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Recommend Me A Good Macroeconomics Book
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2012 Dec 21, 1:54am 13,883 views 38 comments
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Bellingham Bill
2012 Dec 21, 2:02am
http://www.amazon.com/Debunking-Economics-Revised-Expanded-Dethroned/dp/1848139926
isn't bad
I haven't seen any mainstream people show they understand anything, really.
Just a bunch of bullshit.
Stiglitz has been saying the right stuff about how unbalanced everything has become so his macro textbook might be good:
Read the WSJ everyday
Maybe the WSJ of 20-30 years ago, but certainly not today's fox news version. The WSJ has become as much an extension of the R party as the NYT has become of the D party. I see more inaccurate and/or political propaganda articles in the WSJ than in any other mainstream news source. The Economist is a better bet and is a lot less parochial.
GraooGra
2012 Dec 28, 4:51am
I used to have a subject at my university (not in the States): A History of Economic Thought.
I bet there are books with a similar title. You will find everybody important in economy.
bmwman91
2012 Dec 28, 7:17am
Thanks folks. I am picking up this one for now:
http://www.amazon.com/New-Ideas-Dead-Economists-Introduction/dp/0452288444/ref=lh_ni_t
It sounds like it touches on all of the major theories and includes lengthy discussion about Keynesian vs monetary policy, which is of particular interest.
As far as weekly periodicals, I think I'd go with the Economist. The WSJ has a lot of interesting reads, but they do seem to focus a little more on politics than I care for. I wouldn't call them a printed copy of Fox News by any means, despite being owned by R.Murdoch, but the Economist seems a little more impartial overall, and just deals with less political stuff anyway.
Sort of unrelated...any thoughts on Foreign Policy Magazine? A roommate of mine in college subscribed to it (PolySci guy) and it seemed like a decent read at the time. It's been years since I had a copy though.
GraooGra
2012 Dec 29, 2:21am
Keynesians dominate economical field currently. Krugman is a darling of the left. I know that Hayek was not even thought and he was in obscurity for a long time.
I like to go to the following web sites:
http://econstories.tv/
http://mises.org/
http://www.cato.org/
These people make sense to me.
Peter P
2012 Dec 29, 3:41am
It is also good to read Das Kapital just to see what it has to say. Especially regarding Relative Surplus Value.
bmwman91
2012 Dec 29, 5:47am
Gah, so much to read and learn, so little time! I have my work cut out for me once I finish off some technical texts that I am working on!
uomo_senza_nome
2012 Dec 29, 7:11am
My recommendation: two books by Burton Klein
Dynamic Economics
Prices, wages and business cycles
macro economy is a complex adaptive system and it needs to be studied that way. Mainstream economics hardly does that.
This website does a reasonable explanation of complex dynamic systems.
Repubthug
2012 Dec 30, 8:11am
Read the WSJ everyday
Maybe the WSJ of 20-30 years ago, but certainly not today's fox news version. The WSJ has become as much an extension of the R party as the NYT has become of the D party. I see more inaccurate and/or political propaganda articles in the WSJ than in any other mainstream news source. The Economist is a better bet and is a lot less parochial.
completely agree
cant get myself to read it through anymore..fox propaganda in print
sad way to go for such a prestigious news paper
tomorrow will b last delivery of my wsj
Patrick
2012 Dec 30, 8:15am
As far as weekly periodicals, I think I'd go with the Economist.
I agree. I used to read The Economist and learned a lot.
Now mostly I just check out the new books at the local libraries. Lots of good stuff there and it's free.
Just got one, and about 1/4 way through, - its right on and been around 200 years.
Montesqueiu "The spirit of Laws".
The WSJ has become as much an extension of the R party as the NYT has become of the D party. I see more inaccurate and/or political propaganda articles in the WSJ than in any other mainstream news source. The Economist is a better bet and is a lot less parochial.
Lets not forget how Rubert Murdock changed the Simpsons into a Pro Republican - Pro Conservative platform .
Gah, so much to read and learn, so little time! I have my work cut out for me once I finish off some technical texts that I am working on!
your just a young pup.. you have many many years ahead of you.
You can as easily enroll for a small fee into the local Community Class course to help pace you.
After 12 weeks your set with say macro-economics and another 12 weeks with micro-economics.
else skip it and just buy the Econ text book from local University...say Santa Clara University, San Jose State. Text book is pricy but you should be set ... I still have mine from my MBA course.
Or you can pick up a prior edition from Ebay once you know the Title, Author, and Edition no.
If your looking for econ to make sense from the perspective of science & engineering, don't even bother. Everything taught in macro 101 is pseudoscience with overly simplistic modeling that has already been disproven by reality time and time again. The leading macro textbook for decades was Paul Samuelson. This clown predicted the Soviet Union would overtake the US in GDP in every addition and he kept revising his prediction by pushing it back when it didn't materialize. He clung to this belief even up to the collapse of the Soviet Union. It's indicative of the mainstream field as a whole. A bunch of jokers who solve mathematical puzzles without having any clue about how the real world actually works.
