4 ms·

Ask HN: Getting a grip on economics

4 points by nopassrecover 17y ago

I find my economics knowledge is typically deficient. Likewise I find every little bit of economics I learn is helpful. Can you recommend sources that can help build a basic mental model of economics for someone with more of a coding background?

dantheman 17y ago
* Economics in One Lesson by Hazlitt * Man, Economy, and State by Rothbard * Road to Serfdom by Hayek * Capitalism and Freedom by Freedman * Anarchy, State, and Utopia by Nozick (politics/philosophy, but a great book) * What has the government done to our money by Rothbard (http://mises.org/money.asp http://mises.org/money.asp)
nopassrecover 17y ago
I should mention that so far i've found The Wealth of Nations (Adam Smith) and this blog (http://unqualified-reservations.blogspot.com http://unqualified-reservations.blogspot.com) have built up an idea of classic economics and hinted at Austrian economics. I'm still having trouble understanding some of the macro stuff like foreign currency reserves, printing money, inflation + employment etc.
- hga 17y ago
  Heh, "having trouble understanding some of the macro stuff like foreign currency reserves, printing money, inflation + employment etc." shows that you've learned enough to be as confused as any honest person is about these fields, e.g.: The Phillips Curve postulated there was an inverse relationship between inflation and employment (e.g. one aspect was that as labor got tight, it cost more to hire people and that lead to inflation). It was utterly destroyed by the stagflation of the '70s where we got both high inflation and unemployement, but it's still the law of the land in the US (http://en.wikipedia.org/wiki/Humphrey-Hawkins_Full_Employment_Act http://en.wikipedia.org/wiki/Humphrey-Hawkins_Full_Employmen...). I prefer the explanation that you get inflation by "printing money", but as we and e.g. the Japanease in the last two "lost decades" show, it's not that simple: this is confounded by the velocity of money as the high level concept and at the low level is expressed as the futility of "pushing on a string" (e.g. "dropping money from helicopters" as the current Chairman of the Fed puts it does little good if people are afraid to borrow or lend). Macroeconomics is a wild blood sport where no one is really sure of their view of The Truth.
- linhir 17y ago
  You might want to try David Romer's Advanced Macroeconomics (a higher level undergrad text) or Acemoglu's Introduction to Modern Economic Growth (lower level grad text). From http://ocw.mit.edu/OcwWeb/Economics/14-452Spring-2007/Syllabus/index.htm http://ocw.mit.edu/OcwWeb/Economics/14-452Spring-2007/Syllab... : Macroeconomics is a rapidly changing field. To get a sense of the geography, you might find it useful to read two surveys (which are already on the verge of obsolescence...): Blanchard, O. "What Do We Know About Macroeconomics that Fisher and Wicksell Did Not?" Quarterly Journal of Economics 115, no. 4 (November 2000): 1375-1410. Woodford, M. "Revolution and Evolution in Twentieth-Century Macroeconomics." June 1999. Paper presented at Frontiers of the Mind in the Twenty-First Century, U.S. Library of Congress, Washington, DC, June 1999. For two more recent and more polemical, pieces, you may also want to read: Chari, V. V. "Modern Macroeconomics in Practice: How Theory is Shaping Policy." Journal of Economic Perspectives 20, no. 4 (2006): 3-28. Mankiw, N. G. "The Macroeconomist as Scientist and Engineer." Journal of Economic Perspectives 20, no. 4 (2006): 29-46.
hga 17y ago
Economics in One Easy Lesson by Henry Hazlitt. A set of short "lessons", starting with the Broken Window Fallacy. No special background required so it should work for someone with "a coding background". http://www.amazon.com/Economics-One-Lesson-50th-Anniversary/dp/0930073193/ http://www.amazon.com/Economics-One-Lesson-50th-Anniversary/.... There's an old 1948/52? edition available as a scanned PDF which can give you an idea if you want to buy the updated version: http://www.fee.org/pdf/books/Economics_in_one_lesson.pdf http://www.fee.org/pdf/books/Economics_in_one_lesson.pdf. At a higher level, The Road to Serfdom by Friedrich von Hayek is also short but unlike the above quite dense. Most useful (to me) for applying information theory to command economies. Rather apropos to the situation in the US today, it was published in 1944 and dedicated to "The socialists of all parties". It was intended as a warning to the British socialists of the day who were about to take over and remake their country, warning them of a variety of things, some of which they found out the hard way, plus the demonstrable even back then danger of concentrating so much power at the top (too easy for idiot thugs to take over, e.g. Stalin, "Those who are good at acquiring and exercising discretionary powers in government are usually the most ruthless and corrupt individuals." (Wikipedia)). http://www.amazon.com/Road-Serfdom-Fiftieth-Anniversary/dp/0226320618/ http://www.amazon.com/Road-Serfdom-Fiftieth-Anniversary/dp/0... Check out http://en.wikipedia.org/wiki/The_Road_to_Serfdom#External_links http://en.wikipedia.org/wiki/The_Road_to_Serfdom#External_li... for the Reader's Digest condensed version (Hayek was amazed at how good it was) and there's even a cartoon version that I reviewed and found to be quite good. After the above two you'll be oriented for a variety of much larger tomes, from the classic The Wealth of Nations to e.g. von Mesis' Human Action.
linhir 17y ago
Greg Mankiw wrote years ago on his blog a good list of introductory high level econ books: A student emails me asking for a summer reading list. Here are ten very different books I like that are fun enough that you would not be embarrassed (well, not too embarrassed) reading them at the beach: Milton Friedman, Capitalism and Freedom Robert Heilbroner, The Worldly Philosophers Paul Krugman, Peddling Prosperity Steven Landsburg, The Armchair Economist P.J. O'Rourke, Eat the Rich Burton Malkiel, A Random Walk Down Wall Street Avinash Dixit and Barry Nalebuff, Thinking Strategically Steven Levitt and Stephen Dubner, Freakonomics John McMillan, Reinventing the Bazaar William Breit and Barry T. Hirsch, Lives of the Laureates I'd also recommend a good textbook, if you're a little more serious.
MaysonL 17y ago
A few books I've found extremely helpful for thinking about these things. Jane Jacobs on cities as the economic entities that really matter: The Death and Life of Great American Cities, The Economy of Cities, and Cities and the Wealth of Nations. Peter Drucker: Entrepreneurship and Innovation. and the classic textbook: Paul Samuelson: Economics
billswift 17y ago
"Basic Economics" by Thomas Sowell is the easiest to read, accurate introduction I have read. "Hidden Order: The Economics of Everyday Life" by David Friedman requires a little more work. Several previous commentors have recommended Hayek's "Road to Freedom", but I think his last book, "The Fatal Conceit" covers more or less the same ground and is easier to read. "Software As Capital" by Howard Baetjer, Jr is interesting, but I wish he had discussed open source in it, since his analysis contradicts most open source theories and practice. A good Engineering Economics text may be useful. And I second the other commentors who suggested Jane Jacobs's "Economics of Cities" and "Cities and the Wealth of Nations" and O'Rourke's "Eat the Rich", his "On the Wealth of Nations", an analysis of Adam Smith's classic is also worth reading.

