
Six big economic ideas [pdf] - denzil_correa
http://www.economist.com/sites/default/files/econbriefs.pdf?fsrc=scn/fb/te/bl/ed/
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eternauta3k
If this sparks your interest in economics, I highly recommend looking at
Econtalk:
[http://www.econtalk.org/archives.html](http://www.econtalk.org/archives.html)

I love the episodes with Mike Munger, because they usually cover basic
economic concepts (and also Mike has a great rapport with the host Russ).

~~~
perseusprime11
Econtalk looks like a real gem. What other podcasts are out there?

~~~
zachberger
Are you specifically looking for other econ podcasts or podcasts in general?

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perseusprime11
Nothing in general. It could be science, technology or anything that is
interesting.

~~~
travmatt
I'm a _huge_ fan of podcasts, and I have a strong bias towards Informationally
dense shows dealing with Politics, technology, and sciences.

Common Sense with Dan Carlin - I think he may be the most underrated and most
prescient political commentator of our times.

Econtalk - for the high bar of intellectual honesty of its host.

Waking Up with Sam Harris - a little of everything.

BhTV the Glenn Show - hosted by an African American economist , probably the
leading commentary on race relations in the USA today.

The Tim Ferriss Show - excellent interviewer and some truly remarkable guests.

Risky Business - information security reporting by a truly excellent and
knowledgeable journalist.

Congressional Dish - reads and provides background on legislation currently
proposed in congress. Will give you a very solid understanding of many current
topics (her work in reading through TPP, CISA and other bills is fantastic).

Slate's Whistlestop - stories of famous moments in American presidential
campaigns.

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thr0waway1239
Thomas Sowell [1], an almost-published novelist turned hard core economist
(i.e. got his Ph.D. in Economics) is one of the best writers of economics
books, many having a libertarian slant.

I recommend the following books especially - 1. Basic Economics 2. Applied
Economics and 3. Knowledge and decisions.

He also produced a crazy detailed trilogy about culture and has written an
autobiography which might read a bit like the written version of Mad Men. He
often remarks that he is 1/3rd as old as America itself.

And even if you end up completely disagreeing with his opinions, it is worth
it to check out at least one of his works to see that it is possible to write
economics books which are not utterly boring.

[1] After 9/11, he turned into a slightly loony war hawk. But his best work
was produced before that.

~~~
RodericDay
I read Sowell's "Economics in One Lesson" and recommend against it. It's
basically a libertarian promotional pamphlet. If one wants an economic
education, something like "The Undercover Economist" is much better.

edit: oops, I definitely mixed Sowell and Hazlitt up. Leaving this up anyway,
so that the replies make sense. Sorry!

~~~
jnordwick
Even UC Berkeley, not exactly known as being a libertarian stronghold used
Economics in One Lesson when I went there. I wouldn't exactly throw it away
just because you don't agree with it.

~~~
nl
I think the parent poster is misremembering. _Economics in One Lesson_ isn't
by Thomas Sowell. Not sure it should be characterized as a libertarian
textbook either - most would class it as coming from the school of classical
economics.

[http://delong.typepad.com/sdj/2005/04/economics_in_on.html](http://delong.typepad.com/sdj/2005/04/economics_in_on.html)
is worth reading.

~~~
jnordwick
I can't believe that Delong actually approves (at least partially) of EiOL.
I'm shocked!

The libertarial, classical, and supply-side ideas can all be very close to
each other but often come at them from different directions.

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thr0waway1239
We could create 6 TLDR threads for the 6 ideas so we could discuss them in
their own branches. Any TLDR volunteers? :-)

~~~
Kiro
Would prefer someone did a tl;dr right here.

~~~
unusximmortalis
+1

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nl
If you want to read one of these, read the Hyman Minsky one. Minsky spent his
career explaining the 2008 financial crisis, even though he died in 1996.

Libertarian will hate him (he supported Keynesian economic intervention) and
yet neo-Keynesians will hate him too (he thought Hicks–Hansen model was
oversimplified to the point it wasn't worth using).

But his predictions came true. That's pretty rare in economics, so people were
forced to pay attention.

