Advanced Macro Articles and Guides
TickerPosts guides and articles tagged advanced macro. Plain-English, calm, and written for everyday investors. 10 posts.
What is an inverted yield curve, and why has it historically predicted almost every recession?
Inversion is a market signal that today’s tight money may become tomorrow’s slowdown.
· 1 min read
What is the Repo Market, and why did it almost break the financial system in 2019?
Repo is the market for collateralized overnight cash, and stress there can spread quickly.
· 1 min read
What is Yield Curve Control, and how does a country cap interest rates by force?
YCC caps yields by turning the central bank into the buyer willing to enforce the target.
· 1 min read
How do real interest rates differ from the nominal interest rates we see on the news?
Real rates equal nominal rates minus inflation expectations, roughly speaking.
· 1 min read
What is Modern Monetary Theory, and does it really claim deficits do not matter?
MMT shifts the question from can the government pay to what happens to inflation and resources.
· 1 min read
What is the velocity of money, and why can printing trillions result in zero inflation if velocity drops?
Money supply matters, but money that sits still has less inflationary force.
· 1 min read
What is the Triffin Dilemma, and why does the global reserve currency have to run perpetual deficits?
The world wants dollars, but supplying enough dollars can weaken confidence in the supplier.
· 1 min read
What is a liquidity trap, and why does printing money stop working when interest rates hit zero?
Near zero rates, adding liquidity may not change behavior if borrowers and lenders both stay cautious.
· 1 min read
What is the difference between demand-pull inflation and cost-push inflation?
Demand-pull starts with too much demand. Cost-push starts with higher costs.
· 1 min read
What are Eurodollars, and how does a massive supply of US dollars exist outside the control of the Federal Reserve?
Eurodollars are offshore dollar promises created by banks, not stacks of cash in Europe.
· 1 min read