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Khan Academy Macroeconomics

GDP - measuring national income
Circular flow of income and expenditure. Gross domestic product.

Inflation - measuring the cost of living
Inflation and deflation. CPI-U. Real and nominal return. Phillips Curve.

Aggregate demand and aggregate supply
Aggregate demand and aggregate supply. Keynesian thinking. Demand-pull and cost-push inflation. Fiscal and monetary policy.

The monetary system
Fractional reserve banking and the money supply.

Income and expenditure - Keynesian cross and IS-LM model
Consumption function. Marginal propensity to consume and multiplier. Keynesian Cross and IS-LM model.

Foreign exchange and trade
Balance of payments. Current account. Capital account. Currency reserves and speculative attacks.

GDP - measuring national income

Introduction to economics
This very short tutorial gives us the big picture of what economics is all about and, in particular, compares macroeconomics (where you are now) to microeconomics.

GDP and the circular flow of income and expenditures
Economics can some times get confusing because one person's expenditure is another person's income which can then be used for expenditure and on and on and on. Seems very circular. It is. This tutorial helps us grapple with this and introduces us to the primary tool economists use to measure a nations productivity/income/expenditure--GDP (gross domestic product).

Components of GDP
You already understand the circular nature of the economy and how GDP is defined from the last tutorial. Now let's think about how economists define the composition of GDP. In particular, we'll focus on consumption (C), investment (I), government spending (G) and net exports.

Real and nominal GDP
The value of a currency is constantly changing (usually going down in terms of what you can buy). Given this, how can we compare GDP measured in dollars in one year to another year? This tutorial answers that question by introducing you to real GDP and GDP deflators.

Inflation - measuring the cost of living

Measuring cost of living -- inflation and the consumer price index
We might generally sense that our cost of living is going up (inflation), but how can we measure it? This tutorial shows how it is done in the United States with the consumer price index (CPI).

Real and nominal return
We think we're getting a certain return on our investments, but can we put it in terms of real purchasing power since the value of money is constantly changing? The answer is yes and this tutorial shows you how.

Deflation
Prices don't always go up. Sometimes they go down (we call this deflation). This tutorial explains how this happens.

Inflationary and deflationary scenarios
This tutorial walks through various scenarios of moderate and extreme price changes. Very good way to understand how activity in the economy may impact price (and vice versa).

The Phillips Curve - Inflation and unemployment
Economists have notices a correlation between unemployment and correlation (you may wan to guess what type of correlation). On some level, this tutorial is common sense, but it will give you fancy labels for this relation so that you can sound fancy at fancy parties.

Aggregate demand and aggregate supply

Aggregate demand and aggregate supply
This tutorial looks at supply and demand in aggregate-from the perspective of the entire economy (not just the market for one good or service). Instead of thinking of quantity of one good, we think of total output (GDP). Very useful model for thinking through macroeconomic events.

Historical circumstances explained by AD/AS
In the last tutorial, we claimed that the aggregate demand and aggregate supply model (AD-AS) would be useful for analyzing macroeconomic events. Well, in this tutorial, we'll do exactly that.

The business cycle
Economies never have a long steady march upwards. They constantly oscillate between growth and recession. This tutorial gives a little intuition for why that is.

Monetary and fiscal policy
Governments (and pseudo government entities like central banks) have two tools at their disposal to try to impact the business cycle --monetary and fiscal policy. This will help you understand what they are.

Keynesian thinking
Whether you love him or hate him (or just consider him a friend that you respect but disagree with every-now-and-then), Keynes has helped define how many modern governments think about their economies. This tutorial explains how his thinking was a fundamental departure from classical economics.

The monetary system

Fractional reserve banking
Most modern economies use a counter-intuitive model of banking called "fractional reserve banking." It is counter-intuitive (and some people would say wrong) because it allows banks to lend out money that it tells depositors is available at any time and essentially involves private banks in money creation. It also creates the possibility of mass instability through bank runs that tend to be mitigated through government regulation and insurance (some would say government subsidy of banks). This tutorial explains how fractional reserve lending works and outlines the good and bad. It also talks about the alternative of full reserve banking.

Money supply
This short tutorial explains how we measure how much "money" there is out there. As we'll see, this isn't as straightforward as counting dollars in people's pockets, especially because there are multiple type of money.

Fractional reserve accounting
If you already know a bit of what fractional reserve banking involves, this tutorial will take you deeper by looking at the actual accounting of central banks and banks.

Interest as the price of money
Summary

Income and expenditure - Keynesian cross and IS-LM model

Marginal propensity to consume (MPC)
If you earn a $1, you might spend some fraction of it. This can then be income for someone else. This can keep going. In this tutorial, we'll explore how the incremental spend per incremental earnings (marginal propensity to consume) and the multiplier effect based on it can drive economic activity.

