The hottest Economics Substack posts right now

And their main takeaways
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Top Business Topics

The new divestment trend

Klement on Investing • 2 implied HN points • 11 Nov 24
💰 Finance Economics
  1. Most investors in Germany are not interested in sustainable investments. More than half of them prefer traditional investing and don't plan to change that.
  2. Social influence plays a big role in investment choices. If friends and family are into sustainable investing, it’s likely others will be too, but the opposite is also true.
  3. Many people who divest from sustainable investments do so because they aren't seeing good returns. They feel like their money could earn more elsewhere.

Five Revealing Pictures

What's Important? • 7 implied HN points • 07 Jul 23
💰 Finance Economics
  1. Even professional investors sell stocks worse than randomly.
  2. We pay more attention to what makes us different than what makes us alike.
  3. The shorter your time-horizon, the more people you're playing against.

The Slasher Revolution

Perspective Agents • 6 implied HN points • 14 Sep 23
💼 Business Economics
  1. Leaders need to be multiliterate to navigate future worlds.
  2. Disruptions challenge leaders, creating perspective deficits.
  3. Future leaders should embody qualities of guardians, guides, pioneers, and innovators, like Slashers.

Rashida Tlaib and Jamaal Bowman Demonstrate How to Not Think About Economics

I Might Be Wrong • 4 implied HN points • 13 Mar 24
🇺🇸 U.S. Politics Economics
  1. Rashida Tlaib and Jamaal Bowman proposed a bill called The Living Wage for Musicians Act targeting Spotify and its competitors.
  2. The bill aims to triple payments to artists, raising them from 0.3 cents per stream to 1 cent per stream, but faces obstacles as it seeks to increase subscription fees and cap payments.
  3. The bill reveals flawed economic thinking commonly found on the far left, showing how marginalized loons can be thwarted by those with more knowledge.

Issue 12: Houston, we have a solution

The Works in Progress Newsletter • 6 implied HN points • 07 Sep 23
📰 News Economics
  1. Malaria vaccine development took decades but can be expedited through Advance Market Commitments.
  2. Houston has successfully implemented densification around the city centers through local opt-outs to up-zoning reforms.
  3. Dealing with low fertility rates involves understanding historical factors like household technologies, medical interventions, and housing prices.
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Can demographics undermine Europe’s dominance in global trade?

Klement on Investing • 2 implied HN points • 30 Oct 24
💼 Business Economics
  1. Europe's working-age population is shrinking, which means there will be fewer workers available to drive economic growth. This change could lead to higher wages and inflation.
  2. As global trade patterns shift, countries with younger, growing populations, like India and Africa, are expected to gain a larger share of global trade. This could change the trading landscape significantly.
  3. By 2100, Africa and South Asia could become the main centers of global trade, while Europe's influence might drop to below 20%. This shows a major shift in where economic power will lie in the future.

Has Inequality Risen?

Economic Forces • 5 implied HN points • 30 Nov 23
💼 Business Economics
  1. There is a debate on whether income inequality has significantly increased since the 1960s.
  2. Different studies suggest varying levels of income inequality growth, leading to uncertainty in the conclusions.
  3. The way income shares are calculated can greatly impact the perceived trends in inequality over time.

Trial By Battle

Economic Forces • 4 implied HN points • 07 Mar 24
🔬 Science Economics
  1. In 11th and 12th century England, property disputes were settled through trial by battle, where champions fought for the parties. The process was a mechanism that revealed the true valuations of the property, encouraging settlements based on disclosed information.
  2. The hiring of champions in trial by battle reflected a market system where those valuing the land more were willing to pay higher prices for victory. This 'violent auction' reduced transaction costs and led to negotiations that allocated property to those who valued it most.
  3. Trial by battle, an apparently barbaric practice, can be understood through price theory to show how negotiations, based on revealed valuations during champion hiring, facilitated the resolution of property disputes. The practice was not ultimately about the battle itself, but about revealing the true worth of the property to incentivize settlements.

Should Wendy's Introduce Surge Pricing?

