Macro Models

Lecture handout: Macro Models: from DICE to doughnuts

This session integrates ecological concerns wirth standard economics, providing an overview of how macroeconomists model the economy and how those methods and models relate to climate issues.

For a history of the Phillips curve, listen to:

Here are the scorecards on social progress mentioned:

In some versions of this presentation I discuss agent-based models. You can play with the Schelling model here. To learn more about ABMs I recommend this Runestone Academy interactive textbook. Also see:

Further readings:
  • Boulding, K.E., 1977, “Notes on goods, services, and cultural economics” Journal of Cultural Economics, 1(1):1-12
Recommended audio:
  • Macro 6: DSGE“, Anthony J. Evans (for more depth on Macroeconomic models including my other podcast episodes see here)
Recommended videos:

Here is a fascinating video (in French) on the limits to growth and the World 3 model

Here is Ray Dalio’s 30 minute explainer on his economic framework:


Here’s a short quiz to test your knowledge about the sessions:

Learning Objectives: Consider the upper limits of economic growth and the impact of economic activity on the environment.

Macro Trends

Lecture handout: Macro Trends

Macroeconomics can be a daunting subject matter but it is too important to be left to specialists. All senior managers need to be able to understand and interpret the macroeconomy, and reflect on the factors that cause it to change. This module equips participants with a foundation in the models and frameworks needed to make sense of our context and policy responses, and presents a number of key risks. We will familiarise ourselves with global growth forecasts and identify the key challenges facing policymakers. 

This lecture provides an overview of global growth prospects and surveys some key challenges facing policymakers.

Here is the quiz.

Emoji Equation: Before the live session you could watch this video and complete this quiz.

Macro Risk: I have a follow up live session which includes this activity.

You can find the latest global growth forecasts from the institutions mentioned in the lecture here:

Where to look for good charts:

What you should be reading:

Newspapers: The Economist Financial Times The Guardian (international edition)

Business press: Harvard Business Review • McKinsey QuarterlyKnowledge@Wharton 

What I’ve been reading:

✍️ What I’ve been writing:

Suggested podcasts:
  • Planet Money by NPR – short introductions to key topics
  • Macro Musings, by David Beckworth at the Mercatus Center – interviews with relevant academic and policy experts
ℹ️ Background resources:
  • The best way to keep on top of macroeconomic trends are to subscribe to the Financial Times or The Economist.
  • An Inflation Primer” Patrick Horan, Mercatus Center Policy Brief, July 2022 – a good background primer on inflation
  • Evans, A.J., 2020, “Economics: A Complete Guide for Business” London Publishing Partnership – my managerial economics textbook is intended to provide a thorough but readable overview of the most important elements of macroeconomics

Here’s a short quiz to test your knowledge about the session:

Economic Freedom 101


Lecture handouts for the Jan 2020 version are available here.


This short course provides provides a survey of global poverty and a discussion of the causes of prosperity. Particular emphasis is placed on the institutions required for market exchange, and the importance of economic calculation. As a satellite photo of the Korean peninsula makes clear, socialist planning is literally groping in the dark. We will look at the theoretical reasons behind this claim, and the empirical validation that economic freedom matters.


The course does not rely on any previous study of economics.

Teaching methods

  • Lectures (3 sessions)


The course is designed to tie into Chapters 4 and 12 of the following (amazing) textbook:

The website for the book contains an array of other resources:

An additional reading list is available here:

An edited list of highly recommended articles from The Economist is here:


9am Session 1

Economics matters: The link between economic institutions and global prosperity

In this lecture I will ask some broad and fundamental questions about the application of economic theory to the real world, and the role of the economist as a force for making the world a better place. I will try to convince you that we have a fairly good understanding of what causes economic growth, and how important this is for raising living standards and improving people’s quality of life. In other words, economics matters.

10:45am Break

11:00am Session 2

Groping in the dark: Why socialist calculation is impossible

12:30pm Lunch

2:00pm Session 3

Economic transition in Central and Eastern Europe: Shock therapy or gradualism?