B.A.C.A.H.
2012 Dec 30, 1:35pm
"Nickel and Dimed: On (Not) Getting By in America" by
Barbara Ehrenreich;
"Credit Card Nation: The Consequences of America's Addiction to Credit" by Robert Manning;
"The Two-Income Trap: Why Middle-Class Parents are Going Broke" by Elizabeth Warren and Amelia Warren Tyagi;
"The Housing Trap" by Patrick Killelea.
bmwman91
2012 Dec 30, 1:57pm
If your looking for econ to make sense from the perspective of science & engineering, don't even bother.
Hmm...so are there any econ texts out there that actually make logical sense and correlate with reality? If not, then I guess that that explains a lot about economists and their predictions.
bmwman91
2012 Dec 30, 1:57pm
"The Two-Income Trap: Why Middle-Class Parents are Going Broke" by Elizabeth Warren and Amelia Warren Tyagi;
I LOVE the reviews/comments about this book on Amazon. Apparently it struck a nerve with feminists or something. So much anger!
Well, don't read any mainstream macro books, which are full of crap.
Read this: Modern Money theory primer by Randall Wray.
I can lend you that book, if you are in Mountain View.
And read all old posts at this blog http://bilbo.economicoutlook.net/blog/
This one: http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf
bmwman91
2013 Jan 1, 6:07am
Hey raindoctor,
I'd love to borrow that book. I do indeed live in MV, in the North Whisman area.
pdh
2013 Jan 1, 6:10am
Read the WSJ everyday
The Financial Times is much better, and without the reactionary opinion pieces to boot.
bmwman91
2013 Jan 1, 6:21am
I talked with an old friend of mine for a while the other day. He was a finance major and now works in the mortgage lending industry. I'd say that I learned a lot about economic science form that discussion, namely that it is not a "science" in the way that I was thinking it was. Truly, studying crowd psychology looks like a better way to understand macro-econ than studying "the fundamentals". Fundamentals matter in the long run, but the long run can be a lifetime. I think I'd summarize my current understanding of things as, "How people react to market situations is generally well known. How to GET people to react the way you want is the real trick."
bwmman91,
You have a narrow circumscription of what science means. In fact, the whole domain called "history and philosophy of sciences" is all about what science is. In other words, sciences = human knowledge (theoretical/propositional).
Swimming, driving, etc, are skills: they constitute human knowledge, but not theoretical the way sciences are. I am not gonna become a swimmer by reading a book on swimming. Books help once you know how to navigate yourself in water. So, we need to recognize this kind of knowledge as well: performative knowledge or skills. Today, we don't know much about this species of knowledge.
Economics as a domain strives to produce theoretical knowledge about economy. Now the question is this: how to produce knowledge about any domain? The precondition to production of knowledge is understanding. If you understand some phenomena, you can come up with a hypothesis that accounts for or explains or unifies these phenomena. The question, then, is: what if we have competing hypotheses for some phenomena? Here, the history of sciences teaches a lesson: pick a hypothesis that explains more 'facts' than its competing hypotheses.
The other issue: every domain is full of adhoc hypotheses. In some sense, neo-liberal economic paradigm is full of adhoc hypotheses. Philosophy of sciences also discusses about what it means to be an adhoc explanation or hypothesis. The way I see it, after reading enough literature in philosophy of sciences, is this: a hypothesis or an explanation that explains pre-selected facts is adhoc. That's why we need to look at another dimension: problem-solving capacity of that hypothesis or 'predict or retrodict' other facts etc.
So, we need non adhoc hypotheses that explain many economic phenomena. Forget stock markets and indices all other crap that finance folks sell, unless u wanna gamble on wall street. You need an understanding of whole economy; an understanding that does not leave out black holes. For instance, you can ask how credit, money, income, production and wealth are related. Wynne Godley, an ex-UK treasury official turned economist, thought for four decades about that relationship. Finally, he came up with one: check his work with Marc Lavoie "Monetary Economics: An integrated approach to Credit, money, income, production and wealth". It is a dense book, which I don't recommend. You can get the gist of it if you read Modern monetary theory (MMT).
The other way to look at economy at macro level: in terms of aggregates (aggregate demand, agg supply, etc); in terms of sectors (Government, firms, households, private (firms +households), external sector (foreign trade)). Here, Godley's contribution is enormous: esp his sectoral balances approach. His sectoral balances identity is one of central tenets of MMT.
You can also look at what money is. How money is created. Mainstream peddles fractional reserve banking and money multiplier theory. Mainstream also confuses stocks with flows: for instance, look at Michal Kalecki called economics "the science of confusing stocks with flows" in his critcisim of the quantity theory of money.
