Macro is hard; here is an attempt to make it easier. I will try to explain as much of macroeconomics as possible with a single graph. Dynamic AS/AD is pretty good, but I think we can do some interesting things by turning to portfolio theory. Macro is and always has been about investment. Keynes noted that investment is much more volatile than consumption, which is why his consumption function has a positive intercept and a slope of less than 1. So to explain macroeconomic fluctuations, we have to explain investment.

## How much macro can you explain in one graph?

## How much macro can you explain in one graph?

## How much macro can you explain in one graph?

Macro is hard; here is an attempt to make it easier. I will try to explain as much of macroeconomics as possible with a single graph. Dynamic AS/AD is pretty good, but I think we can do some interesting things by turning to portfolio theory. Macro is and always has been about investment. Keynes noted that investment is much more volatile than consumption, which is why his consumption function has a positive intercept and a slope of less than 1. So to explain macroeconomic fluctuations, we have to explain investment.