Economics
Understanding economics gives you a superpower: you can read market movements, grasp the effects of policy and make better decisions — in business and in your personal finances alike.
Macroeconomics
The big picture of the national economy: growth, inflation, employment and international trade.
The combined value of all goods and services a country produces. The basic measure of an economy's size and growth. GDP growth means more jobs, income and opportunities.
A rise in the general price level over time, measured by the consumer price index. The ECB targets 2% inflation — a “healthy” level that keeps the economy moving without overheating.
Central banks (the ECB, the Fed) set the cost of borrowing through their policy rate. Low rates = cheap money = more investment. High rates = money gets more expensive = inflation falls.
The share of the labor force that is out of work and looking for a job. Natural unemployment is around 4–5% — never zero, because people change jobs.
The balance between a country's exports and imports. A current account surplus means the country exports more than it imports — capital flows into the country.
Government revenue (taxes) and spending (services, subsidies). When spending exceeds revenue, the government borrows. Debt relative to GDP is a measure of sustainability.
Microeconomics
The economic behavior of individual markets, companies and consumers.
The basic law of the market economy: when demand rises and supply stays the same, the price goes up. The equilibrium point sets itself automatically.
How much demand changes in response to a price change. Elastic = even a small price increase cuts sales. Inelastic = an essential good.
Perfect competition (many small players), monopolistic competition (differentiation), oligopoly (a few big players) and monopoly (one player dominates).
The cost of producing one more unit (marginal cost) vs. the extra benefit it brings. Profit is maximized when marginal benefit = marginal cost.
The mathematical analysis of strategic interaction. It studies how decisions depend on what competitors do.
Side effects of market activity that fall on third parties. Negative: pollution. Positive: vaccinations.
Key economic indicators
GDP growth
The rate at which the economy grows, as a percentage. Positive = growth, negative = recession. 2–3% is a healthy level.
Inflation (%)
The rate at which prices rise. The ECB targets 2%. Above 5% calls for rate hikes; below 0% = deflation.
Policy rate
The ECB's deposit rate steers all market interest rates. Hikes curb inflation; cuts stimulate the economy.
Unemployment rate
The share of the labor force that is out of work. The natural level is around 4–5%. It measures the health of the labor market.
Current account
Exports minus imports. Surplus = capital flows in; deficit = borrowing from abroad.
Public debt / GDP
Government debt relative to the size of the economy. Maastricht criterion: max 60%. Finland approx. 75% (2025).
University Channels
Of our YouTube recommendations for economics, we have kept only the open channels of universities and business schools.
MIT OpenCourseWare
Open lectures from MIT. The Economics courses are especially good: microeconomics, macroeconomics, finance theory and game theory from a top university, free of charge.
View channelStanford Online
Stanford University's open lectures on economics, finance and data science. World-class teaching, free of charge.
View channelHarvard Business School
Case analyses and expert lectures from Harvard's business school. Where economics meets business, at the highest level.
View channelBusiness idea tip
Understanding economics helps you find business opportunities:
- Market gaps: Once you understand supply and demand, you can see where the market has gaps.
- Reading the cycle: A recession creates different needs than an upturn — both are opportunities.
- Regulatory change: New legislation always creates new business opportunities (e.g. data protection → GDPR consulting).