Tuesday, January 28, 2014

What I've Been Reading

The Undercover Economist Strikes Back: How to Run-or Ruin-an Economy by Tim Harford.

Macroeconomics is hard. You have ten billion distinct varieties of product, seven billion people, countless unobservable transactions. 2 The economy is shaped by psychology, history, culture, unforeseeable new technologies, geological and climatic events, computer trades too quick for humans to perceive, and much else. It is a dizzying, imponderable problem. No wonder we struggle.

Tim does an excellent job of explaining macro economics concepts in a simplified Q&A format while following Einstein's heuristic. And Tim's sense of humor makes it more fun:

When Nicolas Sarkozy was president of France he commissioned three renowned economists, Joseph Stiglitz (a Nobel laureate), Amartya Sen (another Nobel laureate) and Jean-Paul Fitoussi, to contemplate alternatives to GDP. One possible reason for President Sarkozy’s enthusiasm was surely that the French spend most of their time not working, and this lowers France’s GDP. The country is likely to look better on most alternative indices. It’s not unreasonable to look at those alternatives, but let’s not kid ourselves: politicians are always on the lookout for statistical measures that reflect well on them.

You cannot find a better book to understand macroeconomics - highly recommended. 

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