Econ & Trading

Economics & Trading: A Self-Learner's Encyclopedia

A 6-volume foundational learning resource produced by parallel deep-research agents (May 2026). Total length ~135,000 words. All mathematics is presented at basic-algebra level in the body; advanced math (calculus, linear algebra, stochastic calculus, dynamic programming) is identified, named, and pointed at — never derived in line.

Scope and design

These reports were commissioned together as a single learning resource for a highly capable self-learner with no formal economics background. The goal is depth and current-frontier accuracy without sacrificing accessibility. Each report is encyclopedic in length (20k–30k words), heavily cited (primary sources preferred — Fed/IMF/BIS working papers, top-five journals, NBER, central-bank speeches, respected research blogs), and contains its own self-contained glossary appendix.

Recency policy applied throughout: foundational classics where seminal (Smith, Keynes, Friedman, Markowitz, Black-Scholes, Fama, Lucas, etc.) plus heavy emphasis on 2021–2026 research, moderate weight on 2016–2020 (post-GFC consensus rebuild, ML-era trading), and important post-2008-recovery theory where it underpins live debates.

Math policy: every report has a consolidated "Mathematical foundations" section using only algebra. Where a topic genuinely needs advanced math (e.g., Black-Scholes derivation, HANK steady states, sequence-space Jacobians, mechanism design with continuous types), the equation is stated, the math prerequisites are named (e.g., "needs stochastic calculus and PDEs"), and a reference is provided — but the math itself is not taught.

Suggested reading order

For a first pass building up from foundations, read in this order:

# Report Words Why read here
1 Economic Theory and History ~20,020 Establishes the schools-of-thought lineage and the canonical figures and ideas every subsequent report references. Read first.
2 State-of-the-Art Microeconomics (2024–2026) ~21,647 Micro is the bottom-up half of economics and the bedrock for understanding individual incentives, market design, and the credibility revolution that shapes how modern econ is done.
3 State-of-the-Art Macroeconomics (2024–2026) ~20,573 Top-down half — monetary, fiscal, growth, inflation, balance-sheet policy. Builds on a few micro concepts (utility, MPC) from Report 03.
4 The Intermingling of Micro and Macro ~21,628 Synthesis bridge. Read after both 02 and 03; it explains how the modern micro-macro fusion (HANK, granularity, sequence-space) actually works.
5 Trading: Traditional Theory, Modern Practice, SOTA Frontier ~20,581 Markets and trading — MPT, CAPM, Black-Scholes, factor models, microstructure, HFT, ML/RL strategies, crypto/DeFi. Largely self-contained but uses the present-value, Fisher, and quantity-theory algebra from Report 01.
6 Unified Plain-English Glossary ~31,014 The master lookup reference. ~570 entries spanning micro, macro, trading, and cross-cutting terms — with explicit cross-domain disambiguation for terms that mean different things in different fields (e.g., beta, alpha, leverage, premium, basis, discount). Keep open in a second tab while reading 1–5.

Alternative reading paths

If your main interest is trading and markets: 5 → 1 (selectively, especially the marginalist revolution, Keynes, Minsky sections) → 2 (monetary policy & balance-sheet sections) → 6 as reference.

If your main interest is policy / macroeconomics: 1 → 2 → 4 → relevant parts of 3 (causal inference, labor monopsony, public economics) → 6.

If your main interest is economic research methodology: 1 (methodology evolution section) → 3 (credibility revolution sections) → 4 (identified moments, Mian-Sufi, Chodorow-Reich) → relevant glossary entries.

If you want a fast orientation before deep reading: read the Executive summary and Key findings sections of all six reports first (~1–2 hours). That gives you the headline arguments of each and helps you decide where to invest the deep-read time.

Key insights pulled across the series

A few cross-cutting takeaways the writers flagged that are worth seeing up front:

