David Mitchell is waiting to explain six key economic concepts in sixty seconds apiece. Which is pretty economical in itself, if you think about it...
Transcript: An economy is a tricky thing to control, and governments are always trying to figure out how to do it.
Back in 1776 economist Adam Smith shocked everyone by saying that what governments should actually do is just leave people alone to buy and sell freely among themselves.
He suggested that if they just leave self-interested traders to compete with one another, markets are guided to positive outcomes 'as if by an invisible hand'.
If someone charges less than you - customers will buy from them instead – so you have to lower the price or offer something better.
Wherever enough people demand something, they will be supplied by the market – like spoilt children – only in this case, everyoneʼs happy.
Later free-marketeers like Austrian economist Friedrich Hayek, argued that this ʻhands offʼ approach actually works better than any kind of central plan.
But the problem is, economies can take a long time to reach their ʻequilibriumʼ, and may even stall along the way. And in the meantime people can get a little frustrated, which is why governments usually end up taking things into their own more visible hands instead.
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The Open University under Creative Commons BY-NC-SA 4.0 license
60 second adventures in economics: The Paradox Of Thrift
Is it better to save or to spend? According to Keynes, if you don't spend, you're going to make the economy even worse.
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The Open University under Creative Commons BY-NC-SA 4.0 license
60 second adventures in economics: The Phillips Curve
Bob Phillips took some time out of crocodile hunting to have a stab at explaining how wages, prices and unemployment interplay.
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The Open University under Creative Commons BY-NC-SA 4.0 license
60 second adventures in economics: The Principle Of Comparative Advantage
Why do countries sign free trade agreements? It's not just because they get to keep the pens, but to try to take advantage of their comparative advantage.
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The Open University under Creative Commons BY-NC-SA 4.0 license
60 second adventures in economics: The Impossible Trinity
Nations want it all - currency flows, low interest rates and stable exchange rates. Dream on, nations, you've got to choose.
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The Open University under Creative Commons BY-NC-SA 4.0 license
60 second adventures in economics: Rational Choice Theory
People are pretty rational. But not quite rational enough for the good of the economy.
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World Economic Forum under CC-BY-SA licence under Creative-Commons license
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As the big beasts of the world economy try to predict the future at Davos, does all that networking do anything beyond protect their positions?
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David Haines on lessons to be learned from Germany's economy
"Germany prides itself on its education system"
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BA (Honours) Politics, Philosophy and Economics
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