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Six big economic ideas [pdf]
- eternauta3k 10y agoIf 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).
- JackFr 10y agoAgree about EconTalk, though not as big a Mike Munger fan. (I am partial to Richard Epstein as a guest.) I cannot speak more highly of the host. Among podcasts about ideas, Russ Roberts is absolutely remarkable and unique in his willingness and ability to give a good-faith, sympathetic venue for ideas with which he disagrees. While he is willing to push back against ideas he doesn't agree with, he is always pleasant and always reminds the listener (and himself) that he is also subject to confirmation bias. And while the focus is economics and public policy, he will interview nearly anyone with something to talk about. I can't begin to list the things I've learned about bees, the potato chip and snack food industry, prison gangs, etc. Well worth anyone's time.
- tptacek 10y agoYes! It seems to turn out that for any random subject X you can ever imagine wondering about, there is someone whose academic career is "X economist", and they all seem to wind up interviewed on this show.
- icebraining 10y agoalways reminds the listener (and himself) that he is also subject to confirmation bias. I really like Econtalk and I don't really have any reason to doubt his sincerity, but I've realized that to people like me who dislike pundits, that kind of self-processed humility could be a really dangerous manipulation technique :)
- JackFr 10y ago> that kind of self-processed humility could be a really dangerous manipulation technique :) I just don't see that. "I believe these things are true, but I acknowledge that I am, like everyone else, subject to unconscious biases." "Well, that's exactly what a hyper-manipulative sociopath would say"
- icebraining 10y agoLike I said, I don't think Russ Roberts is being manipulative, let alone an "hyper-manipulative sociopath". All I'm saying is that I find myself accepting his position more easily due to it being colored by my sympathy for his humility.
- travmatt 10y agoIntellectual honesty and humility is a good heuristic to look for if one is blindly assessing arguments. Even though there's a chance he could be dead wrong on a given topic, the fact that a person with those traits has arrived at a conclusion tends to suggest there's an honest case to be made for it. In other words, you could do worse than finding honest people and listening to them.
- Avshalom 10y agoWell it's one of those things... http://mediarelations.cornell.edu/2016/06/21/in-doctors-we-trust-especially-when-they-admit-to-bias/ http://mediarelations.cornell.edu/2016/06/21/in-doctors-we-t... Disclosing bias makes you sound "more trustworthy" or something so people discount the bias.
- deleted 10y ago[deleted]
- oh_sigh 10y agoIt doesn't even need to be manipulation. Even those who recognize their biases are still biased, and many times in ways that they don't recognize
- 10y ago
- tptacek 10y agoStrong agree on Econtalk. I don't share Russ Roberts politics, but I think this is one of those cases where the ideological friction makes things better, because I'm regularly surprised by where conversations on the show go.
- davnicwil 10y agoCan't second the econtalk recommendation enough - I first heard about the show some years ago on HN, and have listened weekly ever since - so I hope a few more people get introduced to the show thanks to this comment thread!
- perseusprime11 10y agoEcontalk looks like a real gem. What other podcasts are out there?
- zachberger 10y agoAre you specifically looking for other econ podcasts or podcasts in general?
- perseusprime11 10y agoNothing in general. It could be science, technology or anything that is interesting.
- travmatt 10y agoI'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.
- eternauta3k 10y agoIf I could only recommend one, I'd tell you to listen to MartyrMade: an in-depth, ground-level look at the history of the Israel-Palestine conflict. It starts with a gruesome first-person narrative of a pogrom, and with every episode it gets you to understand and feel each side's motivations. http://www.martyrmade.com/fear-and-loathing-in-the-new-jerusalem-pt-1/ http://www.martyrmade.com/fear-and-loathing-in-the-new-jerus...
- patja 10y agoEcontalk is a great podcast. I dream of the day when Paul Krugman will agree to be a guest.
