What to look for when calculating economies



Written by By Alice Baghdjian, CNN

Economist Thorsten Schumacher uses charts in his new book, “Cosmicomics” to give a quick overview of events taking place across the world.

He explained his choice of charts: “These charts are used to understand the ‘elevation of affairs’ within the realms of economics. It might be called ‘cosmic economics.’

“The standard charts — for example GDP — are easily dismissed; everybody knows what the GDP means.”

Throughout his book, he uses numbered diagrams and notes to show the top-down and bottom-up effects of an event, such as protests, earthquakes or waves in the ocean.

“Looking at the volume of the world’s geological history, I can see that we are living in a very interesting time, as we see how all the natural catastrophe have risen in the 1960s,” he said.

“Are these coincidental or does this signify a more organized current change in the natural world? One explanation could be that these developments can be due to a gradual elimination of the time dimension of Earth, as we saw more and more signs of an invisible black energy in the 17th century.”

He added that he “had to explain the relationship between bubbles and earthquakes” and show the “breakdown of global stock markets in the 2008 crash.”

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Earlier in the year, the economist told CNN that science is “not about the supernatural.”

“In general I hope people understand that a lot of things happen in life that we cannot predict,” he said.

According to the Chart Hunting Companion on Amazon, the distinction between science and science fiction has been relatively unimportant in the pursuit of first concepts and titles in narrative literature.

But the conventions of fantasy continue to shape the mainstream.

“The main difference between science fiction and science fact is that science fiction focuses on philosophical theories, while science fact tends to focus on the scientific facts,” it says.

The book charts the increase of interest in Elon Musk — he shares something in common with Canadian physicist Stephen Hawking.

“SpaceX and Tesla are creating the future, and Elon Musk is in the mix. Caught in the race for bringing space to Earth’s doorstep — from an economic, scientific, and world perspective – SpaceX, Tesla, and Musk are generating massive job creation, at the same time as they generate income, and contribute to the GDP.”

He’s also keen to point out some historical ironies: “In the Nordic countries, the roads of the 20th century were paved in solid gold. In addition to the citizens who owned cars, the government funded this public transport system by financing deposits in banks.

“This worked very well in the 50s and 60s. But today, nearly three-quarters of the Finns still walk to work, with the result that the roads are in the shape of craters, which cannot be rented out for rental apartments.

“And speaking of ‘loans,’ it’s also important to point out the astounding importance of derivatives, as they helped the hedge funds to monetize subprime mortgages and collateralized debt obligations, which were not good for the economy and with which they caused the financial crisis of 2008.”

The author said that the card-stock charts, too, had important practical applications.

“When I was working at McKinsey, I couldn’t find a clear way to describe what was happening on a given day. In that case, I left McKinsey and decided to continue the work without any intellectual specifications,” he said.

“Now, more than a decade later, when I find myself in the midst of a certain event, I try to orient myself, and use the graphs.”

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