It’s now been 16 weeks of posting every Friday, and I’ve reached the end of a series of posts setting out some fundamental concepts. I…
Category: Models
This is an extra blog post – it doesn’t fit into the regular flow of 500-word Friday blog posts explaining how the economy works and…
Over the last 2 weeks I have given a brief overview of financial assets and their vital role as the main form of saving in…
Last week I introduced financial assets, and pointed out that purchasing these assets is in fact a way to save. Most assets actually represent a…
This is going to be my final model (woop woop). I’m calling it Intermediateland, because in Intermediateland they’ve invented financial assets, and financial assets do…
We’ve spent two weeks looking at fractional reserve banking, and I pointed out that although this is the model presented by textbooks, it bears very…
Last week we added Fractional Reserve Banking to our “engine”, where the bank acts as an intermediary between savers and borrowers, keeping a fraction of…
Dynamicland has a neighbour, Multiplyland – and they’ve invented banks. It’s such a great innovation that Bob moved to Multiplyland, so he can put his…
Decisions about who to allocate credit to, and how much credit to allocate, are absolutely fundamental to the path the economy takes in the future.…
Remember Bob, the saver in Orderlyland who caused the economy to slow down? Let’s suppose he moves to Dynamicland, excited by the prospect of the…