In the mid-to-late 20th century, economists predicted that nascent economic theories would mean the death of major recessions and depressions. Governments could preemptively adjust their fiscal and monetary policy to soften or largely prevent the effects of the business cycle, which before was so capricious and severe. This prediction has proven false. Decade after decade, […]
“Gentlemen prefer bonds.” Andrew Mellon There are several types of investments that people can make today in including stocks, bonds, mutual funds, ETFs, and more. Today, we’re going to focus on bonds, which are one of the most commonly held investments in the world. A bond is basically a “glorified loan” in which a company […]
The economy is far too vast and complex to fully understand, and thus economists have made models to simplify the many moving components: one of the most important is the circular flow model. The Model The circular flow model is most simply a way to show the flow of resources and money. It is composed […]
A vast majority of government intervention in the economy is intended to benefit consumers and workers. However, many businesses see government intervention as an obstacle or even as an enemy to growth. Regardless of this opinion, there are government policies which when enacted actually create a better economic environment for business. This lesson will cover […]
As much as investing is crucial to our economy, so are the rules which regulate it. History shows that when regulation was misguided or lacking, massive financial and economic crises have happened. The most notable of these crises are the Great Depression and Great Recession. Regulation ultimately prevents misconduct which promotes the excessive risk of […]
With the 2020 election fast approaching and with global warming entering center stage, carbon taxes have been in the news. A carbon tax is, as the name implies, a tax that businesses must pay when they produce carbon emissions with the goal of solving the climate crisis. While Democrats and Republicans debate the proposal, the […]
Almost every politician in America will agree on one thing: public investment in infrastructure is unacceptably low. President Trump has pushed infrastructure week, and most democratic presidential nominees have announced sweeping plans to invest in infrastructure. But in reality, even with these new plans, America’s infrastructure is far behind — foolishly behind — its rising […]
You gotta spend money to make money. Or rather, it takes money to make money. This is true because when capital is invested, it generates interest proportional to the investment. Therefore, the larger the investment, the larger the return. This is great if you have tons of money because it means you can make tons […]
Recessions are inevitable; like the old saying, what goes up must come down. At the time of the writing of this article, the economy has gone ten years without a serious crash. In the next recession, as in all others, many will lose their jobs and financial security. Many will see their savings wiped away […]