The hottest Economic Theory Substack posts right now

And their main takeaways
Category
Top U.S. Politics Topics

Retaliatory Tariffs

David Friedman’s Substack • 260 implied HN points • 14 Feb 25
🇺🇸 U.S. Politics Economic Theory
  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.

Central Bankers Disagree About Gold

QTR’s Fringe Finance • 27 implied HN points • 22 Nov 25
💰 Finance Economic Theory
  1. Gold prices have significantly risen, which some believe signals trouble for the US dollar and the overall financial system. This raises questions about the stability of fiat currencies.
  2. Central bankers have differing views on gold's relevance; while one downplays gold's importance, another sees its rising value as a sign of eroding trust in the dollar. This shows a divide in how they understand economic stability.
  3. Gold remains a crucial asset for central banks, sometimes even more so than government securities, indicating that it is still valued as a safe haven in uncertain times.

Some Austrian Answers

Bet On It • 306 implied HN points • 25 Nov 24
🇺🇸 U.S. Politics Economic Theory
  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.

Bullshit jobs

Logos • 39 implied HN points • 09 May 24
💼 Business Economic Theory
  1. Bullshit jobs are roles that seem pointless or don't add real value to society. People often feel their job is useless because they don't see how it benefits others or the economy.
  2. Many jobs that seem pointless actually exist because of unnecessary processes or rules. For example, lawyers might just deal with silly lawsuits instead of making real progress.
  3. Some jobs can be damaging because they make workers feel unproductive and trapped. It's important to find jobs that give a sense of purpose and real impact.
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The Physiocratic Platform: Banking

Contemplations on the Tree of Woe • 882 implied HN points • 13 Sep 23
💰 Finance 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 Case for Fiat

The Dollar Endgame • 159 implied HN points • 23 Sep 23
💰 Finance Economic Theory
  1. The fiat system's survival doesn't depend on morality, as history shows evil systems have persisted. People may feel powerless against organized evil but may also become complicit in it.
  2. The fiat system, flawed as it is, has worked to lift many out of poverty and fuel innovation. Everyday citizens often lack the financial and political knowledge to make informed decisions about the system.
  3. Bitcoin's adoption faces hurdles as the majority may not share the beliefs of its proponents. Transitioning to a new system might lead to short-term pain and disparities, impacting various demographics differently.

Some Austrian Questions

Bet On It • 251 implied HN points • 20 Nov 24
🇺🇸 U.S. Politics Economic Theory
  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.

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 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.

The Fed’s FAFO Moment Is Here

QTR’s Fringe Finance • 61 implied HN points • 25 Jul 25
💰 Finance Economic Theory
  1. People are now more aware of the Fed's actions and how they affect the economy. Thanks to memes and social media, understanding monetary policy has become easier for everyone.
  2. The Federal Reserve's credibility is fading as more people realize its reliance on low interest rates and money printing. This could lead to major shifts in how money is viewed and used.
  3. With growing knowledge, many are opting for alternatives like Bitcoin over traditional fiat currency. This trend indicates a potential crisis for the Fed if they can't regain public trust.

When we lost our minds: Pt.1 Overview

Erdmann Housing Tracker • 189 implied HN points • 09 Dec 24
💰 Finance Economic Theory
  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.

Why are stocks not dropping?

Philoinvestor • 98 implied HN points • 12 Apr 23
💰 Finance Economic Theory
  1. Comparing bond yields to stock earnings yields may not be the same due to real vs. fixed assets
  2. Real assets like businesses can adjust to inflation, unlike fixed assets like bonds
  3. Investors feel the need to invest in assets that can beat inflation and create value

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 Economic Theory
  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.

Capitalists Do Not Take Risks.

JoeWrote • 130 implied HN points • 19 Nov 24
🇺🇸 U.S. Politics Economic Theory
  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.

Should we tax realized gains?

The Pursuit of Happiness • 1 HN point • 03 Sep 24
💰 Finance Economic Theory
  1. The tax system should focus on consumption instead of income. Taxing what people spend rather than what they earn could simplify things.
  2. A consumption tax could be fairer and encourage saving. It would tax money used for living expenses while allowing people to keep their investments untouched.
  3. Real-world issues with a consumption tax should be dealt with through thought-out adjustments. Instead of going back to an income tax when problems arise, we should refine the consumption tax system.

This Next Market Crash Will Break Our Fragile Brains

QTR’s Fringe Finance • 67 implied HN points • 23 Feb 25
💰 Finance Economic Theory
  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.

Is capitalism making you lonely?

inexactscience • 2 HN points • 13 Aug 24
📖 Philosophy Economic Theory
  1. There is a loneliness epidemic seen around the world, and some people think capitalism might be contributing to it.
  2. Research shows a moderate negative relationship between economic freedom and loneliness. When economic freedom increases, loneliness tends to decrease.
  3. While there are arguments that capitalism could increase loneliness, such as encouraging long working hours and individualism, the data suggests that capitalism, in fact, may help reduce feelings of loneliness.

