Our Economy — Klas Eklund: COMPLETE

The book's bibliography, quoted openly: sixteen editions between 1987 and 2024, from Tidens förlag via Rabén Prisma and Norstedts to Studentlitteratur; over half a million copies sold; translated into Chinese (1989 and 1995) and Russian (1991 and 2004 — the Russian edition got the subtitle introduction to macroeconomics). According to Wikipedia, the first edition argued for a balanced welfare policy with increased market elements — in other words a book written inside the social democratic modernization's opinion work, in the Feldt era's Sweden where inflation was to be fought and the markets let into the welfare state.

Later editions became a more conventional textbook, level between upper secondary and university, with a relatively large element of personal portraits of the economists behind the theories — Smith, Ricardo, Marx, Keynes, Hayek, Friedman get faces. In 2024's sixteenth edition the book was tightened: 75 pages shorter, straighter chapter structure, less overlap — and a new concluding, forward-looking chapter on the future's economic challenges.

The book's architecture, which the course follows chapter by chapter. Part one: the individual market — microeconomics with demand, supply, price formation, market forms and the market's failures. Part two: the economy at large — macroeconomics with GDP, growth, business cycles, unemployment, money and inflation. Part three: the international economy and economic policy — trade, currencies, the EU, global capital markets, crises, development and climate.

Eklund's pedagogical signature is that the theories are presented as answers to real problems: mercantilism grew out of the trading states, Keynes out of the thirties' mass unemployment, monetarism out of the seventies' stagflation. In newer editions the financial crisis got an entire chapter of its own — Eklund writes himself on his website about how the crisis forced the rewrites and Keynes' return.

And why does a stock analyst read a textbook in national economics? Because AKM1's twenty variables do not fly freely: they float in macro air. The policy rate is the discount rate that compresses or expands V04–V06. Inflation squeezes or protects the margins in V07–V08 and erodes V12's stability. The GDP cycle turns the demand behind V01–V02, credit toward V10 and the issue risk in V19, and climate policy creates V18's regulatory catalysts. The book is therefore the course catalogue's RAM: the frame that holds the analysis upright when the news flow turns — and the controversy in chapter fifteen (Eklund against the neoliberal and Austrian schools) is the battle over what that frame should look like.

Note the balance already now: the book is written by a social democratic economist who loves markets — which makes it an unusually honest starting position for a controversy usually conducted between deaf ears.

The starting point is scarcity: human needs are unlimited, the resources are not — therefore every household, every company, every society is forced to choose, and every choice has an opportunity cost: the next best thing one forgoes. Eklund's second foundation stone is marginal thinking: decisions are not made between everything or nothing but at the margin — one more unit, one more krona, one more hour. The consumer buys until the utility of the last krona matches the price; the company produces until the marginal revenue matches the marginal cost.

It is exactly the same logic as AKM1's question of whether a company grows profitably: does V01's revenue growth drive growth in V08's EBITDA margin — or is that growth bought with discounts that eat the margin? One more customer at the price of profitability is not growth; it is charity.

Then the two curves. The demand curve slopes downward: higher price, lower quantity — and its slope is the elasticity, the course's most important concept. Elastic demand: small price change, large volume change — competed products with substitutes. Inelastic: the customers pay anyway — insulin, rent, spare parts, and subscription software with high switching costs. The supply curve slopes upward: a higher price brings forth more production.

Where the curves intersect lies the equilibrium price — and Eklund's review of shifts is the point: what happens when the curves move? A tax on the seller, technology that lowers the cost, income increases that raise demand — the market always finds a new equilibrium price, but the redistribution along the way is the concern of politics and of the portfolio.

Here the course's first straight AK1A bridge, with a nod to Hayek that the controversy chapter returns to: the price is information. The price gathers scattered knowledge about scarcity and demand that no single planner can compile — and on the stock market the multiples are information of the same kind: P/S (V04) tells how the market prices a krona of revenue, P/B (V05) how it prices book capital, EV/EBITDA (V06) how it prices operating profit.

When a multiple deviates from the sector's — do not first ask whether the market is wrong, ask what the market knows that your model misses: inelastic demand deserves a higher multiple than elastic. Microeconomics' elasticity doctrine is therefore not secondary-school maths — it is the theory behind why some companies deserve their multiple and others do not.