Ray Dalio's How The Economic Machine Works

Ray Dalio is the founder a Bridgewater Associates, the world's largest hedge fund management by assets under management. He is also a greater teacher. 

I recommend every student to watch his wonderful video of "How the Economic Machine Works". 

The model illustrates how the economy works based a simple, elegant and yet powerful model describing how K waves may actually be explained by the interaction of real productivity growth (GDP/capita) and the debt cycle. 

Productivity growth trends would echo the work of Schumpeter, who sought in the study of major technological innovations the root causes of each Kondratieff cycles, in what he famously dubbed a process of creative destruction. 

The use of credit as the main funding mechanism of the economic/capital growth cycle is then added to mix, thereby illustrating how long term debt cycles are punctuated by shorter ones and contribute to the accumulation and then misallocation of capital that ultimately complete the cycle with a major debt crisis. His latest book does provide a good complementary reading.

The model is both elegant and simple. When looked at conjunction with its All weather portfolio, it does also implicitly illustrate that most asset class behaviour would be easily understood along a simple cycle looking at real GDP growth and inflation. 

https://www.youtube.com/watch?v=PHe0bXAIuk0