The Housing Shortage by Metro Area, Part 4

Erdmann Housing Tracker • 84 implied HN points • 02 Dec 24
🇺🇸 U.S. Politics Economic Theory
  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.

The Capitalist is Useless.

JoeWrote • 92 implied HN points • 15 Oct 24
🇺🇸 U.S. Politics Economic Theory
  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.

Why Wages Slowed More In Japan Than Elsewhere

Japan Economy Watch • 159 implied HN points • 13 Dec 21
💰 Finance Economic Theory
  1. Wages in Japan have not just slowed down but actually fallen, unlike in other rich countries where wages have been suppressed.
  2. The widespread slump in wage growth goes against economic theory, signaling a shift in how consumer demand and wages have traditionally grown alongside output.
  3. One main reason for Japan's wage decline is the rise of poorly paid non-regular workers, showcasing the impact of political factors on wage disparities.

Unique Locations of Rich Cities

Erik Examines • 44 implied HN points • 16 Dec 24
💾 History Economic Theory
  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.

Why Price Stability Is A Dangerous Illusion

QTR’s Fringe Finance • 14 implied HN points • 15 Jul 25
💰 Finance Economic Theory
  1. Many economists believe that keeping prices stable is really important for a healthy economy. They think it helps businesses understand consumer needs better and allocate resources effectively.
  2. However, the idea that money is neutral and only affects price levels can be misleading. When money supply changes, it can cause unfair advantages for some people over others, which leads to wealth redistribution.
  3. Overall, the belief in price stability might hide the real impacts of inflation. Just because prices seem stable doesn’t mean that the economy is healthy; it may actually create problems down the line.

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 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.

Assessing altruism

Model Thinking • 19 implied HN points • 09 Jul 23
🔬 Science Economic Theory
  1. Intergenerational altruism in the Barro-Becker model may need to be as low as 0.09 for a stable solution, which seems paradoxical considering the proportion of a parent's and child's consumption.
  2. Potential explanations for this paradox include scale economies in household production, children being viewed as 'utility monsters,' and parents seeing children as a prestige good.
  3. The discrepancy in altruism values between parents and consequences may imply that individuals are not consequentialists and may prioritize existing utility over potential future utility.

Why is my Electric Company Using Uber-Style Surge Pricing?

JoeWrote • 33 implied HN points • 31 Oct 24
🇺🇸 U.S. Politics Economic Theory
  1. Xcel Energy is using surge pricing for electricity to increase profits, especially during peak hours. This could make it hard for people to manage their bills.
  2. The idea that capitalism leads to innovation is challenged, as many believe companies find new ways to charge more rather than truly improve consumer life.
  3. Consumers feel trapped by energy monopolies, and experts suggest shifting towards public utilities for better service and prices.

On 'Bullshit Jobs'

Castalia • 39 implied HN points • 07 Feb 23
🎭️ Culture Economic Theory
  1. Many people feel their jobs don't really contribute anything meaningful. In fact, studies show that a significant number of workers believe their roles are pointless.
  2. The concept of 'bullshit jobs' challenges how we see work in capitalism. It suggests that some jobs exist not to produce value but rather to maintain a system that may not actually be efficient.
  3. A big issue isn't just the jobs themselves, but how they affect people's souls. We need to focus on creating opportunities for people to do what they love and have dignity in their work.

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 Economic Theory
  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.

Gold Is Back—And So Is Judy Shelton

QTR’s Fringe Finance • 25 implied HN points • 13 Nov 24
💰 Finance Economic Theory
  1. Gold prices are rising due to economic and geopolitical concerns, attracting more interest from central banks. This suggests that many countries are starting to value gold again.
  2. Judy Shelton proposes a new kind of bond that would let people redeem their bonds for gold or dollars, giving the public more control over their money. This could help stabilize the economy.
  3. Shelton believes that moving back to a gold standard could improve trust in the financial system and reduce government control over money supply, which many people see as a good thing.

Can Bitcoin Save The U.S. Dollar?

QTR’s Fringe Finance • 23 implied HN points • 01 Dec 24
💰 Finance Economic Theory
  1. Some politicians suggest creating a Bitcoin reserve for the US, thinking it could help the dollar's value and stability. They believe having Bitcoin might make the US economy stronger.
  2. Having reserve assets like Bitcoin is not as necessary for the US dollar, which is already powerful globally. The dollar doesn't need extra support from things like Bitcoin because it's already widely used.
  3. Adding Bitcoin to the US reserve wouldn’t really help the dollar; it might just serve to enrich some investors. The government should focus on what truly supports the economy, not on trendy assets.

