The hottest Macroeconomics Substack posts right now

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The Pettis Paradigm and the Second China Shock

Noahpinion • 16059 implied HN points • 16 Jan 25
💰 Finance International Trade Macroeconomics Economic Policy
  1. China has a large trade surplus, which is complex and not solely based on traditional economic theories. Many think its economy is getting help through government loans and subsidies.
  2. There are many opinions on how to deal with China's trade practices, especially the idea of using tariffs. Some believe that tariffs can help change China's focus from exporting to better domestic consumption.
  3. Economics is complicated, and experts often disagree on how to fix trade issues. Current solutions might not work as intended, and some past policies have not improved the situation as hoped.

How Paul Krugman changed the public face of economics

Noahpinion • 25647 implied HN points • 11 Dec 24
💼 Business Economics Macroeconomics Public Engagement
  1. Paul Krugman changed economics by making it more accessible and engaging. He believed that good ideas come from everyone, not just top experts.
  2. He played a key role in popularizing Keynesian economics, especially during the Great Recession. His work helped explain the importance of government spending to boost the economy.
  3. Krugman critiqued the academic hierarchy and encouraged open discussions. He showed that even big names in economics could be questioned, which opened the door for new ideas.

Macroeconomics: The predator of foolish regimes

Noahpinion • 19353 implied HN points • 19 Dec 24
💰 Finance Macroeconomics Debt Management Economic Policy Socialism
  1. Bad economic decisions, like keeping currency overvalued or borrowing too much in foreign currency, can lead to big problems for any government. This can happen regardless of whether a country is socialist or capitalist.
  2. Countries often face different types of economic crises. For example, some might deal with inflation while others face deflation, and they need to respond differently to fix these situations.
  3. Leaders who think they can control the economy through micromanaging are usually getting it wrong. Big economic problems need big-picture solutions.

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.

Time to Revisit: How Does This Assessment Look Fourteen Months Later?

Brad DeLong's Grasping Reality • 192 implied HN points • 10 Feb 25
💰 Finance Macroeconomics Inflation Federal Reserve Economic Policy Market Analysis
  1. There are two main views on inflation: 'Team Transitory' believes inflation will go away, while 'Team Persistent' thinks it will stick around. The debate is important to understand how to deal with the economy's ups and downs.
  2. The Federal Reserve's actions, like raising interest rates quickly, play a big role in managing inflation. If the Fed hadn't acted as strongly, inflation expectations could have gone out of control.
  3. Past economic cycles were shaped by different factors, like wars and technological changes. Understanding these historical trends can help us navigate today's economy better.
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Economics Links, 6/2/2025

In My Tribe • 212 implied HN points • 02 Jun 25
💰 Finance Macroeconomics Regulation Cryptocurrency Banking Policy
  1. Closing the FCC could be beneficial, as it often invents new reasons to exist. Some of its functions could be better managed by other government departments.
  2. Trump's idea to make Freddie Mac and Fannie Mae public while keeping government guarantees could lead to problems. This could mean private companies profit while taxpayers take on the risks.
  3. There's some hope in the economy as service costs are stabilizing, suggesting capitalism might be doing better than thought. This could mean a brighter future for the middle class.

Not Much has Changed

The Transcript • 179 implied HN points • 15 Oct 24
💰 Finance Macroeconomics Interest Rates Consumer behavior Investment Strategies Labor Market
  1. The economy is doing okay overall, even though growth has slowed down a bit since the Fed lowered interest rates. It seems like things are more stable than expected.
  2. Consumers are still spending, and there’s no big drop in retail shopping, which is a good sign for the economy. Most people are managing to keep up with their finances.
  3. Investors are holding onto a lot of cash right now and might be waiting for better opportunities to invest. Many think current asset prices are too high.

The Unmaking of a Modern Economy: Brexit, Austerity, and Britain's Great Retraction

Brad DeLong's Grasping Reality • 376 implied HN points • 23 Nov 24
💰 Finance Economic Policy Macroeconomics Global Economy Financial Crisis Growth Strategies
  1. Britain's economy has struggled since 2008, missing out on a lot of potential growth. If things had gone differently, people would be much better off today.
  2. Policies like austerity and Brexit have hurt the economy, but they are not the only reasons for the decline. There have been many mistakes made over the years.
  3. The long-term effects of economic shocks, like the Great Recession, can have lasting impacts on growth. This shows how important it is to be careful with economic policies.

Slick Landing

Doomberg • 8377 implied HN points • 06 Jan 24
💰 Finance Economy Interest Rates GDP Market Analysis Macroeconomics
  1. In 2022, the US economy was expected to fall into a deep recession, but it didn't.
  2. Despite doubts, the Federal Reserve's aggressive interest rate hikes had a positive impact on the economy.
  3. Forecasts for the US economy are challenging, and unexpected outcomes provide unique learning opportunities.

