

Ask HN: Favorite Books or Articles about Economics? - tokenadult

I notice quite a few threads here with rather divergent opinions about economic theory, so I thought I'd ask the general question for all readers, what writings about economics do you recommend for a nonspecialist? I'm particularly eager to find readable basic expositions of economics that presuppose knowledge of calculus. One example I have found is<p>http://resolver.caltech.edu/CaltechBOOK:2005.002<p>and I would be happy to hear about more, as I haven't committed myself to any one approach to economics as I try to self-educate in that subject.
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nostrademons
Grab a good textbook or two. I learned mostly from Paul Samuelson for
microeconomics and Gregory Mankiw for macroeconomics. Other good sources:
Benjamin Graham's investing books, Warren Buffett's Berkshire Hathaway letters
from the chairman. If you want to understand anything about Keynesianism, I'd
suggest reading the original Keynes ( _The General Theory of Interest,
Employment, and Money_ ); almost everyone who writes stuff about Keynesianism
on the net doesn't understand it.

I'd be skeptical of almost every easily-understandable article you read on the
net. They always seem to fall into one of two categories:

a.) They're written by amateurs who don't really understand economics but
think they do. (This covers nearly everything on Reddit.)

b.) They're written by professionals who understand economics but are writing
for an audience that doesn't, and so they leave out crucial detail. (This
includes Krugman's columns and most econ blogs.)

Expect to pay money; it's not like computer science, where nearly all the good
stuff is available for free on the net. You don't need to pay a lot of money
though; my dad picked up Samuelson's textbook for me for $5 at a flea market
in Harvard Square. And unless you've got a really good professor, textbooks
are just as good as courses.

~~~
vitaminj
I confess that I still haven't read all of General Theory (it's sitting on my
to-finish bookshelf), but I really found it quite turgid and wouldn't
recommend it to anyone without some economics background (not least because
it'll put you to sleep). Besides, most of the standard formulations of Keynes'
work were done by other people, eg. Hicks-Hansen put together the IS-LM model
based on Keynes ramblings.

On a scale of turgidity, the General Theory is on a par with "The Road to
Serfdom" by Keynes' contemporary nemesis Friedrich von Hayek. I willed my way
through that one, but a 10 page cliff's notes version would probably have
sufficed. On the other hand, Milton Friedman's works are actually pretty good
reads (despite my reservations about some of his thought).

~~~
nostrademons
I would definitely recommend _starting_ with some other text. I agree with
everything you said about its turgidity.

However, I really think people should make their way through it anyway. Part
of this is because most intro textbooks seem to gloss over it: I remember
suddenly finding myself studying aggregate supply and aggregate demand in my
intro macro course, and thinking "Wait...this doesn't make any sense. It's not
at all like the equilibrium models we were just doing. And it directly
contradicts what we were just taught about the interest rate being the
equilibrium price in the loanable funds market." I can only speak to Mankiw's
textbook, but the presentation seemed very disconnected.

The other reason I think people should read it is that there's a very
widespread tendency in Internet discussions for people to say "Those dumbass
Keynesians. They didn't get anything right" and then discount _everything_ in
the theory. But their arguments are usually based on a misunderstanding of
what Keynes was really saying, and he has rebuttals and justifications _in the
book_ that would make you think a little harder about what you're trying to
discredit.