An Austrian Perspective on Tariffs

QTR’s Fringe Finance • 20 implied HN points • 05 Dec 24
🇺🇸 U.S. Politics Economic Theory
  1. Tariffs are taxes on imported goods that can raise prices for consumers and protect domestic industries. When tariffs go up, the cost of imports usually rises, which can lead to higher prices in stores.
  2. Using tariffs to fix trade imbalances often doesn't help because it doesn't address the real issue of competitiveness in industries. Just raising prices on foreign goods doesn't make local products better if they aren't competitive.
  3. The Austrian view suggests that free trade is better for everyone because it allows countries to specialize where they are most efficient. Tariffs can mess up this system, leading to less efficient production and higher prices overall.

The Sweet Escape

Malt Liquidity • 6 implied HN points • 22 Jul 25
💰 Finance Economic Theory
  1. The value of money is shifting away from productivity, leading to odd situations where attention and hype are becoming more important than real earnings. This change affects how people view investments.
  2. Many markets are becoming increasingly focused on a few popular sectors, creating bubbles that may burst. It seems like only a small number of stocks are generating most of the trading volume.
  3. Technology investments are growing, but if the benefits aren't shared fairly, wealth disparities will worsen. This could lead to societal issues as people's needs aren't being met.

Was the Continental Dollar an Early Failure with Fiat Money?

Economic Forces • 4 implied HN points • 26 Jun 25
💰 Finance Economic Theory
  1. The Continental dollar was created to fund the Revolutionary War, but it lost value quickly. This happened because there were too many of them and not enough trust in their worth.
  2. The currency was designed like a bond, meaning it wasn't just regular money meant for buying things, but more like an IOU that was supposed to be repaid later.
  3. The failure of the Continental dollar teaches us that for any money system to work, people need to believe in its value and the promise to redeem it; if that trust is lost, the money collapses.

[Re-post] When A Dollar Isn't a Dollar

Economic Forces • 4 implied HN points • 19 Jun 25
💰 Finance Economic Theory
  1. Banks hold physical money to back the digital dollars they create, ensuring people can get their money when they want it.
  2. A new plan suggests issuing digital dollars without holding any real money, relying instead on supply and demand to keep their value steady.
  3. However, if people stop trusting these digital dollars or start selling them, their value can drop quickly, as seen when a stablecoin recently lost its peg to the dollar.

Is macroeconomics a mature science?

Klement on Investing • 3 implied HN points • 03 Jul 25
💰 Finance Economic Theory
  1. Macroeconomics has established theoretical frameworks that guide research and models, but these may not always be the best fit for real-world behavior.
  2. The predictive power of macroeconomic models is limited, making them less useful for investors but potentially helpful in forecasting broad economic trends.
  3. While there is some agreement on methodologies, many practitioners do not keep up with new findings, and integration between different fields is not as strong as it could be.

Philosophical economics: From individualism to libertarianism

Klement on Investing • 6 implied HN points • 16 Jan 25
📖 Philosophy Economic Theory
  1. Individualism, while beneficial for starting businesses, can lead to selfishness if taken too far. A healthy balance between individual rights and community needs is important for society's well-being.
  2. Libertarianism, which promotes extreme individualism, can create dangers for society by ignoring the communal nature of humans. This can lead to inequality and a breakdown in trust among people.
  3. When business and politics prioritize profit over social responsibility, it can harm society and increase inequality. History shows that high inequality can lead to serious problems for both communities and economies.

Data Update 4 for 2022: Risk = Danger + Opportunity!

Musings on Markets • 19 implied HN points • 09 Feb 22
💰 Finance Economic Theory
  1. Risk is both danger and opportunity. Taking big chances can lead to rewards, but it also comes with the possibility of losing money.
  2. It's important to balance between risk and reward. If you don't expect a good return from a risky investment, you might be wasting your time.
  3. Real risk comes from not knowing the future, not just bad outcomes. It's about the uncertainty of what may happen next.

Casting doubt on risk preferences

Klement on Investing • 2 implied HN points • 17 Jun 25
💰 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.

Philosophical economics: Status anxiety

Klement on Investing • 4 implied HN points • 09 Jan 25
📖 Philosophy Economic Theory
  1. Status anxiety makes people feel like they are doing worse than their peers, leading them to take bigger risks in their investments or choices. This could mean putting themselves in tough situations just to feel they might catch up.
  2. Recent events like Brexit and the election of Donald Trump can be seen as responses to this anxiety. People felt left behind, and their desire to disrupt the system was a way to express their frustration.
  3. Economic changes, like slower growth and higher taxes, can worsen the feelings of anxiety among the less well-off. When people feel they have no control, they often react in ways that can hurt the economy instead of helping it.