The other misunderstanding sold by the mainstream and media is treating governments with sovereign money like households. They also commit another fallacy: fallacy of composition by mapping micro level understanding to macro.
Mainstream does not fully understand 'endogenous' money: money created by banks or by companies, etc without federal reserve. It is also called horizontal money in some circles. Then, there is exogenous money: this is created by the government with the help of federal reserve. Mainstream treats this as monetizing debt; but there is no monetization involved, because government is not like housholds or firms. So, every phenomena can be described in many contradictory and competing ways: that's why we know today that facts are not theory-neutral. Every fact is theory-laden: in some context, we consider a fact as neutral because it is not in dispute (for instance, we dont dispute abt whether 2 * 100 = 200 or whether boolean logic is consistent); in other contexts, we can take the same fact as theory-laden (when you use theory of approximations, 2 * 100 = 199.99 ).
The list goes on.
For proper understanding of economics at macro level, focus on these issues.
1. A framework of money, income, production, credit and wealth without any black holes.
2. Sectoral balances
3. Stock flow consistent models
4. Endogenous and exogenous money
5. Treasury and federal reserve day to day operations, capital vs reserve requiremts
Once you understand the above five, you can move on to
6. prices, inflation, taxes
7. (un)employment
8. aggregate demand, paradox of thrift
9. rentier capitalism (extracting rent in many ways like mortgage, land rent, insurance, finance industry).
If I were you, I would start with
A. Seven deadly frauds of Economic Policy (freebook at http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf )
B. Soft currency economics II by Warren Mosler. It is a kindle book for $2.99 or free if you own a kindle.
C. Modern Money theory by Randall Wray. You can take it from me.
D. Read at http://bilbo.economicoutlook.net/blog/ . For instance, when you have some doubts about NAIRU curve and unemployment, just search "NAIRU site:bilbo.economicoutlook.net"
Once you have mastered all these, you can study Wynne Godley and Marc Lavoie's Monetary Economics. I have an electronic copy, which I can share with you. But you don't need to read it, once you gone through the above material.
This knowledge does not help you become a good trader on wall street, where having an 'edge' matters. Edge is all about how to get insider information without getting caught: that's why Steven A Cohen does not do it directly; instead, he hires portfolio managers, who have a good track of gathering insider information. This is also another reason why sales folks make more many than traders: all founders of major hedge funds are sales folks; they go and talk to those 500 billionaires, pension funds, foundations like harvard, stanford, etc, and get the money for their funds. Once you have the money, you can hire 'best' traders from your competition!!
bmwman91
2013 Jan 1, 10:26am
raindoctor, thank you for the thoughtful post. I started reading the Mosler PDF about an hour ago. I have to say that the 7 "innocent frauds" were initially an affront to what I thought that I knew and I was tempted to shake my head and quit. But, continuing through the read, Mosler's explanations make sense and I can see that my ideas about "money" are seriously flawed, at least as far as what it is and the rule sets that the government has versus individuals. I'll reserve further comment for when I finish it, and maybe re-read it since it's contrary enough to my narrow understanding of things that I'll probably need to.
http://www.amazon.com/Debunking-Economics-Revised-Expanded-Dethroned/dp/1848139926
Steve Keen is okay, whose understanding is confined to endogenous money and Minsky. Don't waste money on his book. Just stick with MMT, which also covers the endogenous money and Minsky.
MMT is culmination of many ideas, fitted like a pattern:
1. Abba Lerners' functional finance
2. Warren Mosler's treasury and fed reserve operations
3. Wynne Godley's Sectoral balances, and his integrated approach to credit, wealth, money, income and production
4. Endogenous money of Post Kenysian tradition
5. Minsky ideas
It is always better to stick with a theory that covers more ground than its competition. In this sense, don't waste ur money or time reading Steve Keen's book or blog. You can help him out by donating some money to his minsky tool.
Check this draft book on macro economics based on MMT
http://bilbo.economicoutlook.net/blog/?cat=35
Peter P
2013 Jan 1, 1:48pm
In other words, sciences = human knowledge (theoretical/propositional).
Science is an epistemology. Scientism is a dogmatic religion surrounding science.
Science is an epistemology. Scientism is a dogmatic religion surrounding science.
Well, epistemology is about knowledge. Epistemology with a orientation towards history of natural sciences is philosophy of sciences, which is also called meta-sciences (science about sciences or knowledge about knowledge).
Since you bring in religion, do you know that religion is precondition for the growth of what we call natural sciences? It is a hypothesis advanced by a Dutch historian of science R. Hooykaas, check his book "religion and the rise of modern science". There is another hypothesis advanced by comparative cultural theorist SN Balagangadhara: What we call sciences today is a western cultural product. The how of this cultural production has to do with the way Chirstianity shaped the western culture. We don't need to discuss this here. Check this http://xyz4000.wordpress.com/2011/03/17/religion-and-origin-of-natural-sciences/
Peter P
2013 Jan 1, 2:31pm
I think religion is quite important. But there are "good" ones and "bad" ones.