I view Keynes as being a lot like Newtonian physics. There're edge cases where
it's wrong; you certainly can't take it as a universal rule. But his basic
insights were mostly right, and you need to understand them to understand the
more precise models that came later.

~~~
vitaminj
That's exactly what I don't like about Mankiw's book, it's a bit all over the
shop. I prefer Olivier Blanchard's book, which sacrifices some completeness
for clarity - he makes it very clear that IS/LM is a short run model, AS/AD is
a medium run model and Solow-Swan is a long run model. In fact, the book is
presented in that sequence.

In Mankiw's book, Solow-Swan is presented before AS/AD. Mundell-Fleming's open
economy model is tucked somewhere in the middle too, which I think should be
presented as an extension once the core short, medium and long run models have
been established. It was hard enough for me to get my head around price
expectations and the AS/AD curves, much less doing it out of the natural
sequence.

------
vitaminj
I found out that I liked economics shortly after I graduated from engineering,
before which I had a completely skewed and cynical view of economics and
economists, informed mainly by writers of left-wing books (who generally
aren't economists). Fancying myself as a bit of an auto-didact, I tried to
self educate. I bought textbooks, read articles from the net, read blogs, etc.

But if you're anything like me, then you will skip over all the boring
fundamentals and read the more advanced, but interesting sections. Economic
literature is written in such a way that the literate layman can be fooled
into thinking he understands the material. There are specific terms used by
economists (eg. economic profit) that has an entirely different definition
than the common one (eg. economic profit takes into account opportunity
costs). So I'd be reading these articles thinking that I'm getting it, but
really I was missing 50-80% of what the guy was trying to get at, because I
just had no idea or training in economic thought.

I spent 5 years doing this. There was no watershed moment where I realised
this was the wrong way to go about it. Ironically I actually became so
interested in economics that I enrolled in a graduate diploma 2 years ago
(which is essentially an undergraduate economics degree for people with a
degree in something else).

In my first semester, I had to correct a shitload of misconceptions that I'd
harbored over the years. It was like doing double the work - challenging the
material presented against my ill-informed positions, then fact checking and
reasoning out which was correct. I was wrong most of the time, but there are
positions that I still hold that university economics hasn't beaten out of me
(like infant industry protection - for some reason uni economists are all
staunchly pro-free trade, and they really only gloss over the alternatives).

So 2 years on (and 1 year to go), I feel that I'm in a position to offer some
advice about learning (mainstream) economics. If you go the self-learning
route:

1) Make sure you get a good grounding on the fundamentals of micro and macro.
Any uni textbook is probably okay... that free Intro to Economic Analysis book
is pretty good (I used it as a second textbook for my intermediate micro
class). But the bottom line is read EVERYTHING and don't skip stuff because
it's boring. They are often the most important parts...

2) A decent book for a general audience is "Economics in One Lesson" by
Hazlitt. If you don't know what opportunity cost is, then you'll never forget
after he's drilled it into your head a thousand times.

3) If you're serious about learning econs, I'd steer clear of popular books
like Freakonomics and the Logic of Life. They're fun and enjoyable to read,
but not particularly rigorous and occasionally quite dodgy.

------
zupatol
I studied economics, but I never had the feeling of understanding much about
the economy. Most of economics, including microeconomics and macroeconomics
always seemed to me completely detached from reality. Theories for developing
poor countries seem to follow fashions that change every ten years. But there
are a few topics where I felt the knowledge was interesting and relevant. This
was 15 years ago and in german, but I'll try to find the right words in
english.

National accounting: how gross domestic product, the balance of payments
etc... are calculated.

The creation of money: how central banks create money and control inflation.
This is probably the only theory on which all, well most, economists agree.

Economic history: this is the most down to earth subject, the one that relies
most on evidence. It's where you will find accounts about industrialization
and crashes that micro- and macroeconomics almost never consider, because
they're too busy dreaming about equilibriums.

History of economic theory: For every topic there are a thousand contradicting
opinions. It's dismaying if you want to find an answer to a question, but it's
fascinating if you look at it like a history of thought. Then it becomes
interesting in the same way as philosophy.

Finance: the rocket science behind valuing options, exotic financial products,
Black, Scholes and Merton's nobel prize and the crash of LTCM. This looks like
hard science, there's a lot of math, but it all rests on shaky assumptions. If
a model gives you a different value than the market, it's more likely you
found a flawed model than a mispriced security. Here I actually have a very
readable book to recommend: Capital ideas, by Peter Bernstein.

And last but not least, one of the most enlightening sources, although
systematically biased in favour of free markets and international trade: the
economist, I mean the magazine.

------
billturner
Free, updated ebook called "Introduction to Economic Analysis":
<http://www.introecon.com/> (subtitled "The Open Source Introduction to
Microeconomics")

Haven't had the chance to read it, but I've heard great things. I think I may
have even got the link to it here on HN.

~~~
tokenadult
Thanks. The book you mention is the same book by the same author as mentioned
in my thread-opening post. I'll have to check which version gets the most
updating attention.

