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Economics and money

How money, prices and markets work, from what inflation is to why central banks raise interest rates and what a stock really is. The notes explain the ideas and the evidence; none of them is advice on what to do with your money.

22 notes from Graphite. Free to read, with no account. Nothing here is for sale.

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Where to begin.

The note that answers the topic’s biggest question, then the two it leads to most directly.

  1. Start here

    What is economics? How the economy works, in plain words

    Economics is the study of how people, firms and governments choose what to do with limited resources, and how those choices add up to prices, jobs and growth.

    Graphite7 min read

  2. Then

    What is inflation? Why prices rise, in plain words

    Inflation is the rate at which prices across an economy rise over time, so each dollar buys a little less. It is caused by too much demand, costly supplies and expectations.

    Graphite6 min read

  3. And then

    What is GDP? How a country's economy is measured

    GDP, gross domestic product, is the market value of all final goods and services a country produces in a period. It is counted three ways that should give one answer.

    Graphite6 min read

Every note

All 22 notes in Economics and money.

The three above, then the rest. Each answers one question and links to the notes it leads to.

  2. Why is the dollar the world's reserve currency?

    The dollar became the world's reserve currency through Bretton Woods in 1944 and stays there because no rival offers markets as deep, open and trusted as America's.

    Graphite7 min read

  5. What is the S&P 500? How the index works

    The S&P 500 is an index of about 500 large US companies, weighted by market value. It covers roughly 80% of the US stock market and is the usual benchmark for it.

    Graphite6 min read

  6. Why is gold valuable? What gives it worth

    Gold is valuable because it is rare, never rusts, is easy to shape and divide, and has served as money for thousands of years, so people and central banks still trust it to hold value.

    Graphite6 min read

  8. What is purchasing power parity? PPP in plain words

    Purchasing power parity is the exchange rate at which two currencies would buy the same basket of goods. Economists use it to compare incomes and economies after allowing for local prices.

    Graphite6 min read

  9. What was the dot-com bubble? Why it grew and burst

    The dot-com bubble was a surge in internet stock prices from about 1995 to March 2000, followed by a crash that wiped out most of the Nasdaq's value by October 2002.

    Graphite6 min read

  10. What is the Federal Reserve? What the Fed does

    The Federal Reserve is the central bank of the United States. It sets short-term interest rates to keep prices stable and jobs plentiful, supervises banks and lends to them in a crisis.

    Graphite7 min read

  11. What is capitalism? Markets, profit and ownership

    Capitalism is an economic system in which private owners run businesses for profit and prices are set by buying and selling in markets, not by a government plan.

    Graphite6 min read

  12. What is a Ponzi scheme? How the fraud works

    A Ponzi scheme is an investment fraud that pays earlier investors with money from newer ones instead of real profits, so it must collapse once new money stops coming in.

    Graphite6 min read

  13. What is money? Why paper and numbers have value

    Money is anything people widely accept in payment, use to price things and trust to keep its value. Today most of it is bank balances, created when banks make loans.

    Graphite6 min read

  14. What is the national debt? Debt vs deficit explained

    The national debt is the total the federal government owes from years of borrowing. A deficit is one year's shortfall; each one adds to the debt, which passed $40 trillion in 2026.

    Graphite7 min read

  16. What is a tariff? How tariffs work and who pays

    A tariff is a tax on imported goods, paid at the border by the company bringing them in. How the cost then splits between foreign sellers, importers and shoppers, and why countries use them.

    Graphite6 min read

  17. What is supply and demand? How prices get set

    Supply and demand is how markets set prices: buyers want less as the price rises, sellers offer more, and the price settles where the two meet. Worked through with concert tickets.

    Graphite6 min read

  18. What is a recession? How economists define a downturn

    A recession is a broad fall in economic activity lasting more than a few months. Why "two quarters of falling GDP" is only a rule of thumb, what causes recessions, and how they're felt.

    Graphite6 min read

  19. How do interest rates work? Borrowing, saving, the Fed

    An interest rate is the price of borrowing money, set as a percentage per year. How simple and compound interest add up, and how a central bank's rate reaches mortgages, cards and savings.

    Graphite6 min read

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