Macroeconomics and intuition
349293
Good book to start building a macro economic model coupled with some behavioral finance. Sometimes sounds a bit unscientific but nonetheless a very comprehensive take on economic growth at country level.
293789
Schiff wrote this book in 2006 before the 2008 worldwide recession but it is still valuable to read. He famously predicted many of the events such as the bursting of the housing bubble very well. But if you had listened and followed his investment advice even back in 2006, you would not have done necessarily that well. For example, his bearish predictions on the dollar and bullish prediction on European and Asian stocks did not turn out to be so accurate. Of course the degree of accuracy is largely dependent on the exact time one chooses to look at the variables that he talks about. For example, at the height of the financial meltdown, the dollar gained surprising strength and Chinese stocks fared worse than US stocks. I don't believe that one should judge the quality of this book based on the accuracy of Schiff's predictions.

Crash Proof starts out very strong with excellent analysis of the US economy and the potential problems that the government has been creating. I appreciated Schiff's logical thinking. His excellent analogies, alone make the book worthwhile to read. Schiff's pessimistic views may rub many Americans the wrong way, but it is not his fault that we find ourselves in the mess that we are in. He talks about many of the problems such as social security, national debt and low savings rate that will eventually pose big problems for the country. Rational citizens can get motivated to stop the bleeding and correct the course of the country. Schiff is not so hopeful. He is planning to run for the Senate in Connecticut but I doubt that he will be able to sell his message. He does not have the right temperament to be a politician and I mean this as a complement to him.

As the book progresses, its quality deteriorates. It becomes redundant and I sensed the writing even became careless. His investment advice towards the end amounted too much to a sales pitch for his company which cheapened the book. He directs readers to his website and his company numerous times. There were also parts that were written for an audience that knows little about investing (such as explaining PE ratio) and other parts that were written for more advanced investors.  Nevertheless, I recommend this book for its macroeconomic insights.
1187986
It is an excellent book for those who want to gain practical knowledge of how to use one's intuition. On the one hand, it provides some "theory" written in an entertaining way, on the other hand, there are practical exercises that help develop one's intuition. I can only highly recommend this book.
4140716
This is a very good book grounded in solid microeconomic theory foundations. It starts with classical micro theory such as preferences and axioms, and it moves on to risky preferences and methods on how to retrieve  them by constructing careful experiments. It also discusses the limitations  on preference retrieval by such axiomatic methods due to the heuristics and  biases  that occur in decision making behaviour. However,  this book is  also useful for non-economists, as it describes decision making theories  and applied methods on how to retrieve preferences in fields such as policy  and medical sciences. The book's target market is mostly economics/  decision sciences graduate students or those who have achieved a comparable  or higher level of their studies/work experience. It has also very  instructive real world examples of PhD students running preference  retrieval experiments and reporting their results. Good book for those keen  on the subject. The 1976 version of the book has won a book prize, hence  the assurance of quality. Furthermore, Raiffa is a well established Harvard  academic, which further lends credence to the book.
861098
I missed the book when it first came out.  Readers with an economics background can appreciate Skidelsky's writing for its insight into Keynesian and classical economics, and their respective newer neo Keynesian and neoclassical versions. Those who have little or no knowledge of economics would have to read the book more carefully and sometimes backtrack to grasp some of the concepts and the theoretical underpinnings of these two schools of thought.  But it will be worth their while to do so. It is unfortunate that the author did not resort to simple graphs -a vital tool to understand economic theories- to illustrate some of the concepts he discusses.

The author reviews the causes of the financial crisis and the subsequent Great Recession of 2008-2009, when the US economy lost over 8 million jobs just in those two years. He contrasts explanations of the financial debacle offered by the two schools that have dominated the economic policy debate over the last 100 years. Neoclassical (or neoliberal) economists or rational expectation theorists (i.e., The Chicago School) blame loose monetary and fiscal policy for the financial collapse. Neo Keynesian economists place responsibility on (1) higher interest rates which brought the housing market down, (2) deregulation -especially the 1999 repeal of the Glass Steagall Act of 1933 which opened the door for banks to enter into all sorts of financial speculation- and (3) the 2004 SEC ruling allowing banks to raise the liability to net worth ratio from10: 1 to 30:1.