Economic Forces • 4 implied HN points • 29 Feb 24
💼 Business Economics
  1. Dynamic pricing and price discrimination are complex but can benefit both firms and consumers by adjusting prices based on demand and consumer willingness to pay.
  2. Price discrimination, when done thoughtfully, can lower prices for some consumers while increasing profits for firms, ultimately benefiting both parties.
  3. Despite advancements in digital tools for dynamic pricing, many companies, including Wendy's, are cautious due to the importance of maintaining customer trust and long-term relationships.

Marshall's Second Law of Demand

Economic Forces • 5 implied HN points • 09 Nov 23
💼 Business Economics
  1. Economists have many 'laws' but they aren't real laws, like Marshall's Second Law of Demand.
  2. Marshall's Second Law of Demand explains that demand elasticity changes with price and quantity consumed.
  3. Marshall's Second Law is relevant in trade theory, showing how higher productivity leads to higher markups and how competition reallocates production towards more efficient firms.

Will lab-grown beef raise the price of handbags?

Economic Forces • 4 implied HN points • 15 Feb 24
💼 Business Economics
  1. Lab-grown beef becoming a closer substitute for conventional beef can impact the supply of hides available for leather, affecting industries like luxury fashion.
  2. The theory of joint production explains the interconnectedness of markets where goods share production inputs, highlighting how changes in demand for one output can affect others.
  3. Understanding joint production in economics goes beyond standard supply and demand models, revealing complex relationships and teaching humility about the real-world supply chains.

Klarna delights in AI cutting 40% of its marketing spend

Fund Marketer • 3 implied HN points • 05 Jun 24
💼 Business Economics
  1. Klarna has cut its marketing spending significantly, with AI helping reduce costs by about 37%. This shows how technology can make businesses more efficient.
  2. The company's focus has shifted to creating high-quality, personalized content instead of relying on a lot of medium-quality output. They believe fewer workers can achieve more with the right tools.
  3. Despite cost cuts, companies like Klarna still rely on paid media for reaching their audiences. Traditional media channels are struggling to keep up with changing consumer habits.

Your Central Bank is Insolvent. Now What?

Economic Forces • 5 implied HN points • 02 Nov 23
💰 Finance Economics
  1. Banks need to have enough reserves to meet withdrawal requests from customers.
  2. If a bank is insolvent, it means it has more liabilities than assets.
  3. Central banks can face insolvency issues due to interest rates and government bonds, leading to potential economic consequences.

What is a Bias?

Optimally Irrational • 6 implied HN points • 13 Jul 23
🔬 Science Economics
  1. The definition of bias relies on the notion of error and comparison to a correct standard.
  2. Rational decisions align with personal plans and goals, not just maximizing satisfaction.
  3. Biases may not always be errors but could be optimal solutions under specific constraints.

Clients want to see you go back to your office

Fund Marketer • 3 implied HN points • 22 May 24
💼 Business Economics
  1. Clients prefer meeting face-to-face rather than just digital communication. They find personal connections make a big difference in their experience.
  2. There is a growing concern about the quality of online content due to AI. People are worried that much of what they see is just generic and not engaging.
  3. In the world of crypto investments, people care more about seeing prices go up than deep storytelling. Investors are often just looking for quick gains.

What's the Price Elasticity of Demand for Intelligence?

How the Hell • 3 HN points • 18 May 24
🕹 Technology Economics
  1. The price of cognitive work, measured in 'cycogs,' varies widely and changes how much people might buy depending on cost. As the price goes down, more people are likely to use this intelligence.
  2. At different price points, people's spending on cognitive work can increase significantly. For example, if cycogs cost $1, people might buy a lot more because it allows for more access to services and creative projects.
  3. As technology improves and costs drop, traditional jobs in knowledge work might decline because many will prefer custom, AI-generated solutions for their needs.

Markets Are Knowledge Ecosystems

Knowledge Problem • 1 HN point • 25 May 23
💰 Finance Economics
  1. Markets function as knowledge ecosystems where prices communicate dispersed knowledge.
  2. Economists differentiate between knowledge and information, highlighting the importance of tacit knowledge in decision-making.
  3. The knowledge problem in markets is more of a cognitive challenge than a computational one, impacting the effectiveness of AI in replicating human decision-making.