Consumption function
We are steadily building up the tools to understand the Keynesian Cross and the IS-LM model. In this tutorial, we begin to model consumption as a linear function of disposable income. Seems reasonable to me.

Keynesian Cross
We now build on our consumption function models and start to explore ideas of planned expenditures as a function of output. When plotted with the actual output line, we get our Keynesian Cross which helps us think about whether the economy is operating at its potential.

IS-LM Model
In this tutorial, we begin thinking about the impact of real interest rates on planned investment and output. We then use this to help us plot the IS curve. We then think about how, assuming a fixed money supply, as there is more economic activity, people are willing to pay more for money (helps us plot the LM curve). Finally, we use the IS-LM model to think about how fiscal policy can impact both GDP and real interest rates. You should watch the Keynesian Cross tutorial before this one.

Foreign exchange and trade

Balance of payments- current account and capital account
In this tutorial we will see how trade and assets (including money) changing hands are fundamentally intertwined. Not only that, but we will see how this can be accounted for through the capital account (assets changing hands) and current account (trade).

Currency reserves
This tutorial delves into how and why countries (usually their central banks) would want to keep other countries' currency in reserve. It then goes into why this sometime leaves the reserve-holding country open to a speculative attack (this is seriously high drama).

Introduction to economics

GDP and the circular flow of income and expenditures

Circular Flow of Income and Expenditures
Understanding the flow of resources in the simplest possible economy

Parsing Gross Domestic Product
Understanding what GDP does and doesn't measure.

More on Final and Intermediate GDP Contributions
What happens when a good is not finished in a period

Components of GDP

Investment and Consumption
Difference between every day and economic notions of investment and consumption

Income and Expenditure Views of GDP
Looking at a simple model of an economy

Components of GDP
Understanding the components of the expenditure view of GDP. Consumption, investment, government spending and net exports

Examples of Accounting for GDP
Thinking about how different types of expenditures would be accounted for in GDP

Real and nominal GDP

Real GDP and Nominal GDP
Using real GDP as a measure of actual productivity growth

GDP Deflator
Relationship between the GDP deflator, nominal GDP and real GDP

Example Calculating Real GDP with a Deflator
Example Calculating Real GDP with a Deflator

Circular Flow of Income and Expenditures

Parsing Gross Domestic Product

More on Final and Intermediate GDP Contributions

Investment and Consumption

Income and Expenditure Views of GDP

Components of GDP

Examples of Accounting for GDP

Real GDP and Nominal GDP

GDP Deflator

Example Calculating Real GDP with a Deflator

Measuring cost of living -- inflation and the consumer price index

Introduction to Inflation
Basics of price inflation and the CPI (consumer price index)

Actual CPI-U Basket of Goods
Exploring the actual weightings for the CPI-U basket of goods

Inflation Data
Looking at actual sequential and year-over-year inflation data

Real and nominal return

Real and Nominal Return
Inflation and real and nominal return

Calculating Real Return in Last Year Dollars
Calculating real return in last year dollars

Relation Between Nominal and Real Returns and Inflation
Relation between nominal and real returns and inflation

Deflation

Deflation
Basics of deflation

Velocity of Money Rather than Quantity Driving Prices
How velocity of money can drive price increases

Deflation Despite Increases in Money Supply
How you can have deflation even if the money supply increases

Inflationary and deflationary scenarios

Moderate Inflation in a Good Economy
Why there tends to be moderate inflation during good economies

Stagflation
How a supply shock can cause prices to rise and the economy to stagnate

Deflationary Spiral
Basics of a deflationary spiral

Hyperinflation
Basic of hyperinflation. Weimar Germany, Hungarian Pengo and Zibabwean Dollar

The Phillips Curve - Inflation and unemployment

Unemployment Rate Primer
Understanding how the headline unemployment rate (U-3) is calculated

Phillips Curve
The observation that inflation and unemployment tend to be inversely correlated

Introduction to Inflation

Actual CPI-U Basket of Goods

Inflation Data

Real and Nominal Return

Calculating Real Return in Last Year Dollars

Relation Between Nominal and Real Returns and Inflation

Deflation

Velocity of Money Rather than Quantity Driving Prices

Deflation Despite Increases in Money Supply

Moderate Inflation in a Good Economy

Stagflation

Deflationary Spiral

Hyperinflation

Unemployment Rate Primer

Phillips Curve

Aggregate demand and aggregate supply

Aggregate Demand
Understanding how aggregate demand is different from demand for a specific good or service. Justifications for the aggregate demand curve being downward sloping

Shifts in Aggregate Demand
Factors that might shift aggregate demand

Long-Run Aggregate Supply
Thinking about why aggregate supply may not be influenced by prices in the long-run

Short Run Aggregate Supply
Justifications for the aggregate supply curve to be upward sloping in the short-run

Historical circumstances explained by AD/AS

Demand-Pull Inflation under Johnson
Thinking about whether inflation in the late 1960s is consistent with the AD-AS model