He concludes that the neoclassical view with its premises of flexible wages and prices, the use of money strictly for transactions or as a medium of exchange, and the role played by the interest rate in equilibrating savings and investment  defy common sense because it does not reflect the reality of the world. Alternatively, the Keynesian view subscribes to the idea that market uncertainty and business and consumer expectations are not easily predicted, are difficult to incorporate into financial risk and macroeconomic models, and undermine the suppositions of the neoclassical theory.  Further, wages are inflexible downwards because they are fixed by contract, custom and tradition.

Neoclassical economists believe that unemployment is only a short run problem and it is caused primarily by the slow growth of the money supply, i.e., insufficient money to purchase the surplus output of goods and services. In other words, recession and depression are a strictly a monetary phenomenon.  Thus, monetary policy alone (i.e., increasing the money supply and reducing interest rates) will turn the economy around and reduce unemployment.  While recognizing the important role of monetary policy (i.e., lower interest rates), the neo Keynesians explain unemployment by inadequate aggregate demand. Consumers simply do not buy enough goods and services and business do not spend enough on buildings and equipment to employ the entire labor force. Thus, only government can fill the void by spending sufficient money to provide a boost to the economy.  Therefore, Keynesians emphasize the role of fiscal policy (i.e., increasing government spending, decreasing taxes, or both) as a more effective way to stimulate the economy and reduce unemployment.

The author also criticizes current economic thinking due to the heavy emphasis on mathematical models and esoteric algorithms that defy adequate measurement and common sense. According to the author, economics is a moral science, so economists should be concerned as much with social justice and fairness as with efficiency in the market place.
4125791
Beinhocker shows quite clearly that the existence of a single ,static,stationary,unique,stable, equilibrium  point ,to which all economic disequilibrium positions are supposedly always tending to approach naturally ,unless subjected to some temporary,disequilibrating exogenous shock or government interference,as postulated a priori by numerous 19th and 20th century neoclassical macro and micro economists',has little or no firm empirical support. Following up on the ideas of Knight,Schumpeter,and Keynes(Ellsberg's 2001 model, that incorporates the particular variables highlighted by Knight,Keynes,and Schumpeter in their work,is overlooked. Mandelbrot is mentioned in passing;unfortunately,his analysis pin pointing the " wild risk " of capitalist financial markets is not emphasized),Beinhocker shows that the destabilizing forces in a capitalist economy are endogenous and internal to the system as a whole. Furthermore,the variable interactions create positive feedback effects that magnify, amplify and increase negative outcomes such as unemployment and inflation as opposed to the negative feedback effects that would dampen and temper these negative outcomes,gradually dissipating them and returning the system to its supposedly natural equilibrium. The economic system is thus a complex,evolutionary constuct whose long run trajectory is unpredictable due to the uncertainty created by constant financial and technological advances,changes and innovations incorporated into  new kinds of capital goods that threaten to make all,or most,previous capital goods obsolete.
  Beinhocker does not emphasize  the pregnant term coined by Schumpeter to describe the impact that endogenous technological change has on economic growth," regular irregularity ".This is the reason why Tinbergen's neoclassical dream of being able to predict turning points in the business cycle, based on a multiple regression analysis centered on the role of  investment as its main determinant,has failed. He is also totally unaware of the mathematical proof worked out by Keynes in chapter 20 of the General Theory establishing the multiple equilibrium nature of capitalist economies. Keynes's conclusions can be demonstrated simply by looking at the optimality condition needed to obtain a stable,unique,single,full employment equilibrium-mpc+mpi=1. Unless this condition holds,it is impossible to obtain the unique market clearing stable equilibrium postulated by neoclassical economists in the labor market,that mpl=w/p,where mpl is the marginal product of labor derived from an aggregated neoclassical production function,w is the money wage,and p is the expected price level,since the generalized necessary condition is that w/p=mpl/(mpc+mpi),where mpc is the marginal propensity to consume and mpi is the marginal propensity to invest. The usual case is that mpc+mpi<1 due to the unpredictable role played by the mpi. In chapter 21 Keynes adds the money market. The optimality condition becomes w/p=mpl/e,where e= (M/p)/(dm/dp).If e=1,the neoclassical case of a full employment equilibrium occurs. If e<1,a set of multiple unemployment equilibria occurs. It will be impossible for labor,as a whole,to cut its money wage. Only if long lived,irreversible, fixed durable capital goods investment is a stable function of the rate of interest alone would the neoclassical result be possible.
  Overall,I would recommend this book be purchased.
4146285
Este  o primeiro livro que eu vejo que possui uma abordagem matematicamente formal para a Macroeconomia, em particular para a teoria de crescimento.
2285420
This book is an easy read and provides the fundamentals of economics in plain language. I highly recommend it for anyone who wants to understand complex economics principles without the rigors of unnecessary calculations and unexplained economic jargon.
4752197
Gilder makes a good case that we don't know what we think we know about economics.  He applies the principles developed in his previous book to diagnose the slowdown in the rate of innovation in the economy and the increase in speculation and financialization, particularly since the dollar was taken off the gold standard and allowed to float.  He tackles both Keynesonians
2376142
I have come to treat Thomas Sowell books as a valuable but finite resource.  As the Doctor is now eighty-seven, I fear that there aren't many works forthcoming and, so, I've restricted myself to reading one of his insightful volumes per year.  You have likely already determined that this review comes from a biased source as this is the fifth Thomas Sowell book that I've read and I consider him to be our greatest living popular Economist.  For the layperson, I would always recommend Dr. Sowell to explain economics.  His writing is straightforward but sometimes colorful, and he manages to be both insightful but also digestible compared to a Friedman or a Hayek.