We all deserve to be rich

Klement on Investing • 1 implied HN point • 21 Feb 25
💰 Finance Economics
  1. Rich people often believe they deserve their wealth and should pay less taxes, while poor people think wealthy individuals should pay more. This shows a big difference in attitudes based on personal wealth.
  2. When people become wealthy through effort, they feel they earned it and support lower taxes. Surprisingly, even those who get rich by luck, like winning a lottery, also argue for lower taxes on their wealth.
  3. After people become wealthy, they often stop considering ideas about sharing wealth or paying higher taxes. They tend to seek out information that supports their own views, ignoring arguments for helping those less fortunate.

Russian Banking's Birth by Mutiny

Vivid Leaves • 5 implied HN points • 26 Jul 23
💼 Business Economics
  1. The collapse of the Soviet banking system birthed the modern Russian banking system through a series of rebellions and creation of new banks.
  2. The Soviet economy transitioned from a market vacuum to a market economy due to cooperative entities and the birth of private commercial banks.
  3. Formation of the Central Bank of Russia and rapid bank privatization led to a banking system with significant infrastructure challenges and financial instability.

The Economics of NOPE

Some Unpleasant Arithmetic • 6 implied HN points • 03 Mar 23
📖 Philosophy Economics
  1. The movie NOPE explores the idea that certain things should not be produced or sold, highlighting themes of commerce and spectacle.
  2. Repugnance in markets can lead to government intervention when outcomes are not socially optimal, with examples like banning organ sales or slavery.
  3. The debate on moral limits of markets involves normative (what should be) vs positive (what is) economics, with economists often lacking background in non-math disciplines.

Why is Gold Such a Reliable Measure of Value?

Economic Forces • 3 implied HN points • 22 Feb 24
💰 Finance Economics
  1. Gold has historically maintained its value, with an ounce consistently able to buy a good suit, showcasing its reliability as a measure of value.
  2. On the gold standard, dollar value was linked to a set amount of gold, ensuring a stable price for gold over time.
  3. Fluctuations in the supply and demand of gold do not impact the long-term value of gold as a reliable measure of value.

#14 The Cost of Being the Default

Atomic Learnings • 6 implied HN points • 20 Feb 23
💼 Business Economics
  1. Google pays billions to stay as the default search engine on various platforms.
  2. Google pays Apple, Samsung, and Mozilla to be their default search provider.
  3. Having a 93% market share is not just about being the best, but also about being the default.

Supply and demand can explain anything. That's not great.

Economic Forces • 4 implied HN points • 14 Sep 23
💰 Finance Economics
  1. Using supply and demand to explain observations can be overly flexible and lead to pure sophistry in economics.
  2. Models based on implicit agreements, folk theorems, and coordination failures can be unfalsifiable and offer no predictive power.
  3. When evaluating economic theories, it's important to consider if they can provide meaningful predictions and not just overlapping explanations.

Are Markups Really SO Bad?

Economic Forces • 4 implied HN points • 31 Aug 23
💼 Business Economics
  1. Market power can be better measured by markups than concentration.
  2. Rising markups can indicate both beneficial improvements and potential inefficiencies.
  3. Markups alone do not determine efficiency or welfare without considering underlying causes.

Crime and Punishment

Economic Forces • 4 implied HN points • 24 Aug 23
🚌 Education Economics
  1. Economic tools can be applied to both market and non-market activities to analyze decision-making involving costs and benefits.
  2. Designing the optimal punishment for crimes involves balancing the deterrence benefit with the enforcement costs.
  3. Consideration of incentives for law enforcement and decision-makers is crucial in designing effective systems to prevent over-enforcement and extortion.

Best of Economic Forces: 2023 Edition

Economic Forces • 3 implied HN points • 28 Dec 23
💼 Business Economics
  1. The top Economic Forces newsletters of the year focused on explaining price theory.
  2. Brian's most popular posts in 2023 were about famous economists like Thomas Sowell and Alchian.
  3. Josh's popular posts highlighted how basic economics can help us understand inflation and externalities.