4 points by nopassrecover 17y ago

dantheman 17y ago

* Economics in One Lesson by Hazlitt * Man, Economy, and State by Rothbard * Road to Serfdom by Hayek * Capitalism and Freedom by Freedman * Anarchy, State, and Utopia by Nozick (politics/philosophy, but a great book) * What has the government done to our money by Rothbard (http://mises.org/money.asp http://mises.org/money.asp)

nopassrecover 17y ago

I should mention that so far i've found The Wealth of Nations (Adam Smith) and this blog (http://unqualified-reservations.blogspot.com http://unqualified-reservations.blogspot.com) have built up an idea of classic economics and hinted at Austrian economics. I'm still having trouble understanding some of the macro stuff like foreign currency reserves, printing money, inflation + employment etc.

hga 17y ago
Heh, "having trouble understanding some of the macro stuff like foreign currency reserves, printing money, inflation + employment etc." shows that you've learned enough to be as confused as any honest person is about these fields, e.g.: The Phillips Curve postulated there was an inverse relationship between inflation and employment (e.g. one aspect was that as labor got tight, it cost more to hire people and that lead to inflation). It was utterly destroyed by the stagflation of the '70s where we got both high inflation and unemployement, but it's still the law of the land in the US (http://en.wikipedia.org/wiki/Humphrey-Hawkins_Full_Employment_Act http://en.wikipedia.org/wiki/Humphrey-Hawkins_Full_Employmen...). I prefer the explanation that you get inflation by "printing money", but as we and e.g. the Japanease in the last two "lost decades" show, it's not that simple: this is confounded by the velocity of money as the high level concept and at the low level is expressed as the futility of "pushing on a string" (e.g. "dropping money from helicopters" as the current Chairman of the Fed puts it does little good if people are afraid to borrow or lend). Macroeconomics is a wild blood sport where no one is really sure of their view of The Truth.
linhir 17y ago
You might want to try David Romer's Advanced Macroeconomics (a higher level undergrad text) or Acemoglu's Introduction to Modern Economic Growth (lower level grad text). From http://ocw.mit.edu/OcwWeb/Economics/14-452Spring-2007/Syllabus/index.htm http://ocw.mit.edu/OcwWeb/Economics/14-452Spring-2007/Syllab... : Macroeconomics is a rapidly changing field. To get a sense of the geography, you might find it useful to read two surveys (which are already on the verge of obsolescence...): Blanchard, O. "What Do We Know About Macroeconomics that Fisher and Wicksell Did Not?" Quarterly Journal of Economics 115, no. 4 (November 2000): 1375-1410. Woodford, M. "Revolution and Evolution in Twentieth-Century Macroeconomics." June 1999. Paper presented at Frontiers of the Mind in the Twenty-First Century, U.S. Library of Congress, Washington, DC, June 1999. For two more recent and more polemical, pieces, you may also want to read: Chari, V. V. "Modern Macroeconomics in Practice: How Theory is Shaping Policy." Journal of Economic Perspectives 20, no. 4 (2006): 3-28. Mankiw, N. G. "The Macroeconomist as Scientist and Engineer." Journal of Economic Perspectives 20, no. 4 (2006): 29-46.