All of that said, my Sowell reading selection for 2017 ended up being "Economic Facts and Fallacies".

Sowell starts the book off strongly, and anyone who had only a tepid interest in economics could gain valuable insight by committing to read only the first chapter.  In chapter one, "The Power of Fallacies", Sowell starts by unpacking what he considers to be the broadest economic falsehoods which he will then spend the rest of the book dissecting.  These are: the "zero sum" fallacy, the "fallacy of composition", the "post hoc fallacy", the "chess-pieces fallacy" and the "open-ended fallacy".

The book limits its scope, with only six real chapters of content following.  These will overlap somewhat with the subject matter of Sowell's grand work: "Basic Economics".

I found the most insightful chapters of "Economic Facts and Fallacies" to be "Male-Female Facts and Fallacies", "Academic Facts and Fallacies", and "Third World Facts and Fallacies".  One specific takeaway that will stay with me was the brief discussion on the college accreditation process (in the "Academic" chapter); something that I had never contemplated or understood as a distortion of the price mechanism in college costs.  I feel that a lot of eyes are probably glazing over as they read that, but for those of us that crave an understanding of economics it was really quite insightful.

I gave this book four stars not because there was anything wrong with it, but because I would probably recommend several of Sowell's other works ahead of it.  I view it in no different a light than I do Quentin Tarantino films in my personal taste.  I recommend them all, but it loses meaning if I were to give all of them five starts without working to parse further.  Well, in the end, every Thomas Sowell book is either four or five stars, and that is the best that I can divide them.

