The Two Markets

An introduction to economics that explains the workings of the ordinary market (the real economy) and the financial market, and — this is crucial — how the two interact. This approach answers many questions that standard textbook economics leave unresolved, because it treats these markets in isolation.

Course Dates: Open-ended
Enrollment Dates: Enroll Anytime
Who can Enroll: Registered users.
Course Language: English
Price:  FREE
Ruben Alvarado
Ruben Alvarado
The Two Markets

About this course

"The Two Markets" presents an understanding of how the economy works. It provides you with concepts that go beyond standard textbook economics. You will learn about trade balances and imbalances, the "zombie economy," the zero-interest-rate environment, the global liquidity glut, quantitative easing, and more. Also covered is historical background into e.g. the gold standard and the evolution of central banking. Throughout the presentation, the thesis of the two markets is brought to bear to elucidate otherwise intractable issues. Furthermore, the elucidation of how financial markets work will especially benefit those called to be stewards of disposable funds -- i.e., investors.

Course Structure

  • Introduction
  • The Model of the Circular Flow
    • the simple mechanics
      • Questions
  • The Role of Banking
  • The Two Markets
    • the key to unraveling the mystery
      • Questions:
  • Two Kinds of Investment
    • the ambiguity of a phrase
      • Questions:
  • Flows Between Economies
    • the economies of the economy
      • Questions:
  • Pathology #1: Intervention
    • transactions of decline
      • Questions:
  • Barriers to Migration
    • The exigencies of national sovereignty
      • Questions:
  • The Gold Standard
    • gold flows and the automatic mechanism
      • Questions:
  • Pathology #2: Short-Circuiting the Gold Standard
    • how we got the Great Depression
      • Questions:
  • The Role of Central Banks
    • how we got central banks
      • Questions:
  • Bretton Woods and Beyond
    • transition to the modern era
      • Questions:
  • Floating Exchange Rates
  • Pathology #3: Competitive Pegging
    • the way things actually are
      • Questions:
  • The Pioneer: Japan
    • deconstructing the Asian Tiger growth model
      • Questions:
    • sterilization of the dollar
      • Questions:
    • the asset bubble
      • Questions:
  • The Sorcerer's Apprentice: China
    • the student outperforms the teacher
  • Pathology #4: The Savings Glut and the Advent of the Zombie Economy
    • generals always fight the previous war
  • Quantitative Easing
    • a reprieve, not a resolution