Ask an economist what the biggest questions are in the world today and you might be surprised by the answer. At a time when the pandemic has captured the full attention of experts, some have managed to remain aloof from these immediate concerns. Despite the massive fiscal hole created by the pandemic response, we still need specialists focused on the long-term economic challenges and the multi-cycle trends that transcend the current crisis.

Economists take the long view. We will always need economists to help governments formulate policy responses to immediate problems, but the real work of economics is in understanding…

There’s a kind of wisdom in herd behavior. When you see a large group of people fleeing in panic from some unseen threat, you could hang around and find out what all the fuss is about, or you could join them in their frenzied evacuation. The safest option is likely the latter, but if you felt dumb following the crowd, you could take a big risk and stand out on your own. Sometimes, waiting until you have more information is the fool’s choice when the situation demands immediate action.

Herd behavior is one of those highly evolved human instincts that…

If there was a way of thinking that encapsulated the foundation of the United States it was that the American people were destined for greatness yet had still to prove themselves worthy of it. The idea that one could be born into greatness was anathema to American republican virtues, but even so, Americans managed to preserve in their own minds a sense of manifest destiny.

Not only would they inherit a vast, vibrant, and fertile land, they would — by prioritizing hard work over unproductive leisure, and investing the surplus of their labor back into their own enterprises and communities…

For years central banks have shown nothing more than a passing interest in digital currencies. If the topic was raised, it was usually to remind us that crypto currencies and other private digital money providers would have a hard time competing with the government. Central banks are the ‘only game in town’, not just because they have the ability to backstop financial markets, but because they have the power to create legal money while regulating payments and exchange.

This haughty attitude to digital currencies has changed almost overnight. In the depths of a global pandemic, central banks are competing tooth…

The Australian federal budget is long-awaited, not just because we finally get a glimpse of the immediate fiscal cost of the pandemic but because we now have a clear articulation of the government’s assumptions about how the pandemic will evolve and what the recovery will look like.

Australia is running one of the most bifurcated policy experiments of the pandemic, with some states close to fully easing restrictions, and others still sweating anxiously over the numbers. …

Last month a very interesting tidbit was released by the U.S. Federal Reserve. It shows, remarkably, that households, businesses, and governments are the wealthiest they have ever been, both in nominal and real terms. The release covers the June quarter, which includes much of the economic fallout from the nation-wide lockdowns. The fact that households have not only grown their net worth during this recession but grown it to the highest recorded level in history is something worth delving into.

If you feel like you’re missing something, I’m with you. Recessions are supposed to destroy wealth, not create it. Certainly…

It is a strange thing to hear economists talk of ‘animal spirits’ who themselves appear to be animated by little more than elaborate, closed-off theories. There are more than enough economists who claim some insight into how economies operate without ever gaining first-hand experience of the market. Exposure to the markets is essential if we want a deeper understanding of the interplay between finance and economics. The two are intertwined, and one cannot be fully understood without the other.

When we invest our money and expose ourselves to the vicissitudes of the market, we are left with psychic imprints that…

Given the hype surrounding America’s brave new carmaker, it’s hardly surprising that many of us struggle to buy into the vision, let alone the stock. Even after coming off its most recent all-time high, the valuation is simply too risky, and the road is littered with broken promises. But if we filter some of Tesla’s wilder announcements, we are left with a company that will fall well short of its goals while still managing to disrupt the car industry and leave competitors in its wake.

The now annual Battery Day event has come and gone for 2020. This year it…