Was watching summarized Econs videos.

To summarize them again, there are 6 videos:

The first is about the free market theory, micro econs, where the market will play itself with people in it. The equilibrium of demand and supply.

The second video is about the paradox of thrift - whether to spend of not? Early economist believed it’s better to save so that people have more buying power, and banks can use the money to invest on technology to increase efficiency. However this might result in lost of jobs due to replaceable workers and low wages, so unemployment goes up. Similarly, if we should spend and invest, we have lesser spending power, thus goods and businesses would have lesser and lesser buyers or investors, and might increase unemployment too.

The third talks about Phillips curve of high employment, high wages, increasing inflation. But because people can see the curve too, they started to demand higher wages when employment is high because of foreseen inflation, which would cause unemployment to go up while inflation goes up too.  Then both when down.

The forth is about Principle of Comparative Advantage. It is about countries specializing to a certain product for all nation to mutually growth instead of imposing taxes to prevent imports.   Yet again it is a slow way for countries to prosper, so people start to move to where the money is, which cause imbalance and defeats the initial intention of it.

The fifth is about the Impossible Trinity. Exchange rate, Interest Rate or Capital Flow. Exchange Rate Stability would ensure stable export and import rates. Interest Rate is to keep borrowers happy without upsetting savers because low interest rates would cause more people to borrow and more cash flows. Capital Flow is to keep money coming in and going out of the country.

However, the trinity could not work all at the same time.

If Exchange Rate is fixed and Capital Flow is free, Interest rates will variant (like China today)

If Capital Flow is Free, and Interest Rates are fixed, the Exchange Rate will fluctuate (like Britain – or Canada)

If Exchange Rate is fixed, Interest Rates are not touched to fight inflation or recession, then there is no control of the Capital Flow (like Argentina today)

The last video is about social influence.