3:30pm Finish

If you’ve taken the course, you can check your learning with this quiz:

Can also include the Bag Game and the International Trade Game

Monetary Theory and Policy Workshop


The purpose of this workshop is to understand basic models in contemporary Monetary Theory and Policy.

(Deep) background readings:

  • Patinkin, D. (1956) Money Interest and Prices Row, Peterson & Co
  • Friedman, M., and Schwartz, A., (1963) A Monetary History of the United States 1867-1960, Princeton
  • Woodford, M., (2003) Interest and Prices, Princeton


Problem sets:

Screen Shot 2015-12-30 at 09.36.17Readings on methods:

  • Origins of VAR – Friedman & Meiselman (1963); Lucas (1976); Sims (1980)
  • VAR – McCandles & Weber (1995); Bjornland (2000)
  • Narrative measures – Romer & Romer (1990)
  • Case studies – Sargant (1986)
  • Origins of DSGE – Kydland & Prescott (1982)
  • DSGE and Central Banks – Smets & Wouters (2002, 2007)
  • DSGE – Sbordone et al. (2010); Dotsey (2013); Romer (2011, Chapter 7)
  • After DSGE – Solow (2008); Blanchard (2016)

Two lectures on methods:

Other readings:


Training programs:


Software links:




A Short Introduction to Macroeconomic Policy



This short course provides an overview of the ways in which governments try to influence the economy. It will provide an explanation of what monetary and fiscal policy are, and why they are used. We will assess the ECB’s response to the financial crisis and the 2009 Obama stimulus bill. Emphasis will be on providing a framework for participants to refine their own opinions.


The course does not rely on any previous study of economics. However, a familiarity with economic terms (such as “inflation”, “GDP”, “balance sheet”), and an awareness of contemporary policy debates (such as zero lower bound monetary policy), will be useful. The course is aimed at people who watch Newsnight but don’t quite feel they understand the economic foundations of what’s being said.

Teaching methods

  • Lectures (2 sessions)
  • Case discussion (1 session)
  • Workshop (1 session)


The only mandatory readings are provided in the schedule below. However the course is designed to tie into the following (amazing) textbook:

The website for the book contains an array of other resources:

An additional reading list is available here:

An edited list of highly recommended articles from The Economist is here:


9:00am  Breakfast

9:15am  Welcome address

9:30am Session 1: Monetary policy: A Beginner’s Guide to Central Banking*

Video: “An introduction to the Dynamic AD-AS model

11:15am Break

11:30am Session 2: The Euro in crisis

“The Euro in Crisis: Decision Time at the European Central Bank” Harvard Business School case no. 9-711-049 (£)


1. How does the ECB conduct monetary policy?

2. What actions were taken after the BNP Paribas freeze?

3. How do these actions compare to the Federal Reserve?

1:00pm Lunch

2:00pm Session 3: Fiscal policy: The Confidence Multiplier*

3:30pm Break

3:45pm Session 4: Workshop

Market for Managers Problem Set

Questions: 7.1, 7.2, 8.1, 8.2, 8.3, 8.4, 8.5, 8.6, 8.7, 8.8, 8.9, 9.1, 9.2, 9.4

4:45pm Debrief

5:00pm Finish

Note: Sessions marked with an asterix (*) have a lecture handout available in advance. Cases marked with a pound sign (£) will be distributed in advance.


The course does not cover the following: international economics, business cycle theory, growth theory, supply-side economics.

Numeracy Skills Bootcamp

In 2008 I was asked to provide a short, intensive bootcamp for incoming students. This page is a collection of the resources that I used for that course. It contains some slides that define and explain key concepts, and also provides some examples of numeracy tests. In addition, I noticed that many students – particularly females – felt that they “weren’t math people”. I’ve done a video to discuss these fears. I hope you find these resources helpful.

I also recommend the following page, which is full of links:

Part 1. Fundamentals of Mathematics


 Download the handouts here.

  • Socrative Quiz: Fundamentals of Mathematics

Additional topics:

Some fascinating ideas:


Part 2. Practice Tests

Download the handouts here.







