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Economics: ideas and frameworks explained

A collection of ideas, frameworks and techniques related to Economics, explained clearly so they are easy to understand and share.

Pace Layers diagram by Stewart Brand explained: fashion, commerce, infrastructure, governance,culture, nature. Fast layers innovate, slow layers stabilise.Pace Layers: Six layers of robust and adaptable civilisationsWhat is the subscription trap? A picture example showing how canceling subscriptions is made difficult with delays, friction, and sludge.The Subscription TrapIllustration of Adam Smith’s quote about trade: “It is not from the benevolence of the butcher, the brewer, or the baker…” showing how self-interest leads to mutual benefit in trade and a tipsy baker.The Butcher, the Brewer, the Baker — Adam Smith quoteWhat is Fauxtomation explained with claims of automation actually done by people, often across the worldFauxtomationThere is no away illustration: A 4 panel cartoon has a child asking a parent what to do with some trash or rubbish. The Dad says just throw it away. After some confusion the child chucks it off planet earth. The final panel reads: Oh wait. There is no "away"There is no "away"The Overton Window illustration: with the example of two children lobbying their parents on bedtime policies and the range of politically acceptable ideasThe Overton WindowComparison of typical goods selling by the box load at a retailer, and veblen goods — that have greater demand the more expensive they are — with people on a fancy yachtVeblen goodsWhat is the meaning of fungible and non-fungible goods with examplesFungible - non-fungibleTwo people walk through many white swans before bumping into a black swan. One claims it was obvious all along.Black swan eventsPhysics envy: a football coach looks on exasperated as none of his young team play according to the planPhysics EnvyGini Coefficient illustration: a scale of wealth distribution is depicted where green squares represent the wealth of an individual within a population. On the left, every individual has a green square - equal wealth distribution. In the middle, the wealth sits with only half the population. On the right, all the wealth sits with only one person - they have a shiny crown and gold chain to display that wealth! The Gini coefficientWishcycling: someone wonders about whether something can go in the recycling — followed by the effect on each part of the recycling chain afterWishcyclingThe bullwhip effect: A person whipping a bullwhip showing how the amplitude of shocks increases through retailers, manufacturers and suppliersThe Bullwhip EffectWhat is the thesis–antithesis–synthesis model, sometimes erroneously called Hegel’s dialectic? A sketch showing an example for a new idea (thesis), an opposing reaction (antithesis), and the tension resolving into a synthesis that becomes the start of a new idea.Thesis, antithesis, synthesisThe Law of Diminishing Returns illustration: a chart of broth quality increasing from a lone chef stirring a large pot to eventually decreasing once again as a crowd of chefs get in each other's way and goof off. Standard.Law of diminishing returnsWhat is the Cobra Effect? A visual explanation showing how a plan to pay for dead cobras in India backfired when people began breeding cobras to claim the reward.The Cobra EffectBeyond developing and developed world views: a world of 4 income levels from Sketchplanations, Factfulness and GapminderA world of 4 income levelsWhat is Jevon's paradox in economics: fuel use tends to increase, not decrease, despite efficiency gains, with definition and example. Observation from William Stanley JevonsJevon’s ParadoxRecession vs Depression illustration: Recession is depicted by a man in a flat cap sitting on the edge of the pavement next to a man with a briefcase on his way to work. Depression is depicted by both men now sat on the pavement in despair. Recession vs depressionRival and non-rival goods illustration: a scale with rival goods at one end (left) and non-rival goods at the other (right) displays items at each extreme and along the scale in between. eg. (left to right) cup of coffee; roads; software. Rival and non-rival goodsThe cost of doing nothing

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