Recommended Economics Books
Great writing on economics and economic policy has taken off in recent years, even as policymakers increasingly appear to ignore the many lessons economics teaches us. We list our top recommendations for the best books on macroeconomics and microeconomics, including bestselling popular economics books, and undergraduate and graduate level textbooks.
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Capital in the Twenty-First Century
by Thomas Picketty, translated by Arthur Goldhammer Belknap Press: An Imprint of Harvard University Press This is a deeply important book for our time. It speaks to the essential question about the sources of wealth and how it is divided in society. Pickett argues for placing the study of distributional questions back within the heart of economic analysis. Unfortunately, a key conclusion is that there is no "natural, spontaneous process to prevent destabilizing, inegalitarian forces from prevailing permanently." |
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Economics Rules
- The Rights and Wrongs of the Dismal Science
by Dani Rodrik This book by Professor Rodrik of Havard University (and previously Columbia University) addresses both those who critique the economics profession from the outside, and provides his own critique and guidance from within. Those outside the profession often fail to recognize that there is no "standard answer" and that models exist and are in use that address the weakness they may percieve. And for economists themselves, they are generally aware of the limitations of models and know more suitable models, but communicate to broader audiences with less nuance than they posess, and appeal to fall-back models that they themselves know are flawed. Rodrik highlights the multiplicity and richness of the set of models that economists know and use, the value of their mathematical rigor, and the importance of applying the appropriate model to a particular problem. |
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Lectures on Macroeconomics
by Oliver J. Blanchard and Stanley Fischer MIT Press We were assigned this book in graduate school, particularly the first chapters on the two macroeconomic workhorse models: the Ramsey optimal savings model, and the overlapping generations model. Nowadays, I find myself referring back to it as a reference, e.g., for the chapter on "Useful Models" which includes a discussion of the Consumption CAPM, Lucas Asset-Pricing Model, Aggregate Supply-Aggregate Demand (AS-AD), IS-LM, and the Mundell-Flemming models. The introductory chapter on the "stylized facts," that is comovements in output, prices, interest rates, unemployment, consumption, and investment at various leads and lags, sets the stage for the dymamics that macroeconomics seeks to explain. |
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Microeconomic Theory
by Andreu Mas-Colell, Michael D. Whinston, and Jerry Green Oxford University Press Regrettably for me, this excellent textbook came out just after my microeconomic coursework. Along with the textbooks by Kreps and Varian, you'll have most graduate-level microeconomic theory covered. The text bulids up from individual choice under certainty, classical theories of consumer behavior, and theory of individual choice under uncertainty. It then introduces game theory in which multiple decision makers interact (pre-publication versions of this chapter were important for teaching purposes even before the book came out). Later chapters cover competititve and noncompetitive equilibrium, welfare economics, and implementation of social choices in the presence of incomplete information about agents' preferences. |
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The Elusive Quest for Growth
- Economists' Adventures and Misadventures in the Tropics
by William Easterly Professor Easterly offers a compelling story, based on his personal experiences and the broader literature, on practical efforts by institutions such as the World Bank to promote economic growtn around the world. In telling the story, he describes the theory, actual initiatives, and sadly, the frequent disappointments along the way. The book adds color to what the "dismal" in the dismal science. Among the key lessons are that there are no magical elixirs to satisfy the quest for growth. For prosperity to happen, all players in the "development game" must have the right incentives. Government must be held accountable for its actions, and energetically invest in collecive goods such as health, education, and the rule of law. |
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Numerical Methods in Economics
by Kenneth Judd MIT Press In economics, analytic solutions to problems that permit generalization are traditionally preferred. But in applied work where additional realistic detail is often required, problems quickly become analytically intractable or unmanageable. With this book, Judd did a great service for the economics profession by advocating for the use of computational methods, and producing a book that highlights computational tools from mathematics and sciences that are of most use for economists. |
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Recursive Macroeconomic Theory
by Lars Ljungqvist and Thomas J. Sargent MIT Press This book superceeds the prior standard graduate text by Thomas Sargent, Macroeconomic Theory, for use in a first-year course in macroeconomics for graduate programs. Various chapters may also be used in a course on labor market dynamics. Much of the book explains how to use recursive methods to study macroeconomics. Dynamic economic models characterize and interpret the covariation of time series variables in terms of the purposes and opportunities of economic agents. Agents make decisions choosing components of time series in light of their consideration of other components. Recursive methods are key to solving dynamic problems in many economic applications. The textbook places applications front and center, providing just enough detail for the reader to understand the power of recursive methods. MATLAB programs, additional exercises, and answers to exercises are available on the book's websites. |