Best economics books of the year

1. Best behavioral economics books of the year, Daniel Kahneman, Thinking, Fast and Slow, and Bryan Caplan, Selfish Reasons to Have More Kids.

2. Best economic history book, Alexander Field, A Great Leap Forward: 1930s Depression and U.S. Economic Growth.

3. Second best eBook of the year, Erik Brynjolfsson and Andrew McAfee, Race Against the Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity, and Irreversibly Transforming Employment and the Economy.  By the way, here is my recent debate with Erik; we both agreed in advance to mix things up and generate controversy, so interpret the exchange accordingly.  In reality, Erik and I agree about many many things and Matt Yglesias notes as much.  (We do, however, seem to disagree about what this graph means.)  Arnold Kling comments on the debate itself.

4. Best economics/business book of the year: Tim Harford’s Adapt.

5. Best Austrian or Austrian-influenced book of the year: Daniel B. Klein, Knowledge and Coordination: A Liberal Interpretation.  It’s not out yet, I’ll cover it more when it appears, more information here.

6. Best economics textbook, Ahem!  I don’t mean my favorite economics textbook (though it is that too), rather best economics textbook.  The revised second edition of Micro just appeared, the macro is due out any day now.

Overall if I had to pick one, text aside, it might be the Alexander Field book, but this is a diverse lot with something for everybody.

Comments

Hi, Tyler.

Why do you think your book is the best text on economics? What makes your stand out?

Endowment effect, right?

Sure, endowment effect. After all, the FIRST book category Tyler mentions is ... behavioral econ.

Be that as it may, thanks for an interesting looking list. I will read a couple of these.

If Tyler didn't think it didn't say everything that needed to be said, the way it needed to be said, he'd have written it differently. Yes?

That's the beauty of textbooks.

Good books indeed.

Another subject matter area for consideration is the national power grid and jobs.

Our grid isOur moderators screen these comments before they are published
so yesterday that it wastes 2/3 of the fuel used to generate electricity.

For every three barrels of oil purchased at a hundred or so dollars a barrel, two of them are burned up with zero return on investment.

Wasted on the way to the consumer because the grid leaks electricity.

Think of the jobs and economic boost that would come from repairing and rebuilding it!

http://blogdredd.blogspot.com/2011/11/grid-and-bear-it.html

We don't burn oil to generate electrcity, jeaneeus.

Furthermore, most of the energy "loss" occurs at the combustion phase, in the plants, not on the grid. Transmission losses are typically lower than 10%, and are usually a more efficient energy delivery mechanism than moving fuels to where the end user is. In a world where people and fuel are not at the same location, there is no free lunch with respect to movng energy to them.

1. Kaplan? Really?

Best Austrian or Austrian-influenced book of the year..

That has to be a GMU book... :)

It will be interesting to see how you can read Kahneman's Thinking, Fast and Slow and maintain your Libertarian, always trust the market because it contains all information, view of the world, while at the same time not seeing the potential for market failure and mechanisms to correct or prevent it.

American pragmatism should be an economic philosophy, but it isn't a choice on the menu.

Do people suddenly stop having irrational biases when they become government bureaucrats?

Think slowly.

Think slowly: The regulatory process, if you want to use that as an example, is open to public comment, and moves slowly. So, if you think something is irrational, point it out.

That would only matter if people revise their "irrational" valuations once these biases are pointed out. Does the endowment effect (for example) go away once people learn about it?

If we are still talking about regulation, it's awfully hard to ignore rational comments, particularly since the agency has to respond to them, and the regulations can be kicked into the courts where there is another reviewer, a judge. In the political process, there is always the legislature that can come back and change regulations by law.

On the consumer side, there have been experiments on whether repetition or time, for example, mitigate some effects. For example, cooling off periods.

I believe Charlie Plott at Caltech has done some work on repetitive games and mitigation of the endowment effect. In your own experience, when you sell your house, does the real estate agent come back with comparables to show you or asked you to visit a comparable. On the other hand, are you still holding on to that stock which you wouldn't purchase now but because you show a loss are holding onto it hoping that it will go up to the price your purchased at?

"always trust the market because it contains all information"

Yeah, 'cause I've heard him say this... oh wait, 0 times.

6) With regard to your dynamic aggregate demand-aggregate supply model, you should consider extending it to labor with the vertical axis representing wage inflation and the horizontal axis representing percentage change in employment.

The dynamic AD-AS model on You Tube--
Part 1
http://www.youtube.com/watch?v=vRIK4AXlUK4
Part 2
http://www.youtube.com/watch?v=uQwdMI37y5c

With a child on the way, I read Caplan's book and found it disappointing/unpersuasive. I found this one article by Matt Ridley to be more informative and more up-to-date in its science than Caplan's entire book:

http://online.wsj.com/article/SB10001424053111903392904576510752966680380.html

I read "The Myth of the Rational Voter" too and found it could all be encapsulated/better explained in this brief PDF article Caplan wrote elaborating on the book.

Maybe Caplan's next book should be a short ebook instead.

I liked Caplan's book but I agree it would have been better as a long-form essay like they publish in the Atlantic or the NY Times magazine. His central thesis is brilliant, but a lot of it is just filler.

I'd love to get the Alexander Field book, but it's so bloody expensive ($30+ for a 400-page book, both hard copy and e-book). My local library system doesn't have it either.

When I saw Daniel Kahneman speak (at Town Hall Seattle), all he did was spend 45 minutes telling us that intuition isn't all it's cracked up to be. Please tell me the book's more complicated than that.

It is.

It is a great book because he develops the themes showing how he experimented with others to make these seminal discoveries which challenge the rational economic man premise of micro. Although shortcuts to thinking is a common theme, you are really looking at irrationional behahaviour in many, many contexts. Just as game theory has altered the classic micro model in industrial organization, behavioural economics based on experiments and observation, helps you understand what you see in your everyday world that does not comport to rational models.

You won't be sorry you read it. I've purchased copies for my kids (one an investment banker, the other a pathologist) because both need to keep their heads straight..

Next time I teach a pricing course, or lecture at an Exec MBA program on pricing, I am going to assign the book, and not just the technical articles. You'll be able to apply this book in your daily life. And, be dangerous.

Adapt was subject to probably the most devastating review I've seen since Sraffa reviewed Prices and Production:

http://whimsley.typepad.com/whimsley/2011/06/an-uncertain-world-ii-adapt-by-tim-harford.html

lol @ number 1

Brett, I found the same thing with the Field book. That's too high of a price for a book in today's market. I was surprised.

Thanks for your works.

Tim Harford's book is the best Austrian economics book of the year.

In terms of economic history I liked

The Great Economic Train Wreck: When America Went Off the Rails
http://goo.gl/yrY33

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