.
  2. The Chicago Plan advocates for full-reserve banking and government-issued equity money to avoid debt and inflation.
  3. Implementing the Chicago Plan can regulate credit cycles, prevent bank runs, reduce government debt, and boost long-term economic output.

The Sword of Damocles

The Dollar Endgame • 319 implied HN points • 30 Aug 23
💰 Finance Global Markets Economic Theory Central Banks Currency Markets Monetary Policy
  1. The global financial system heavily depends on the US dollar, causing a constant demand for dollars worldwide.
  2. Triffin's Dilemma and the Dollar Milkshake Theory highlight the systemic risks and implications of the US dollar's dominance.
  3. The Fed plays a critical role in stabilizing the global financial system by supplying dollars; any missteps could lead to widespread financial instability.

There Are Three Ways to Get Rid of Inflation. One Is "Impossible" and One Will Destroy the Country.

Surviving Tomorrow • 314 implied HN points • 18 May 23
💰 Finance Inflation Taxation Wealth Distribution Monetary Policy Economic Theory
  1. Inflation impacts different groups differently: savers punished, poor robbed, debtors rewarded.
  2. Eradicating inflation can be done by destroying the working class, taxing the rich, or creating anti-inflation money.
  3. Anti-inflation money involves investing in new assets, taxing back excessive money, and destroying it for common well-being.