Real GDP driving Price
Thinking about how high utilization could drive price as another justification for an upward sloping short-run aggregate supply curve

Cost Push Inflation
How an oil shock can slow the economy while causing inflation

The business cycle

Monetary and fiscal policy

Monetary and Fiscal Policy
Basic mechanics of monetary and fiscal policy

Tax Lever of Fiscal Policy
How government can affect aggregate demand through tax policy

Keynesian thinking

Content

Title
Summary

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Summary

Aggregate Demand

Shifts in Aggregate Demand

Long-Run Aggregate Supply

Short Run Aggregate Supply

Demand-Pull Inflation under Johnson

Real GDP driving Price

Cost Push Inflation

Monetary and Fiscal Policy

Tax Lever of Fiscal Policy

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Content

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Fractional reserve banking

Overview of Fractional Reserve Banking
Big picture of how money enters circulation and how lending can increase the money supply

Weaknesses of Fractional Reserve Lending
Weaknesses of Fractional Reserve Lending

Full Reserve Banking
Overview of full reserve banking in comparison to fractional reserve banking

Money supply

Fractional reserve accounting

Simple Fractional Reserve Accounting (part 1)
Summary

Simple Fractional Reserve Accounting (part 2)
How banks can actually create checking accounts under a fractional reserve system

Interest as the price of money

Interest as Rent for Money
Thinking about interest as the price of money. Looking at money from a supply and demand perspective

Money Supply and Demand Impacting Interest Rates
Examples showing how various factors can affect interest rates

Interest as Rent for Money

Money Supply and Demand Impacting Interest Rates

Simple Fractional Reserve Accounting (part 1)

Simple Fractional Reserve Accounting (part 2)

Overview of Fractional Reserve Banking

Weaknesses of Fractional Reserve Lending

Full Reserve Banking

Marginal propensity to consume (MPC)

MPC and Multiplier
Introduction to the marginal propensity to consume and the multiplier

Mathy Version of MPC and Multiplier (optional)
Generalizing what we did in the last video with more math

Consumption function

Consumption Function Basics
The basic idea of a consumption function

Generalized Linear Consumption Function
Generalizing a linear consumption function as a function of aggregate income

Consumption Function with Income Dependent Taxes
Thinking about a consumption function where taxes are also a function of income (which is more realistic than constant taxes)

Keynesian Cross

Keynesian Cross
Analyzing planned expenditures versus actual output using the Keynesian Cross

Details on Shifting Aggregate Planned Expenditures
Showing how a change in government spending can lead to a new equilibrium

Keynesian Cross and the Multiplier
More on shifting aggregate planned expenditures. Connecting to the multiplier

IS-LM Model

Investment and Real Interest Rates
Intuition as to why high real interest rates lead to low investment and why low rates lead to high investment

Connecting the Keynesian Cross to the IS-Curve
Introduction to the Investment/Savings curve

Loanable Funds Interpretation of IS Curve
Thinking about how real GDP can drive real interest rates

LM part of the IS-LM model
How the theory of liquidity preference drives demand for money and the LM (liquidity preference-money supply) curve

Government Spending and the IS-LM model
How a change in fiscal policy shifts the IS curve

MPC and Multiplier

Mathy Version of MPC and Multiplier (optional)

Consumption Function Basics

Generalized Linear Consumption Function

Consumption Function with Income Dependent Taxes

Keynesian Cross

Details on Shifting Aggregate Planned Expenditures

Keynesian Cross and the Multiplier

Investment and Real Interest Rates

Connecting the Keynesian Cross to the IS-Curve

Loanable Funds Interpretation of IS Curve

LM part of the IS-LM model

Government Spending and the IS-LM model

Balance of payments- current account and capital account

Balance of Payments- Current Account
Understanding the United States Current Account in 2011

Balance of Payments- Capital Account
Understanding how changes in foreign ownership of assets effects balance of payments

Why Current and Capital Accounts Net Out
Intuition behind why the current account and capital account should balance

Currency reserves

Accumulating Foreign Currency Reserves
How and why a central bank would build foreign currency reserves

Using Reserves to Stabilize Currency
How a central bank could use foreign currency reserves to keep its own currency from devaluing

Speculative Attack on a Currency
Summary

Financial Crisis in Thailand Caused by Speculative Attack
How a currency crisis in Thailand led to a banking crisis in the 1990s

Math Mechanics of Thai Banking Crisis
Going through the mechanics of how a Thai financial institution can lose their shirt when their currency devalues.

Balance of Payments- Current Account

Balance of Payments- Capital Account

Why Current and Capital Accounts Net Out

Accumulating Foreign Currency Reserves

Using Reserves to Stabilize Currency

Speculative Attack on a Currency

Financial Crisis in Thailand Caused by Speculative Attack

Math Mechanics of Thai Banking Crisis