I'll finish my review with my favorite passage from the book, found in its closing pages and deeply insightful:

"Perhaps most dangerous of all is the practice of not subjecting fashionable beliefs to the test of facts, but instead accepting or rejecting beliefs according to how well they fit some pre-existing vision of the world."
76454
The authors recognized the problems with the way that the subject of open economy macroeconomics has been taught in graduate programs in the past. In particular, there was little agreement and no definitive text that tied  together any unified theme. Eclectic reading lists, mainly from the 1960's  and the 1970's, were provided on each subject area with major changes in  analysis required to shift from one area to another. The counter argument  from others in the field was that the modern literature lacked policy  relevance. The authors' retort by claiming that the "classic  approach" lacks internal consistency and the micro foundations  required. Moreover, the older approach has been criticized for failing to  deal with dynamics clearly and does not address many of the policy issues  that are relevant today.  With the exception of two chapters on money the  text builds up from a single analytical framework to display several of the  key results in international macroeconomics and growth. A rigorous approach  based on the micro foundations of macroeconomics is used throughout the  text. While this approach may be criticized for putting forward only a  Neoclassical method, the authors have made an effort to include models of  imperfections and some material based on Keynesian underpinnings. The text  gives a current appreciation of the state of  the literature in the field  and as such is an excellent reference tool. The authors' vigilance in  updating the material in the text via the  web site is particularly  appealing as it keeps it contemporary. For the targeted consumer: the  graduate student (like myself) and certainly the academic, the level of  sophistication is not prohibitive.
4044720
Allow me to pay respect and compliment to Mr. Don Paarlberg here. Mr. Don Paarlberg has an insightful understanding of human nature and their behavior that his examination and explanations of inflation history grab my intention very time I read this book. They make a lot of senses and transform my knowledge of economics into a penetrating understanding of human behavior and reactions to certain events. Mr. Don Paarlberg elevates my perspective toward macro-economics to a higher level, that of a human behavioral one, and certainly broadens my eyesight with regard to how human nature and human behavior did not change over the past two thousand years or so in terms of what people would do in reaction to price drivers. Lastly, I appreciate Mr. Don Paarlberg's exquisite, precise, and concise way of writing, something much less seen nowadays. Thank you, Mr. Don Paarlberg.
812731
NOt a fan reader of economics, but this book made it simple to understand. Although I bought this book while reading another book about finance, I wish I had read this book before. Very insightful.
4526236
Daniel Kahneman got the Nobel Prize in Economic Sciences in 2002 for his work in psychology that challenged the rational model of judgment and decision making. In Thinking, Fast and Slow, Kahneman explains the two systems that drive the way we think and decide. System 1 is fast, intuitive, and emotional; System 2 is slower, more deliberative, and more logical. System 1 jumps to conclusions, unaware of alternatives, effects and root causes of problems. System 2 is lazy, will provide substitution with simpler answers whenever possible. Most of the times these two systems take care of our survival as humans, but on decision making, gambling, etc. they're dead wrong quite often. Kahneman's book is not a standard text book to be used in college or university, but takes you along his lifetime journey of research and collaboration with fellows like Amos Tversky (Judgement Under Uncertainty: Heuristics and Biases) and Gary Klein (Conditions for Intuitive Expertise: A Failure to Disagree).
The impact of loss aversion and overconfidence on corporate strategies, the difficulties of predicting what will make us happy in the future, the challenges of properly framing risks at work and at home, the profound effect of cognitive biases on everything from playing the stock market to planning the next vacation--each of these can be understood only by knowing how the two systems work together to shape our judgments and decisions. He proves concept like planning fallacy, the discrepancy between Econs (homo economicus, as I learned this super rational being during my years of economics study) and Humans, and what the rational agent model / utility theorem, promoted by John von Neumann and Oskar Morgenstern fails to support. Other minefields are Bernoulli's expected utility concept and the indifference map. You learn what the denominator neglect, mental accounts, the sunk cost fallacy and framing comprise. Thinking, Fast and Slow is accurate and actual, not only the 60's revive with renderings from Herbert Simon, but also contemporary concepts like Groupthink, and the wisdom of the crowds, best sellers like Malcolm Gladwell`s Blink and  James Collins` Good To Great are digged. Simon's definition of intuition: "The situation has provided a cue; this cue has given the expert access to information stored in memory, and the information provides the answer. Intuition is nothing more and nothing less than recognition." is right, Collins' great companies prove dead wrong, when looked at a couple of years later. Each chapter is stuffed with experiments, statistics and finished with quotes to underline the main lessons. Some examples are: "Let's decorrelate errors by obtaining separate judgements on the issue before any discussion. We will get more information from independent assessments." Conclusions from experiments like "Subjects' unwillingness to deduce the particular from the general was matched only by their willingness to infer the general from the particular." are clarifying and provoking. And, what a pity: even Kahneman's own psychology students don't apply the principles just learned in a Good Samaritan like exercise. We're human after all.
305370
Over the years many economics theories have come and gone.  First it was the Austrians, leave us alone economic theory.  After the depression, than it was Keynesian theory.  Then comes monetarism, supply side and rational expectations.  Wouldn't it just be totally amazing if their was one book which put these theories in a laboratory, found where one theory is correct, and the others in error.  If such an attempt has ever been made William Greider is the man.

