To ask for an idiots guide to the economy?

[economise]

Is there an easy way to describe how the economy works? I hear inflation, GDP and how wages don't keep up so there is a real terms cut in pay, cost of living, how and why commodities go up so much in cost like petrol, food utilities.

It's hard for me to get my head around how it all connects together.

Inflation - the rate at which the cost of things is rising
GDP - growth domestic product - someone somewhere decided that this (stupid imo) way was the best way to measure how good your country is. It’s basically the output per person. The higher it is the better we are doing. But constant GDP growth is unsustainable and has knock on effects.
Fuel, commodities etc. are all considered basic necessities nowadays. But unless it’s sustainable and renewable it is therefore finite, thus when in short supply, the prices go up.

There is a ying and yang to everything, even economics. But we live in a capability society and constant GDP growth is sold to us as a good thing.

Take housing. On one hand if house prices fall, it’s headlined as terrible. However at the same time, there will be headlines saying how terrible it is that folk can’t afford a house. Well which is it then??? A house is basically a shelter of 4 walls and a roof but it has been commoditised to something beyond a home.

There’s a dummies guide to the economy and you’ll find other guides on Amazon which will have the basics.

Then I expect the economist does a basic free newsletter

it's fucked!

That you Rishi?

@SquishySquirmy

That you Rishi?

While we're at it, can anyone explain what caused the crazy inflation in the 1970s? I've seen a few posters talking about how food etc in shops having multiple price stickers as the prices just kept rising so fast. What happened?

Buy How Money Works and read it. You will learn a lot!

oil prices & wage growth i think.

Scottish notes are legal tender

The book When The Lights Went Out covers the 70s very accessibly.

@Phineyj thank you, will have a look.

@JesusInTheCabbageVan

I think basically high inflation in the 70s was a combination of central bank policy, sky high oil prices and the fact that towards the end of the 70s the unions had a near stranglehold over the economy (although I have heard economists arguing that this is overplayed).

But no doubt an economist will be along to tell me I'm full of shit soon.

But no doubt an economist will be along to tell me I'm full of shit soon.

If they do, a second economist will only be along soon to tell them they're full of shit Recent events have really opened my eyes to how much economists are up for a fight.

iea.org.uk/economics-101/

www.economist.com/economics-a-to-z

www.investopedia.com/articles/economics/11/five-economic-concepts-need-to-know.asp

I have 2 economics-based degrees.
PPE and Business economics.

It gives a keen insight into current and future issues, especially human behavior during and post covid.
Basically, all the ranting on Twitter and other social media platforms is uninformed. And the informed media are just baiting with sensationalism.

@JesusInTheCabbageVan

But no doubt an economist will be along to tell me I'm full of shit soon.

If they do, a second economist will only be along soon to tell them they're full of shit Recent events have really opened my eyes to how much economists are up for a fight.

Three people are being interviewed for a job.

The interviewer asks the first, a mathematician, what does 2 + 2 equal. The mathematician answers 4.

The interviewer asks the second, a statistician, what does 2 + 2 equal. The statistician answers 4 plus or minus a variable depending on the context.

The interviewer asks the third and final candidate, an economist, what does 2 + 2 equal. The economist looks round furtively, pulls down the blind and asks "what do you want it to answer?"

@SquishySquirmy

That you Rishi?

hahahahahaaa!

Economics: A very short introduction is a good starting point. For a bit more in depth I’d say get a macroeconomic textbook at the first year undergrad or A-level sort of level from the library and just skip over the maths bits.

In terms of classics Thomas Piketty’s Capital in the 21st Century is good but very long. The Wealth of Nations still underpins a lot of modern economic thinking, likewise could be handy to read some Keynes. Why Nations Fail is also a good read, as is anything by Ha-Joon Chang (who is a very clear writer).

Whatever you do, don’t read Intermediate Microeconomics by Varian, I’m still traumatised…

The interviewer asks the first, a mathematician, what does 2 + 2 equal. The mathematician answers 4. The mathematician says “it depends. If you are using modulo 3 arithmetic, it equals 1”

@AnotherNC22 can imagine a politician giving an identical answer to the economist, in that scenario. There's a lesson in there, somewhere...

@MereDintofPandiculation

The interviewer asks the first, a mathematician, what does 2 + 2 equal. The mathematician answers 4. The mathematician says “it depends. If you are using modulo 3 arithmetic, it equals 1”