Do Tariffs Reduce Trade Deficits?

In My Tribe • 288 implied HN points • 22 Jan 25
💰 Finance International Trade Macroeconomics Tariffs Economic Policy
  1. Understanding international economics is complicated and involves many factors. It's not just simple numbers, but a mix of many different elements.
  2. A country's trade surplus is linked to its ability to save more than it invests. Countries that save well will usually end up holding other countries' debt like U.S. Treasury bills.
  3. Imposing tariffs might not significantly reduce trade deficits. Instead, currency appreciation can offset any potential benefits from tariffs, so real change depends more on national savings rates.

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.

BEWARE of Occam's Razor

Insight Axis • 731 implied HN points • 08 Oct 23
📖 Philosophy Macroeconomics Theory Objects
  1. Occam's razor is a tool for finding the best explanations, not a one-size-fits-all solution. It should only be used in specific situations where competing explanations are equally valid.
  2. Good explanations are deep, broad, and hard to vary - not necessarily simple. Choosing simplicity over accuracy can lead to wrong conclusions, like favoring Newton's theory over Einstein's theory of relativity.
  3. Occam's razor can transfer complexity from explanations to objects, but doesn't always eliminate complexity. It's important to apply it correctly by selecting the explanation that avoids unnecessary complexity.

Inflation is Bad, Actually

Economic Forces • 7 implied HN points • 30 Jan 25
💰 Finance Inflation Macroeconomics Price theory Taxation Economic Policy
  1. Some people think inflation is good because it helps prevent deflation, but this argument is weak. Deflation can be harmful mainly when caused by poor policies, not just by falling prices.
  2. Inflation is often compared to a hidden tax because it decreases the value of money. Unlike regular taxes, people might not realize their purchasing power is being reduced until they feel the effects.
  3. Overall, inflation can create confusion and make economic decisions harder. It undermines the value of money as a reference point, leading to more mistakes and inefficiencies in both personal and business finances.

What If We Run Inflation Hot: Harris Kupperman

QTR’s Fringe Finance • 20 implied HN points • 02 Jan 25
💰 Finance Investing Economics Inflation Macroeconomics Market Trends
  1. Inflation may rise faster than expected, which could surprise many investors. People are not prepared for high growth in the economy right now.
  2. The recent economic changes have benefited many workers and industries that were struggling for a long time. This includes wage increases in sectors that needed them.
  3. Questions are being raised about whether efforts to control inflation are really aimed at the overall economy or at a specific group of people in the rural areas.

Bitcoin ETFs: winners and losers

Ecoinometrics • 255 implied HN points • 09 Feb 24
💰 Finance Bitcoin ETFs Cryptocurrencies Economy Investing Macroeconomics
  1. Bitcoin ETFs have winners like BlackRock and Fidelity, along with losers like Grayscale, showing the importance of scale in this market.
  2. Bitcoin and Ethereum are showing decreasing correlation, hinting at potential opportunities for more diverse trading options in the crypto market.
  3. Historically, US presidential election years do not necessarily prevent economic downturns, revealing the limitations politicians have in propping up the economy.

A política monetária nos EUA se encontra em território restritivo?

O Observador de Corcyra • 412 implied HN points • 26 Feb 23
💰 Finance Monetary Policy Inflation Interest Rates Economic Analysis Macroeconomics
  1. The US monetary policy has been restrictive with significant impact on the economy and financial conditions.
  2. There are debates on whether the current monetary policy pace is appropriate or if adjustments should be made.
  3. Models and projections show the complexity of predicting inflation and the impact on future monetary policy decisions.

Bitcoin Solves Triffin's Dilemma

The Dollar Endgame • 259 implied HN points • 12 Nov 23
💰 Finance Bitcoin Cryptocurrency Macroeconomics
  1. The Bretton Woods system established the U.S. dollar as the global reserve currency in 1944, benefiting the U.S. significantly.
  2. Triffin's dilemma addressed the fatal flaw in the Bretton Woods system, highlighting the challenges of a central issuer currency in a global monetary system.
  3. Bitcoin offers a solution to Triffin's dilemma by being a neutral reserve currency, avoiding the issues associated with central issuer currencies and promoting balance in the global economy.

Macroeconomics with Price Theoretic Foundations

Economic Forces • 5 implied HN points • 16 Jan 25
💰 Finance Macroeconomics Price theory Financial Markets Asset Pricing Monetary Policy
  1. Understanding finance is really important for macroeconomics. It helps us figure out how markets work and how different factors impact the economy.
  2. The no-arbitrage principle in finance shows that prices should adjust quickly to eliminate profit opportunities. This means that if something is cheaper in one place, it won't stay that way for long.
  3. We can analyze macroeconomic theories using tools from price theory. This allows us to test predictions and better understand how things like interest rates and asset prices relate to the economy.

