Ask HN: Favorite Books or Articles about Economics?
http://resolver.caltech.edu/CaltechBOOK:2005.002
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.
http://resolver.caltech.edu/CaltechBOOK:2005.002
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.
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.
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).
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.
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.
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.
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.
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.