What is macroeconomics, and why should you care? A quick intro to how the world works.
Why should you care about macroeconomics?
When inflation is rising, and an economic downturn is looming, how can you make the best decisions?
What would happen if we went to a four-day working week?
How can we know if an economy is heading for boom or bust?
And wait, what the heck is inflation anyway?
The answer to these questions and more can be found in **macroeconomics**.
What even is macroeconomics?
Macroeconomics is the study of economies on a macro scale. It’s not individual loans, or house prices, or the price of fish. It is all of these and more.
It is the knowledge of what makes a nation boom, and what makes it sink. It is unemployment and affluence. It is soaring prices and plummeting demand.
Most importantly, it is how all of these things are connected, and how changes in one affect everything else.
And believe us, **macroeconomics affects everyone**.
What is macroeconomics for?
Through understanding macroeconomics, economists try to achieve three things:
To **boost economic growth, reduce unemployment, and stop inflation and deflation.**
Understanding macroeconomics can help you make sense of situations such as in 2008-2009, when the Zimbabwean Reserve Bank issued $100 trillion banknotes, that were practically worthless.
Or how in 2012, oil accounted for 95% of Venezuela’s exports. Yet, in 2020, the average citizen rejoiced if they only had to queue overnight to fill up their car.
Why should you care?
Through understanding macroeconomics, we can better understand the world around us. The seemingly invisible forces that push economies up and pull them down become visible, and we can start to see more clearly how to make better decisions for ourselves, our families and our businesses.
This is even more relevant in a Post COVID world, where economic shocks and irrational behavior (toilet paper anyone?), have caused disruption that we are still recovering from.
Forget what you know about how money works.
Learn to ignore the hype
And start to decode the ebb and flow of macroeconomics.