Additional resources:

Part 3. Gender Differences & Mathematics

Download the handouts here.

Further reading:

And remember:


This is part of my online course on Analytics.

The Great EU Debt Write Off


This page presents the results of a simulation conducted by students at ESCP Business School. The aim was to uncover the amount of interlinked debt between Portugal, Ireland, Italy, Greece, Spain, Britain, France, and Germany; and then see what would happen if they attempted to cross cancel obligations.

The results were fascinating:

  • All countries can reduce their total debt by 64% through cross cancellation of interlinked debt, taking total debt from 40.47% of GDP to 14.58%
  • Six countries – Ireland, Italy, Spain, Britain, France and Germany – can write off more than 50% of their outstanding debt
  • Three countries – Ireland, Italy, and Germany – can reduce their obligations such that they owe more than €1bn to only 2 other countries
  • Ireland can reduce its debt from almost 130% of GDP to under 20% of GDP
  • France can virtually eliminate its debt – reducing it to just 0.06% of GDP

The formal study has been published by the journal Simulation and Gaming.

Here is the before and after:

Images by Soapbox

The idea

The idea is very simple – if Portugal owes Ireland €0.34bn of short term debt, and Ireland owes Portugal €0.17bn, we can write off Ireland’s obligations and leave Portugal with a reduced debt of €0.17bn.If you are both a debtor and a creditor you do not need money to settle claims. Rather than require additional funds to deal with choking debt, why not write it off?
The diagrams above show the before and after situation, based on analysis done by students. The simulation itself took place on May 17th 2011 and involved three separate trading rounds.

Students in the Pre-Masters Year of the ESCP Europe Masters in Management program took part in the trial run on March 22, 2011, which involved only the PIIGS countries. The key results were the following:

  • Portugal was able to cut its debt in half, primarily because so much of that debt was held by Spain.
  • Ireland reduced its debt by 99.74%, mostly through deals with Spain and Portugal. It was able to make use of trading period 3 by moving short- and medium-term debt into long-term debt.
  • Italy had a weak bargaining position, as it began with the worst debt position (a high concentration of short-term debt). After reducing debt by 50% in period 1, it was unable to make further gains.
  • Greece reduced its debt by 11% but mostly because it had little exposure to the other PIIGS countries. It was unable to make any trades after period 1.
  • Spain managed to eliminate all of its debt obligations to the other PIIGS countries, although it owed significant amounts to Britain, France, and Germany. Spain found that it could deal with everyone at the table quite equally.

Main data sources

Resources for instructors

If you would like to replicate this simulation in your classroom, download this zip file. It includes:

  • All of our data (including sources and notes)
  • The starting positions for each country
  • The results table to provide real time information to students
  • A summary sheet for students to complete each round
Please let us know how you get on!

Further reading

Media coverage

For more details or media enquiries please contact Anthony J. Evans.

Colloquium on J.B. Say

Dates and location TBA

In December 1819 Jean-Baptiste Say was one of a group of political economists and businesspeople who founded “Ecole Spéciale de Commerce et d’Industrie”, in Paris. Their practical experience and commitment to liberal ideas established a new type of academic model, pioneering the modern business school. Over the last 200 years the school has undergone a number of innovations, most notably with the merger in 1999 with EAP to form a multi-campus model operating throughout Europe. Combining a European identity with a global perspective, ESCP Europe now stands as a triple accredited and highly ranked establishment. JB Say held the first Chair in Economics, and 200 years later this colloquium uses his intellectual legacy as the host for an appraisal of his ideas and influence. 

Attendance is strictly by invitation only. Suggestions/feedback welcome – please email me.

Main reading: Say, J.B., ([1803] 1855) A Treatise on Political Economy (translation of the 4th Edition) – print copy at Amazon, or see this free pdf, or Library of Economics and Liberty.