  1. The credibility revolution is methodologically as important as rational expectations was. Modern empirical economics is now design-based (RDD, DiD, IV, synthetic control, RCTs). Card-Angrist-Imbens received the 2021 Nobel for this. The implications cut across micro, macro, and the bridge between them (Reports 01, 03, 04).
  2. HANK reframed monetary policy. In representative-agent New Keynesian models, the Euler equation does ~95% of monetary transmission; with heterogeneous households (Kaplan-Moll-Violante 2018), the indirect labor-demand channel does ~80%. This is a quantitative reversal that changes how central banks should think about what they're doing (Reports 02, 04).
  3. Granularity broke the law-of-large-numbers shortcut macro used for 70 years. Gabaix (2011) showed that with fat-tailed firm size distributions, idiosyncratic firm-level shocks don't wash out in aggregation — Apple, Walmart, and Exxon are macroeconomic events. Supply-chain propagation (Acemoglu et al., Baqaee-Farhi) extends this (Report 04).
  4. The Phillips curve is nonlinear, not dead. The post-2021 inflation episode + 2022–2024 disinflation broke the pre-COVID NK consensus. Active debate: Hazell-Herreño-Nakamura-Steinsson flat-curve vs Benigno-Eggertsson "slanted-L" (Report 02).
  5. The factor zoo is mostly false discoveries. Of 316 published equity-return anomalies, most fail Harvey-Liu-Zhu's t-stat hurdle of 3.0; quant practice now treats deflated Sharpe and combinatorial purged cross-validation (Lopez de Prado) as table stakes (Report 05).
  6. The Piketty-Saez-Zucman vs Auten-Splinter inequality dispute is unresolved. Same underlying tax data, opposite stories on top-1% trends — hinges on how underreported income is imputed (Report 03).
  7. 2024–2026 antitrust split 2-1 against Big Tech. Google liable on search monopolization (Aug 2024); Amazon case proceeds; Meta wins on broad market definition (Nov 2025). The economics of attention and platform regulation is in active flux (Report 03).
  8. 0DTE options crossed 50% of SPX option volume in 2024. Intraday dealer-gamma positioning is now a baseline macro variable. The market-structure consequences are an active research and regulatory frontier (Report 05).
  9. The Fed abandoned FAIT in 2025; the BoJ exited YCC in March 2024. Two of the most significant monetary-framework changes in decades, both during the writing window of this series (Report 02).
  10. MEV has matured into a serious topic. PBS, MEV-Boost, builder/proposer separation, and order-flow auctions are now well-developed — the on-chain analogs to traditional latency arbitrage and order-flow internalization (Report 05).

How to use the glossary

The glossary (06-unified-glossary.md) is organized by domain (micro, macro, trading, multi-domain) with alphabetical ordering inside each. Use the cross-domain disambiguation entries for any term that gives you confusion across reports — most common pitfalls:

  • alpha: Cobb-Douglas capital share (macro) vs CAPM/factor intercept (trading) vs practitioner "any excess return" (trading)
  • beta: CAPM/factor sensitivity (trading) vs discount factor in DSGE (macro) vs regression slope (statistics)
  • leverage: corporate D/E (corp finance) vs bank regulatory ratios (macro/regulation) vs hedge-fund gross/net (trading) vs derivative notional/margin (trading)
  • basis: futures minus spot (trading) vs related-instrument spread (trading) vs basis point = 0.01% (everywhere)
  • premium: option price (trading) vs equity risk premium (asset pricing) vs term premium (macro) vs credit premium (fixed income) vs ETF-to-NAV (trading)
  • discount: Fed discount rate (monetary) vs DCF discount rate (corp finance) vs bond trading below par (fixed income)
  • π (symbol): inflation (macro) vs profit (micro)
  • σ (symbol): standard deviation/volatility (trading/stats) vs elasticity of intertemporal substitution (macro)

Provenance and limitations

  • Reports were produced 2026-05-26 by six parallel opus-class research agents, each running the deep-research multi-pass workflow (broad discovery → primary sourcing → contradiction hunting → freshness check → write-up).
  • Each agent maintained its own evidence ledger and cited inline. Source inventories are at the end of each report.
  • All web sources are treated as untrusted; agents verified important claims against primary documents where feasible.
  • Live policy artifacts (specific FOMC statements, exact dollar figures of QT runoff, mid-2026 court rulings) may be stale relative to current state; verify time-sensitive policy facts against primary sources before relying on them.
  • Mathematical derivations beyond basic algebra are intentionally not provided; pointers to study material are included where needed.
  • Sourcing was thinner in a few areas flagged by individual agents:
    • Pre-classical history of thought (scholastics, Ibn Khaldun, non-European traditions) — Report 01
    • Some 2025–2026 NBER papers were referenced from search snippets rather than direct PDFs — Report 03
    • CBDC research and detailed shadow-banking material — Report 02 (intentionally compressed)
    • Cross-border regulatory specifics (MAS, HKMA, MiFID III) — Report 05

Directory layout

output/
├── 00-index.md                              ← this file
├── 01-economic-theory-and-history.md        ← ~20k words
├── 02-macroeconomics-sota.md                ← ~21k words
├── 03-microeconomics-sota.md                ← ~22k words
├── 04-micro-macro-intermingling.md          ← ~22k words
├── 05-trading-theory-and-practice.md        ← ~21k words
└── 06-unified-glossary.md                   ← ~31k words, ~570 entries