Economics is actually not that complicated; it's just about a few things.

To be honest, a lot of people think economics is unfathomable, but it’s really just a cyclical system—production, trade, consumption, then repeat.

Who drives the economy?

You, me, businesses, the government—we all do. Every time you spend, you’re voting; businesses produce to meet demand; governments tweak the rules through taxes and interest rates. The three economic sectors work together:

• Primary sector: mining, farming, logging—providing raw materials
• Secondary sector: factories processing and manufacturing products
• Tertiary sector: logistics, advertising, services

Supply and demand restrict each other; if any link breaks, the whole chain is affected.

Why does the economy rise and fall?

The economic treadmill has four stages:

1. Expansion — New opportunities arise, unemployment drops, everyone is spending

2. Boom — Production capacity is maxed out but growth slows, small businesses get swallowed up

3. Recession — Costs rise, demand drops, stock prices fall, unemployment increases

4. Depression — The darkest hour, businesses go bankrupt, unemployment soars, money loses value

Then the cycle restarts. These cycles can be fast or slow:

• Seasonal fluctuations: short-term changes over a few months (like holiday spending)
• Economic cycles: major ups and downs lasting several years
• Structural shifts: decade-long changes driven by technological innovation

What manipulates the economy?

Policy: Government tax policies and central bank interest rates are the gas and brakes of the economy

Interest rates: Low rates → people are more willing to borrow and spend → economy speeds up; high rates do the opposite

International trade: Two countries with complementary resources can both benefit, but it can also hit local industries

Micro vs Macro

Microeconomics: Looks at individual businesses and people’s purchasing power and prices

Macroeconomics: Looks at national-level employment, inflation, exchange rates, GDP

Put simply, micro is looking at the trees, macro is looking at the forest.

Bottom line: The economy isn’t as mysterious as you think—it’s just a game between people and money, a dance between supply and demand, a tug-of-war between policy and markets. Once you get this, you can see through half the world’s operating logic.