  • Session I. On theory and practice
  • Session II. Origins of entrepreneurship
  • Session III. Say’s Law: the origins
  • Session IV. Say’s Law: Keynes’ reading
  • Session V. Say’s Law: The generally accepted view
  • Session VI. Say’s Law: The resurrection

Colloquium on Sound Money

20th-21st November 2009, London

1.    What is Money?

  • Menger, Carl, 1976, “The Theory of Money” (Chapter 8, in Principles of Economics, p.257-286)
  • Salerno, Joseph T., 1987, “The “True” Money Supply: A Measure of the Supply of the Medium of Exchange in the U.S. economy” Austrian Economics Newsletter, Ludwig von Mises Institute
  • Shostak, Frank, 2000, “The Mystery of the Money Supply Definition” The Quarterly Journal of Austrian Economics, Vol. 3, No. 4, pp.69-76

2.    The Interest Rate and Intertemporal Coordination

  • Mises, Ludwig von, 1953 [1912], The Theory of Money and Credit Yale University Press (Excerpts: Chapter 19, pp.339-367)
  • Hayek, Friedrich A., 2008 [1931], Prices and Production Mises Institute (Excerpts: Lecture 2, pp. 223-252; Lecture 3, pp.253-276)
  • Sweeny, Joan and Richard James Sweeny.  1977, Monetary Theory and the Great Capitol Hill Baby Sitting Co-op Crisis: Comment, Journal of Money, Credit and Banking, Volume 9, Feb., pp. 886-89

3.    The Gold Standard and the Great Depression

  • Rothbard, Murray, 2005 [1963], What has government done to our money? Mises Institute (Excerpts: pp.159-170)
  • Reed, Lawrence, 2005, “Great Myths of the Great Depression” Mackinac Center for Public Policy
  • White, Lawrence H.  2008, “Is the Gold Standard Still the Gold Standard among Monetary Systems?” Cato Institute Briefing Papers, No. 100

4.    Deflation and Prosperity

  • Rothbard, Murray, 2005 [1962], The Case for a 100% Reserve Dollar Mises Institute (Excerpts: Chapter 10, pp.180-186)
  • Selgin, George, 1997, Less than Zero: The Case for a Falling Price Level in a Growing Economy Institute of Economic Affairs, Hobart Paper No. 132 (Excerpts: pp.9-41; 70-72)

5.    Free Banking vs 100% reserves

  • Mises, Ludwig von, 1953 [1912], “Peel’s Act” in The Theory of Money and Credit Yale University Press (Excerpts: Chapter 20, pp. 368-373)
  • White, Lawrence H. 2009 [1984], Free Banking in Britain: Theory, Experience, and Debate, 1800-1845, Institute of Economic Affairs (Excerpts: Chapter 5, pp.89-135)
  • Selgin, George, 1997, Less than Zero: The Case for a Falling Price Level in a Growing Economy” Institute of Economic Affairs, Hobart Paper No. 132 (Excerpts: pp. 67-69)
  • De Soto, Jesus Heurta, 2006, Money, Bank Credit and Economic Cycles Mises Institute (Excerpts: Chapter 8, pp.675-714)

6. Central banking

  • Smith, Vera, 1990 [1936], The Rationale of Central Banking, Liberty Fund (Excerpts Chapter XII, pp.167-196)
  • Hayek, Friedrich A., 1990, Denationalisation of Money – The Argument Refined, Institute of Economic Affairs, Hobart Paper Special, No. 70 (Excerpts: pp.23-28, 46-55, 130-131)
  • Congdon, Tim, 2009, Central Banking in a Free Society, Institute of Economic Affairs, Hobart Paper No. 166 (Excerpts Chapter 1, pp.34-43; Chapter 8, pp.178-189)

7.    Proposals for Reform

  • Salsman, Richard, 1990, Breaking the Banks, American Institute for Economic Research (Excerpts: Chapter IX, pp. 125-141)
  • De Soto, Jesus Heurta, 2006, Money, Bank Credit and Economic Cycles Mises Institute (Excerpts: Chapter 9, pp.736-787)
  • De Soto, Jesus Heurta, 2006, Money, Bank Credit and Economic Cycles Mises Institute (Excerpts: Chapter 9, pp.788-805)