A "good" religion empowers you. A "bad" religion enslaves you.
Faith is a necessity. All useful knowledge involve some faith. Truths without faith are at best probabilistic and at worst tautological.
It is a good book. Karl Marx claimed that his theory is a science as well as a critique of existing theories in political economy. He saw the wholesale financialization of economy coming, but did not analyze that hypothetical scenario. So, his macro theories were fit for then pure industrial production. Today, we need to think from the other end of the spectrum that everything (raising kids, breeding kids, doing house chores, etc) is financialized.
Michal Kalecki, a product of Marxian school, is a great place to start if u want to understand modern economies. Even John Maynard Keynes 'stole' kalecki ideas and presented as his. Then MacMillan publishers did not want to publish Kalecki's works; instead, they went with Keynes; that's how Keynes has become famous. Otherwise, Kalecki's theories and/or are far better than Keynes. Check Bill Mitchell's blog for Kalecki.
From philosophy of sciences perspective, Marx also contributed to these ideas: idealization and conretization. Polish philosophers like Leszek Nowak and his colleagues also wrote a series of books on idealization and concretization. Check Leszek Nowak's book: "The Structure of Idealization: Towards a Systematic Interpretation of the Marxian Idea of Science".
The country who invests wisely, and trains their citizens on a practical manner and frugalness knows economics:
http://endoftheamericandream.com/archives/45-signs-that-china-is-colonizing-america
The country who invests wisely, and trains their citizens on a practical manner and frugalness knows economics:
The real problem lies in understanding that collective noun "the country". That collective entity does not represent the interest of 'common' good; instead, it is controlled by monied interests, super duper wealthy, etc.
Or you can buy the thesis that the so-called concept of 'public interest' is incoherent, as shown by economists Kenneth Arrow and Amartya Sen. From my notes on "public interest":
"Arrow argued that we cannot speak of ‘public will’ in any coherent way; Sen argued that we cannot aggregate private preferences into a consistent and coherent set of ‘public preferences’. Our notion of ‘public interest’ includes these two notions and, as a consequence, does not allow of a coherent conceptualization. Even banning smoking in public places (whatever the notion of a ‘public space’ be) is not very coherent, if argued in terms of ‘public interest’. In this sense, justifying complex actions, which carry unintended consequences, in the name of public interest is not an interesting exercise. (b) Despite this, the idea of the state and its relation to public interest preoccupies people because of something else: that is the belief that every institution in society has an ‘interest’ and the state has a ‘public interest’. That is, there is an underlying assumption of ‘intelligibility’ to claims about ‘institutional interests’: each institution has an interest the way each individual has either a ‘desire’ or ‘interest’. The more I read history, the less intelligible it has become to me. I believe that this claim is a ‘secular translation’ of the idea that the Christian Church has some set of interests and political thinking, since the Middle Ages in Europe, has so constantly hammered on this theme that it has become a trivial fact that we take for granted. It is totally unclear to me how we identify the ‘interests’ of a social institution, the State included, and how we find out whether we are wrong or right in attributing such an ‘interest’ to a social institution. In other words, we have no clue how we solve our disagreement in this area of legal and political philosophy: the more radical the disagreement, the less clear how we should solve the issue: suppose I deny that the State has any set of interests that it can call its own, how do we solve this disagreement? On the basis of some or another definition about what ‘interest’ is or what ‘State’ is?"
bmwman91
2013 Jan 2, 1:51pm
Hey rainman, thanks for the link to the Mosler PDF. It has given me a lot to think about.
I would like to find a book that covers the most generally accepted theories of macroecon, not so much new-age economists' ideas about things
read keynes if you want to start by building a foundation. he's credited as heavily influencing, if not creating macro economics. current US policies are heavily keynesian. apparently, he's a genius too and it's never a bad idea to read source material originating from a genius.
quick primer: http://en.wikipedia.org/wiki/The_General_Theory_of_Employment,_Interest_and_Money
then read fred hayek who is the flip-side to keynes.
Anyone have a good macro-econ book to recommend? I didn't take any econ electives when I was in college, and I'd like to see about getting a firmer grip on what is generally accepted in that area of academics. It's all good and fun to take an engineering approach to understanding economics (things like facts and logic), but it seems that things don't work quite like that in reality (or maybe they do and I am just missing some pieces of the puzzle...hence my desire to read up on it). I would like to find a book that covers the most generally accepted theories of macroecon, not so much new-age economists' ideas about things. A textbook is a fine recommendation BTW...I already read technical texts for fun, so this would just be a change of pace. Thanks.