How Money Works
Start at the source — inflation, interest, the Fed, and the forces moving every dollar.
41 articles
FeaturedWhat Is Basis Points?
A unit of measurement for interest rates and yields, where 100 basis points equals 1%. Learn why basis points matter in financial markets and loan comparisons.
Read more →Browse How Money Works
Deep Dives
The Gini Coefficient and the Lorenz Curve: Measuring Inequality in a Single Number
The Gini coefficient compresses a whole income distribution into one number between 0 and 1. Here's what it measures, how to compute it, and where it misleads.
How Income Is Distributed in the United States: A Data-Led Look
The top fifth of U.S. households takes about half of all income; the bottom fifth gets roughly 3%. What the Census data shows, and what it leaves out.
Interest Rates and the Rental Price of Capital: How Firms Decide What to Build
The interest rate is the rental price of capital - the hurdle every investment must clear. Here is the net-present-value math firms use to decide what to build.
What does the Federal Reserve actually do?
The Fed steers the economy through interest rates toward stable prices and full employment. Here's how it works.
What Was the Dot-Com Bubble?
The 1995-2000 speculative bubble where internet companies with no profits traded at billion-dollar valuations. Learn the pattern and aftermath.
What Was the Great Depression?
The worst economic collapse in modern history (1929-1939), when unemployment hit 25% and GDP fell 30%. Learn the causes and lessons.
Trade Doesn't Cost Jobs — It Moves Them. Here's the Evidence.
The idea that imports destroy jobs and trade is zero-sum is intuitive, persistent, and wrong in the aggregate — but the real story is more honest than either…
How Markets Find Their Price: Solving for Equilibrium
Where supply meets demand: step-by-step equilibrium math, a surplus/shortage table, and comparative statics showing exactly how curve shifts move price and…
Tariffs: Winners, Losers, and the Deadweight Loss Nobody Talks About
A tariff helps domestic producers and the Treasury, but it costs consumers more than both gain combined. The gap is deadweight loss — pure value destroyed.
Quick Answers
What Is Core Inflation?
Inflation excluding volatile food and energy prices. Shows underlying price pressure.
Read more →What Is Short Selling?
Selling shares you don't own with the goal of buying them back at a lower price. Betting on stock prices falling.
Read more →What Is Recession?
Two consecutive quarters of negative GDP growth. The economic contraction phase of business cycles.
Read more →What Is the S&P 500?
An index of the 500 largest U.S. companies, used as a benchmark for the overall U.S. stock market.
Read more →What Is P/E Ratio?
Price-to-Earnings Ratio—the price of a stock divided by annual earnings per share. A key valuation metric.
Read more →What Is the Consumer Price Index (CPI)?
A measure of average price changes for a fixed basket of goods and services. The primary inflation metric.
Read more →What Is Quantitative Easing?
A monetary policy tool where the central bank buys large quantities of government and mortgage securities to inject money into the economy when interest rates…
Read more →What Is the Yield Curve?
A chart plotting bond yields across different maturities. The shape signals economic expectations.
Read more →What Is Deflation?
Decrease in the general price level of goods and services. Often more dangerous than inflation, deflation causes economic stagnation.
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