~~~
brokencode
I think in economics when somebody claims that their "predictions came true",
it's usually due to luck and not the merits of their theory. You need decades
of statistical evidence to support an economic theory, not the events of a few
years.

~~~
dredmorbius
In economics, timing of predictions matters far less than mechanism. Minsky
offers a predictive _mechanism_ few others in economics provide. I'm not
entirely familiar with it, though he has some strong proponents, most notably
Australian (not "Austrian") economist Steve Keen.

To give an example from elsewhere in the field, I find Solow's growth model to
be vastly inferior to that proposed by R.U. Ayres, in that Ayres considers
energy as an input, whilst Solow concocts "technological improvement" out of
the residual of labour and capital inputs. For both causal and theoretical
bases, the Ayres result (replicated by many others) strikes me as far more
convincing.

Much of orthodox economics disagrees.

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rer
Can anyone summarize these six big economic ideas?

~~~
1wd
1\. Akerlof’s information asymmetry: Sellers must use signalling to inform
buyers of their product's high quality.

2\. Minsky's financial instability hypothesis: Stability makes even high risk
debt attractive which leads to a crisis of instability, a "Minsky moment".

3\. Stolper-Samuelson theorem: Abolishing tariffs in favor of free trade with
low-wage nations can hurt workers in high-wage nations, even when the high-
wage nation benefits overall.

4\. Keynes' fiscal stimulus and multipliers: Every government dollar spent
stimulates the economy multiple times, by subsequently being spent by the
recipients.

5\. Nash equilibrium, game theory and the prisoner dilemma: Rational actors
make choices based on what they think other actors will do. This leads to
stable but sometimes sub-optimal scenarios.

6\. Mundell-Fleming trilemma: Pick two: Fixed exchange rate, monetary autonomy
or free flow of capital. You can't have all three.

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neom
Seeing as this has turned into book club. Highly recommend two books, neither
of them are pure economics, however combined they give a fascinating overview
of the last 70 years of the american economy, as well as some really
interesting ideas for what the future might look like:

Makers and Takers: The Rise of Finance and the Fall of American Business
Hardcover – May 17, 2016 by Rana Foroohar (Author)

Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter,
Greener, Healthier, and Happier Paperback – January 31, 2012 by Edward Glaeser
(Author)

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zumu
I am admittedly woefully uninformed about the topic, but why is it discussions
of economics seem so much more verbose than those of math and science? Perhaps
it's just this article, but all this flowery language and backstory should be
optional.

~~~
tpeo
Well, I don't know how much uninformed about economics you actually are, but I
think that at least part of this perceived verbosity is due to you being
acquainted with it through stuff aimed at lay people. The Economist is a sort
of popular economics reporting magazine (a "pop-econ" magazine). The stuff
they write is aimed at a general audience.

Though admittedly economic articles are do seem verbose when compared with
math or physics articles. But there's a lot of variance in their verbosity,
too: theoretical articles are pretty much just math. Empirical guys on the
other hand are always somewhat verbose, as they like having some plausible
stories behind the mechanisms they're testing or to explain why their
instrumental variable is exogenous. The literature of subfields are/were
almost entirely verbose, such as in the case of the old institutional
economics.

I'd say that it all boils down to: how wide the intended audience is; how
established is a field or subfield is; how do new articles fit in with the
older literature. When all you've got in your head is some hazy philosophical
point, trying to formalize it from the outset will probably just alienate you
from the discipline. So older literature will be, on average, more verbose
than current literature. On the other hand, if all people do is point out more
and more new issues, and if every new article is "orthogonal" to each other,
they might never produce a succint framework (in which case it all turns into
philosophy). And this goes for other fields too: mathematics was a verbose
field too until some of it's ideas became common sense, and so was physics.
Economics is still undergoing a lot of changes, and will probably undergo a
lot more as economists focus themselves on narrower issues and as more data is
collected.

~~~
barrkel
The Economist is a world current affairs magazine with a slant towards
business. It's not really about economics in the way the term is understood as
an academic discipline.

