"Macroeconomics Everyone Knows" Notes

"Macroeconomics Everyone Knows" Notes

Preface

When I was a junior in Netease Cloud Classroom, I came into contact with financial management, so I collected a lot of related courses to read. This "Macroeconomics Everyone Knows" is not bad.

"Everyone can understand macroeconomics"

20 + 14 + 17 + 19 + 15 + 12 + 10 + 17 + 22 + 17 = 163min = 2h43min

1. Macroeconomic foundation

1 Macroeconomic phenomena around

In the past few years, the income of the money that exists in the bank has been getting lower and lower (from more than five to two points). Why don't rich people dare to invest or sell the products of enterprises?

Reason: The economy is in recession and the products cannot be sold anymore, so the rich dare not invest anymore. The interest rate of banks has dropped.

2 The role of the government in the economy:

Causes of economic depression: economic overheating, consumption expectations, reduced consumption, reduced production, reduced income, and then a vicious circle

The three carriages of economic growth: consumption, investment, and export.

Two hands of the government: monetary means, fiscal means

Fiscal means: Government expenditure is greater than income, which is a deficit. Government expenditures include the salaries of 40 million civil servants, military expenditures for the army, support in poor areas, policies for laid-off workers, and bad debts of state-owned commercial banks; government revenues include taxes and revenue. National debt

The logic of issuing treasury bonds (the bank has a lot of savings, and then the government thinks of ways to spend it, so it issues treasury bonds and repays taxes;

Monetary means: take money away when the economy is good; put money when the economy is bad

Disadvantages of excessive economic growth: When the economy is too hot, if it does not slow down, it will hardly land and cause the entire economy to collapse;

Foreign trade: export tax rebates, encourage exports, and earn foreign exchange;

Trade surplus: exports are greater than imports (China); trade deficit: (the United States) can enjoy commodities from other countries cheaply;

3 The fundamental problem to be solved by the macro economy: sustainable economic growth

Research questions include: economic structure, how to grow, and factors driving growth

Research reasons include: sharing the benefits of economic growth, resisting the disadvantages of the economic downturn, and improving the quality of life

2. GDP

1GDP: An indicator to measure the economic level, which refers to the total amount of new material wealth produced by a country in a year; dealer = manufacturer-customer; GNP: the sum of the value of new products and services produced by a country over a period of time;

GNP is aimed at people; GDP is aimed at enterprises

The role of GDP: reflects the changes in the development of the national economy, rising signifies economic expansion, and falling means economic contraction; it provides a basis for the country to make macroeconomic policy decisions, and can also measure a country’s economic status;

2 Division of the three major industries

Primary industry: agriculture, including agriculture, forestry, animal husbandry, fishery, etc.;

Secondary industry: industry, including mining, manufacturing, water, electricity, coal, construction, etc.

Tertiary industry: commercial and service industries, including retail, transportation, warehousing, accommodation, catering, finance, real estate, etc.

3 National Economic Accounting Methods

Production method, distribution method, expenditure method (total expenditure = total output = total income): total output = consumption C + investment I + government purchases G + net exports (XM)

Orange output 8W = 3W consumption of clothes and shoes + 3W investment in Moutai + furniture purchase + import and export (orange-meat)

The three major revolutions of human knowledge in the twentieth century: Keynes’ macroeconomics, Freud’s psychoanalysis, Einstein’s theory of relativity;

3. How to boost the national economy

1 Economic growth (forty years of reform, the reason for rapid economic growth: demographic dividend, a large amount of labor)

Total amount, amount (per capita)

How does China catch up with the United States: Fast economic growth and high production efficiency (the essence of economic growth is the increase in production efficiency) The reason for the high labor productivity in the United States is that 3% of the agricultural population feeds the country, exports, and mechanizes work.

2 The troika of economic growth (consumption, investment, export)

Consumption: Domestic demand, that is, the consumption demand of domestic residents, which is the main driving force of the economy

Investment: Financial expenditures, such as national debt, education, science and technology, national defense, health, etc., are auxiliary to expand domestic demand;

Export: external demand, enter the international market through the industry of domestic enterprises, and expand product sales;

Demographic dividend: exports (the economic crisis has played off, and there is no money, the international market has reduced imports, so exports have also been reduced)

Consumption: Stimulate domestic demand (perennial poverty, so low consumption desire)

Investment: Infrastructure construction (the country needs the people's money to spend, and then repays the money with taxes, which is the main force in the reform and development period)

Three major economic difficulties (due to stimulating demand): overcapacity (steel), high debt, and property market inventory.

