Issues

Issues

Six subjects account for the overwhelming majority of economic news: how fast the economy is growing, what energy costs, what production does to the environment, whether people can find work and what they are paid, how governments raise and spend money, and what a country buys from and sells to the rest of the world.

Each primer below is written to be read cold. It defines the terms, names the statistics that get quoted, explains the main mechanism at work, and sets out where the serious disagreements lie. None of them assume you have read the others.

The primers

The Economy

Growth, recessions, inflation and interest rates. What gross domestic product actually counts and what it silently omits, why a recession is dated by a committee rather than by a formula, how a consumer price index is constructed from a basket that keeps changing, and what a central bank can and cannot do about any of it.

Energy

Why fuel prices move the way they do. The structure of an oil market that sets one global price, the long lag between an investment decision and a barrel of output, why a pump price responds faster to a rise than to a fall, and how taxes, refining capacity and exchange rates each take their cut.

Environment

The economics of pollution and resource use. Externalities and why they are the textbook case of a market failing, the difference between a tax on emissions and a tradable permit, what cost–benefit analysis does and where its assumptions bite, and why the choice of discount rate can change a conclusion more than any measurement does.

Work and Wages

How labour markets are measured and what the measurements miss. Why the unemployment rate can fall for two opposite reasons, the difference between the household and establishment surveys, what "job creation" means when millions of positions are created and destroyed every month, and the honest state of the evidence on wages, automation and offshoring.

Taxes and Public Finance

Where government money comes from and where it goes. The distinction between who writes the cheque and who bears the cost, marginal versus average rates, the arithmetic of deficits and debt, and why the projections that dominate the coverage rest on assumptions worth reading before the conclusions.

Trade

Comparative advantage, trade deficits and supply chains. Why the gains from trade are diffuse and the losses concentrated, what a trade deficit is and is not evidence of, how tariffs actually work their way into prices, and what four decades of research says about trade and employment.

Going further

The special reports take four of these subjects further than a primer can. The Balance Sheet covers the reporting side — how these stories are assembled, and the recurring traps. If you would rather go to the underlying numbers yourself, the data sources page lists the official series and where to find them, and the FRED database maintained by the Federal Reserve Bank of St. Louis is the single most useful free tool for looking up almost any series mentioned on this site.