hga 17y ago

Economics in One Easy Lesson by Henry Hazlitt. A set of short "lessons", starting with the Broken Window Fallacy. No special background required so it should work for someone with "a coding background". http://www.amazon.com/Economics-One-Lesson-50th-Anniversary/dp/0930073193/ http://www.amazon.com/Economics-One-Lesson-50th-Anniversary/.... There's an old 1948/52? edition available as a scanned PDF which can give you an idea if you want to buy the updated version: http://www.fee.org/pdf/books/Economics_in_one_lesson.pdf http://www.fee.org/pdf/books/Economics_in_one_lesson.pdf. At a higher level, The Road to Serfdom by Friedrich von Hayek is also short but unlike the above quite dense. Most useful (to me) for applying information theory to command economies. Rather apropos to the situation in the US today, it was published in 1944 and dedicated to "The socialists of all parties". It was intended as a warning to the British socialists of the day who were about to take over and remake their country, warning them of a variety of things, some of which they found out the hard way, plus the demonstrable even back then danger of concentrating so much power at the top (too easy for idiot thugs to take over, e.g. Stalin, "Those who are good at acquiring and exercising discretionary powers in government are usually the most ruthless and corrupt individuals." (Wikipedia)). http://www.amazon.com/Road-Serfdom-Fiftieth-Anniversary/dp/0226320618/ http://www.amazon.com/Road-Serfdom-Fiftieth-Anniversary/dp/0... Check out http://en.wikipedia.org/wiki/The_Road_to_Serfdom#External_links http://en.wikipedia.org/wiki/The_Road_to_Serfdom#External_li... for the Reader's Digest condensed version (Hayek was amazed at how good it was) and there's even a cartoon version that I reviewed and found to be quite good. After the above two you'll be oriented for a variety of much larger tomes, from the classic The Wealth of Nations to e.g. von Mesis' Human Action.

linhir 17y ago

Greg Mankiw wrote years ago on his blog a good list of introductory high level econ books: A student emails me asking for a summer reading list. Here are ten very different books I like that are fun enough that you would not be embarrassed (well, not too embarrassed) reading them at the beach: Milton Friedman, Capitalism and Freedom Robert Heilbroner, The Worldly Philosophers Paul Krugman, Peddling Prosperity Steven Landsburg, The Armchair Economist P.J. O'Rourke, Eat the Rich Burton Malkiel, A Random Walk Down Wall Street Avinash Dixit and Barry Nalebuff, Thinking Strategically Steven Levitt and Stephen Dubner, Freakonomics John McMillan, Reinventing the Bazaar William Breit and Barry T. Hirsch, Lives of the Laureates I'd also recommend a good textbook, if you're a little more serious.

MaysonL 17y ago

A few books I've found extremely helpful for thinking about these things. Jane Jacobs on cities as the economic entities that really matter: The Death and Life of Great American Cities, The Economy of Cities, and Cities and the Wealth of Nations. Peter Drucker: Entrepreneurship and Innovation. and the classic textbook: Paul Samuelson: Economics

billswift 17y ago

"Basic Economics" by Thomas Sowell is the easiest to read, accurate introduction I have read. "Hidden Order: The Economics of Everyday Life" by David Friedman requires a little more work. Several previous commentors have recommended Hayek's "Road to Freedom", but I think his last book, "The Fatal Conceit" covers more or less the same ground and is easier to read. "Software As Capital" by Howard Baetjer, Jr is interesting, but I wish he had discussed open source in it, since his analysis contradicts most open source theories and practice. A good Engineering Economics text may be useful. And I second the other commentors who suggested Jane Jacobs's "Economics of Cities" and "Cities and the Wealth of Nations" and O'Rourke's "Eat the Rich", his "On the Wealth of Nations", an analysis of Adam Smith's classic is also worth reading.