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Business & EconomicsCourse 01

How the Economic Machine Works

Ray Dalio's simple template for the economy, transactions, credit, and three big forces, turned into things you can drag and test.

Foundations~12 minAfter Ray Dalio
TransactionsCreditDebt cyclesProductivity
Based on Ray Dalio's “How the Economic Machine Works” (30 min)
Step 01The big idea

The economy works like a simple machine.

It looks complicated, but it's built from a few simple parts and a huge number of simple transactions repeated over and over.

In this course we'll build the machine up piece by piece: start with a single transaction, add credit, and then watch three forces combine, productivity growth, the short-term debt cycle, and the long-term debt cycle.

Most of the charts here are interactive. Drag the sliders and try to break them, that's how the intuition sticks.