3 Supply-side reform

Resolve excess capacity: Eliminate zombie companies, increase industrial restructuring; prevent financial risks

Reduce business costs: encourage innovation, increase productivity, and produce high-quality products

Solve the problem of buying a house, enrolling in school, and seeing a doctor: improve affordable housing, education and medical resources. Solve the problem fundamentally.

4. The origin and significance of inflation

1 Inflation

Thirty years ago, I saved 400 yuan, I could have bought a house; now I have 800 yuan, but I can only buy good clothes

Inflation: rising prices stimulate production by manufacturers; consumers are worried about currency depreciation and are willing to consume, which then leads to economic development.

2 Two major indicators of inflation

CPI: Consumer Price Index, an index used to express the price changes of consumer goods and services. 1%~3% is half of GDP

PPI: Producer Price Index. Measure the changes in the price of raw materials, the higher the price, the more serious the inflation, the higher the value of the product, and the money becomes worthless; the lower the price, the lower the price of the product, and the unwillingness to produce; normally it should not rise or fall by 0%

PPI reflects the value level of the production link, and CPI reflects the price level of the consumption link. The fluctuation of the overall price level firstly comes from PPI. There are two industrial chains (industrial products, agricultural products)

PMI: Purchasing Manager Index. Reflect the overall economic situation and the general trend of change.

3 reasons

The essential reason: too much money, the money is worthless; deep-seated reasons:

Demand-driven inflation: total demand is greater than total supply, there are fewer commodities, and prices rise

Cost-driven inflation: wages, profits, raw materials

Imported inflation: rising foreign commodity prices, increasing money supply, and rising raw material prices.

4 Influence: It is good for the rich, but ordinary people are suffering;

5 how to resist

The first step: study finance, grasp macroeconomic changes, know in advance according to CPI indicators

Step 2: Learn about various anti-inflation tools, such as equity (stocks, funds), commodities (real estate, gold), insurance (participating insurance, universal insurance)

5. Deflation-destroying the economy

1 Deflation: The quantity of money decreases, purchases rise, and prices fall. There are too many industrial products and insufficient demand.

2 Reasons: banknotes are fixed, the total amount of commodities is increasing, and commodity prices are constantly falling; the fundamental reason is that there is insufficient money;

3 Impact: Insufficient currency, excessive production (insufficient consumption), price decline (decrease in profits), reduction in production (decrease in wages), decrease in currency (shrinking consumer demand), decline in purchasing power (commodity slowdown), downsizing of enterprises (causing unemployment)

4 resistance:

Cash: The King's Treasury Bond during the Great Depression: The Best Weapon Against Deflation

Stocks: a must-have for anti-inflation, a deflationary avoidance. Real estate: buying and selling

6. How the government regulates economic development

1 Market failure: A state in which supply and demand balance cannot be achieved through spontaneous adjustment of prices, and thus the optimal allocation of resources cannot be achieved.

2 Reasons for market failure:

Monopoly: restrict production, raise prices, obtain additional profits, and make the market fail;

Externality: A orchard has good income and has an absolute advantage, which makes the market fail; A fishery has high cost, small income and market failure.

Public goods: Demand is greater than supply, but no one consumes public goods.

Information asymmetry: false advertising persecutes high-quality products;

3 The economic functions of the government: stabilizing the economy, providing public services, market supervision, income redistribution

4 The relationship between government and enterprises: the government is the referee and the enterprise is the player

7. Fiscal Policy

1 The definition of fiscal policy: the policy that a country’s politics pursues to achieve certain macroeconomic goals;

Macroeconomic goals: stable prices, reasonable allocation of resources, reasonable income distribution, moderate economic growth, and improved quality of life.

2 Financial policy tools: taxation, public expenditure (financial budget, financial subsidies), government investment, national debt

3 Types of fiscal policy: proactive, austerity, neutral

Total supply = total demand, implement a neutral policy (balance policy)

Total supply <total demand, implement a tightening policy (balance policy), reduce expenditures, increase taxes, and curb total demand

Total supply> total demand, implement an expansion policy (deficit policy). Increase spending, reduce taxes, and expand aggregate demand.

8. Monetary Policy

1 Currency composition: base currency, derivative currency, deposit reserve ratio

2 The division of money supply: cash in circulation, demand deposits, savings deposits, and current assets.

Demand deposits reflect actual purchasing power; savings deposits are potential purchasing power

3 Three major tools of monetary policy: open market operations (positive repo, reverse repo), foreign exchange

9. How did the financial crisis arise

Type 1: currency crisis, debt crisis, bank crisis

2 Generation: Southeast Asia Financial Crisis on March 2, 1997

3 Impact: A large number of business closures, rising unemployment, and social depression

4 Performance: heavy burden of corporate debt, excessive money supply, severe inflation

5 Response: Avoid asset risks,

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