A watershed moment for bond yields

Klement on Investing • 3 implied HN points • 15 Jan 25
💰 Finance Investing Bond Market Economic Trends Government Policy Macroeconomics
  1. Long-term bond yields are rising again after decades of decline. This shift suggests that investors are now expecting a risk premium for holding government bonds.
  2. Several factors influence bond yields, including government deficits, demographic changes, and the balance of supply and demand for safe investments. These can push yields higher or lower.
  3. The trends observed in bond markets could change how governments finance their debts in the future. It's a developing situation that could impact financial markets.

Interview: QTR's Take On The Election Results, Macroeconomics & More

QTR’s Fringe Finance • 19 implied HN points • 10 Nov 24
💰 Finance Investing Macroeconomics Media Critique Politics Financial Education
  1. Mainstream media and universities often promote ideas that don't reflect real-world logic. It's important to think critically about what we're being told.
  2. Identity politics can distract from true merit and qualifications in leadership. Focusing on skills and experience is more beneficial for progress.
  3. I prefer to get news from independent sources. This helps me find a wider range of viewpoints and avoid echo chambers.

Former econ official says "trillions" to come, but be patient

Pekingnology • 56 implied HN points • 10 Oct 24
💰 Finance Economic Policy Market Analysis Government Regulation Investment strategy Macroeconomics
  1. A big economic plan is coming from China, but people need to be patient and not expect immediate results. Changes will happen over time.
  2. The government's strategy involves much more than just money; it includes a variety of policies to support different areas of the economy. This means they are looking at the bigger picture.
  3. Not every policy will show clear numbers right away. Some are about creating a better business environment and building for the future, which might take longer to see the effects.

6. Dancing between the physical and digital; big tech and macroeconomics

Insight Axis • 19 implied HN points • 03 Nov 22
🕹 Technology Digital Macroeconomics Tech Companies Information processing Big Tech
  1. Digital innovation is faster and more flexible than physical innovation, making digital iteration more efficient.
  2. Translating between the physical and digital worlds is essential, requiring 'on-ramps' for data input and 'off-ramps' for implementation.
  3. Information processing is crucial, with 'ramps' serving as gatekeepers between physical and digital realms in big tech and macroeconomics.

Why Armen Alchian is the GOAT 🐐

Economic Forces • 6 implied HN points • 26 Oct 23
💼 Business Economics Education Macroeconomics
  1. Armen Alchian brought original and important ideas in economics like focusing on property rights, incentives, and information.
  2. Alchian excelled at both economic theory and empirical work, showing expertise in using data and bridging theory with measurement.
  3. Despite being known for microeconomics, Alchian made significant contributions to macroeconomics, especially in areas like transaction costs and macro unemployment.

Decoding Expectations

inexactscience • 0 implied HN points • 20 Mar 23
💰 Finance Macroeconomics Behavioral Finance Expectations Economic Models Forecasting
  1. Expectations are key to economic models because they shape how people behave and react to changes in the economy. For example, if people expect prices to rise, they may ask for higher wages.
  2. There is confusion about whether expectations tend to overreact or underreact to information. Evidence shows that expectations can do both—people might overreact to recent events but underreact to larger economic trends.
  3. Bias in expectations is often studied, but noise—random fluctuations and errors—is just as important and can affect forecasts significantly. Understanding both can help improve how we predict economic outcomes.

Default and Bankruptcy: Black, white and shades of grey

Musings on Markets • 0 implied HN points • 14 Jul 11
💰 Finance Debt Management Economic Policy Credit Risk Debt Management Financial risk Macroeconomics
  1. Default is not just about missing a payment; it can also involve lenders accepting losses to help borrowers avoid a formal default. This can include restructuring loans or adjusting payment terms.
  2. Lenders may prefer implicit default over explicit default because it allows them to avoid recognizing their mistakes in assessing credit risk. It makes the situation less transparent and allows them to delay acknowledging losses.
  3. For borrowers, sometimes it might be better to face explicit default and make necessary changes rather than stay in a cycle of implicit default, which can lead to worse problems down the line.

January 2016 Data Update 2: Interest Rates, Exchange Rates and Currencies

Musings on Markets • 0 implied HN points • 08 Jan 16
💰 Finance Interest Rates Corporate Finance Investment decisions Macroeconomics
  1. Interest rates and exchange rates are key players in finance because they affect investment returns and company earnings. Trying to predict changes in these rates can lead to mistakes.
  2. There is no one-size-fits-all risk-free rate; it varies by currency and country. To find a risk-free rate, you need to account for local factors like government bond rates and default risks.
  3. When dealing with different currencies, it's important to stay consistent in your valuations. This helps make sure that changes in inflation and risk are accounted for fairly across different currencies.