- travmatt 10y agoCouldn't recommend EconTalk enough. I'd consider Russ Roberts the standard of what honest intellectual discourse sounds like. Even when you can tell he disagrees with the guest, you can tell he works very hard to make sure he presents their views fully and honestly explore where exactly the differences of opinion form from.
- thr0waway1239 10y agoThomas 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 10y agoI 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!
- jwallaceparker 10y ago> Sowell's "Economics in One Lesson" "Economics in One Lesson" was written by Henry Hazlitt.
- jnordwick 10y agoEven 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 10y agoI 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.
- nl 10y agoIf 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 10y agoI 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 10y agoIn 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.
- ddebernardy 10y agoAdding to this, also check out the work of Steve Keen, of Debunking Economics fame. He has been expanding on Minsky for years, and posted quite a few great lectures on his Youtube channel: http://www.debtdeflation.com/blogs/research/ http://www.debtdeflation.com/blogs/research/ https://www.youtube.com/user/ProfSteveKeen https://www.youtube.com/user/ProfSteveKeen
- neom 10y agoSeeing 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)
- thr0waway1239 10y agoWe could create 6 TLDR threads for the 6 ideas so we could discuss them in their own branches. Any TLDR volunteers? :-)
- Kiro 10y agoWould prefer someone did a tl;dr right here.
- unusximmortalis 10y ago+1
- zygomega 10y agoAkerlof's: If you don't know whether you are being sold a lemon, you probably think you are, and will only pay lemon prices. Hence brands and hence public market information openness. Minsky: stability begets hubris begets instability in an endless cycle of humanity's economic systems. Governments need big balance sheets to sort that shit out. Samuelson: free trade with low-wage nations could hurt workers in a high-wage country. Duh. Keynes: beyond a point, people will not borrow any more no matter the interest rate, thank you very much. When this happens, governments should borrow (at very low rates) and spend to avoid economic malaise and collapse. They should not be austere. Nash Equilibrium: Watch Beautiful Mind Mundell-Fleming: A country can only ever do two of these things: fix the exchange rate, decide on interest rates, allow the free flow of capital. It's amusing when they try and do all three, or pretend to be doing something else.
- zumu 10y agoI 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.
- sebastianconcpt 10y agoBecause it involves things that are way beyond Economics and you could say are part of the never ending Cultural War (which sounds terrible but it has a bright side, differently from militar action wars the cultural war has as trench your mind, your values, your lifestyle and casualties are ideas that can't prevail). Example: Political Correctness is a weapon in the cultural war. A battlefield is the moral ground https://en.m.wikipedia.org/wiki/Culture_war https://en.m.wikipedia.org/wiki/Culture_war
- ktRolster 10y agoMath can be brief, you don't need to run experiments and interpret them. Physics can (often) perform the same experiment over and over in different circumstances to resolve a question quickly. Economics can perform an experiment once every decade, or even once every half century. For example, what would be the effect of the US government sending cash to every US citizen? We've done that three times, once under Carter, once under Bush, and once under Obama. The data needs to be analyzed thoroughly to see as much as possible the effects of the stimulus, and what was coincidence. You can't produce a "great depression" on demand; you have to wait for the next one to come along. In the mean time, you talk about it.
- D-Coder 10y ago"You can't produce a "great depression" on demand." Well, I think you could (eg remove all banking regulations), but you probably don't want to do that.
- thr0waway1239 10y agoIn addition to the other commenters, I would also add that the more the rigor, the more concise the language used to express it can be. I once heard the comment "Math is a purely manmade language". I think that is true, and its language can be really, really terse, usually because everything that builds on foundational principles can be rolled up into even more terse language. Physics, chemistry etc. less so because it is an observation of the stuff around us, which starts getting more ambiguous. People cannot even agree if economics is a science, it certainly does not possess much rigor (in the sense of reproducible experiments) and it intersects too much with human behavior which is wildly unpredictable.
- rer 10y agoCan anyone summarize these six big economic ideas?
- deleted 10y ago[deleted]
- 1wd 10y ago1. 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.