He starts of with the high inflation era in the late 70s, when inflation was getting at 15%.  The Keynesians would say, you can't have high inflation and high unemployment.  But that is what was happening.  As they just couldn't get a grip on inflation, interest rate ceilings had to go.  If the maximium a savings and loan institution can charge is 5.25%, its not going to work if inflation is much higher than that.  So getting rid of the ceilings was the first thing.  Then they gave monetarism a try.  One problem, the liquidity trap.  If the money supply is $1 Trillion, and money changes hands 6 times, this means $6 Trillion worth of transactions.  When the Fed helped create a recession if the amount of times money changed hands went to 3, $1 Trillion x 3 = $3 Trillion.  In other words, where monetarism went wrong is it presumed velocity would stay about the same.  So for years, their was a recession, with less transactions even though the money in circulation went up.  Interest rates continued to skyrocket, destroying the housing industry.

It also looks at supply siders, the reagan tax cuts, gave the signal to the fed, that the money in circulation would go up (less taxes more money), so they did something to reduce the money supply, higher interest rates.  But then wait a minute, its the Keynesians who started it up.  If Keynesianism had never been tried, giving us double digit inflation, than maybe other economics ideas could have worked.

It also discusses the Real Bill doctrine, and the greenback party.  These ideas could easily become an economics doctrine in its own right, and gives us a couple of examples of rational expectations.  It also mentions economist Thorstein Veblen numerous times, so their you have it many economics theories reperesented.

So, if you are not sure which economics theory works and which ones don't, this will show you the faults.  Last but not least Greider does it in story form, and uses words that make it lucid.
4030332
I had the fortune to attend a phd class of Prof Duffie where a preliminary version of this book was used as teaching material. The book is highly insightful. It gives background information on some recent papers of Prof Duffie and coauthors. It initiate a new research branch in Financial Econometrics. I suggest it to anyone doing research in IO/ Corporate Finance / Market Microstructure / Financial Econometrics.
217441
Just finished the book.  It is very impressive.  Even if you are already familiar with the Austrian School, the book is useful because it puts in one place the latest refutations of objections to the most important, and timely, Austrian insight, the Business Cycle Theory.  The rest of the book is also excellent in its consistent application of the theory of subjective value, the foundation of the Austrian School.  I personally love the way the author uses quotes right from Austrian masters to reinforce his points.
For the novice, there are few places to gain a firm grasp on real economics so quickly and painlessly, it's a complete first-year course.  After reading this, read, Economics in One Lesson by Henry Hazlitt and then, What Has Government Done to Our Money by Murray Rothbard.  Also read the daily articles on Mises.org to stay up on current events and to reinforce your newly found expertise in economics.