Modern Principles, 3rd ed!

Modern Principles 3rd
The third edition of the best written, most interesting principles of economics textbook, Modern Principles (economics, microeconomics and macroeconomics), hits the shelves any day now. The 3rd edition features a brand new chapter on asymmetric information, more material on economic growth including geography and growth, a new section on nominal GDP targeting and updated data and graphs throughout. Plus we have a very exciting and brand new feature used throughout the book…but I am going to hold off discussing that for a few more weeks. More to come soon!


And is a true bargain at $262.99.

asymmetric information indeed...

Actually Cowen and Tabarrok's book is cheaper than Mankiw and higher quality!

They had to put all that to acquire photo rights. If they could just stea^H^H^H^H share what they wanted, their copyrighted book would only cost $252.99.

"The 3rd edition features a brand new chapter on asymmetric information..."

Megan must be thrilled to get a whole chapter :)

$262.99. Unbelievable!

If the textbook is any good it will be copied and spammed by kickass torrents*, the ultimate flattery, especially for anti-IP AlexT ('imitation is the sincerest form of flattery') (sadly, the superior in layout * is off-line as of last week, possibly forever, and ironically is being mimicked itself by other sites,see

Which may be part of the reason that it's so expensive:

LOL from the comments section of the npr post:

Mankiw is the worst sort of economist. He's a blatant liar. Why does his book cost $320? Because that's how much the publisher, Cengage, has determined the market will bear. Why does he not advocate reducing the price of the book to make it affordable to more students around the world? Because he wants to make as much money for himself as possible. (This is also why pharmaceutical companies often price their newest drugs at outrageously high prices; to maximise profits in the short term, rather than to deliver the greatest public health good.) Mankiw does not care about the impact of his ridiculously priced book on the purchasers of his product, and he papers over any twinge of guilt he might otherwise experience by convincing himself that his personal brilliance is worth the extra money. Congratulations, professor, for playing your little part in the grand national pastime of burying America's college students in debt. (no sympathy from me as he dissed outrageously priced on-patent drugs, but it's telling how people think education is a public good. Nothing can be further from the truth. If you can't afford an Ivy League education you have no business applying to Harvard...)

He is the laziest textbook author on planet earth.

His "Real Economy in the Long Run" chapter still uses photos from 1994 ( to show "a typical family in the United Kingdom" "a typical family in Mexico" and "a typical family in Mali".

A two page spread.

In case the students should ever wonder why people in Mexico don't own cellphones...

He also famously cut material critical of supply-side economics from later editions of the textbook at right around the same time he went to work for the GWB administration. A mere coincidence, I'm sure.

Well he'll have to do better than that if he wants a job at MIT. has replaced

It also has less advertising and is faster :)

I never did like all that borderline porn that used to be laid into the pages.

Yes, textbook pricing is out of hand. But I think a more important question concerns the content of this - and all the other - books being marketed. I can easily believe this book is "better" in some respects than the other texts. One thing it shares in common, however, is the ever-increasing breadth of the material it covers. I am not convinced that the appropriate material for an introductory economics course is to include virtually everything we can imagine the subject to cover. Yet that is clearly what all textbook authors, Cowen and Tabarrok included, apparently believe. I would rather see a more narrowly focused course with more depth and a limited scope of material. These overly broad introductory courses pose three problems: (1) students do not really get to understand how economists approach analysis of problems, (2) they invite students to believe that a few economic principles make you an expert on virtually everything, and (3) by overwhelming students with the quantity of material they invite the worst pedagogical techniques - multiple choice memorization of a vast array of subjects.

Personally, I believe these books are better suited to graduating seniors or graduate students than for introductory students. When I see new chapters added (on asymmetric information, nominal GDP targeting, etc.) it makes me wonder what was dropped? My guess is nothing.


Yes, agree, economics is a mile wide and an inch deep. Answers to everything but the social sciences that cite some ephemeral story like touching your nose is a sure sign you are displeased with what you are hearing...taken as a hard fact, when it's flimsy.

If you've got a better alternative, do tell.

Not really sure how you came to the conclusion that asymmetric info is an advanced topic that only grad students or seniors should handle. Having taught it, it's a relatively easy and interesting concept that freshmen have no trouble grasping in Econ 101.

Also, part of the intent of these and other such textbooks is that they include everything such that instructors are free to pick and choose as they please. A typical introductory course would not involve students reviewing over 700 pages worth of textbook material.

Plus, most of these courses don't use calculus, so they're going to be broad, survey-type courses anyway.

I did not say asymmetric information is an advanced topic, nor am I saying it should be left out of an intro course. In fact, it is a core concept in my mind - and a lot more meaningful than including IS-LM analysis, for example. What I object to is attempt to make the intro course and book comprehensive. It is true that instructors can pick and choose what topics to cover, but there are two problems with this. First, most textbooks are not really modular enough to permit this to be done without unanticipated problems with students missing important concepts, and second, this is part of the reason the textbooks keep increasing in price.

In fact, you can view a textbook as a classic bundle - a bundle of individual chapters. A la carte purchases make a lot of sense to me - publishers claim to offer this through customized publishing, but if you try to use this you run into all sorts of issues. The hype of customized textbooks far exceeds the reality (and has for at least a decade now). Years ago, there were some basic texts that focused on the essential tools, which could then be supplemented with far more interesting books or articles. When those texts went out of print, they were not replaced by anything. It appears that economists like teaching with voluminous comprehensive texts - probably because they make it easy to have voluminous test banks of multiple choice questions that require little or no effort on the part of the instructor. But now I'm getting snarky.

If you had just one course in the subject I can see the value in a comprehensive intro text you could use years later as a reference.

We need digital copies that have a small version upgrade fee rather than a new book.

Hmm, why?

While I think text books are over priced, I'm doubtful of the model of a small version upgrade fee, unless it can generate enough in fees to guarantee quality work. In the long term, a student textbook subscription fee seems a likelier approach. But I would expect the fee to end up in the $200-500 per year range.

What work? How much of an intro book is repeating what other intro books have done? Is $200-$500 for slightly different problem sets, more 'hip' real world examples worth it or is it an artifact of the artificial command economy created by the class?

How about instead a wiki type document that grows the introductory chapters by consensus later flushing them out into more detailed and debated subfields?

E-textbooks have been around for awhile, but adoption rates have been slow.

Timothy Taylor has an impeccable reputation (he's the managing editor of JEP) and is the senior contributor to one such book:

And here's a list of others:

But it's been years since I've taught so I have no firsthand knowledge of any of these.

Go take a look at some of these texts from the 60s or 70s. Consider an early version of Varian's books on microeconomics. Almost all words, some equations, limited figures, graphs, etc.

Today, people who write textbooks are much more sensitive to the diversity of learning styles, and this continues to be exploited in the development of many new teaching strategies.

I like your suggestion, but I think the many pots of gold continue to offer good returns. However, as I mentioned above, I do believe that in areas of more undebated and established knowledge, there is a strong argument in favour of government intervention to ensure that all populations can easily access very high quality learning materials through the natural and social sciences. For example, enough to do basic programming, explain the basic organic chemistry expected from an experiment, uses and pitfalls in statistics, access to highly readable versions of all classic works of literature, philosophy, etc. I suggest somewhere in the range of 0.001% of GDP, and expect that the returns would be higher than just about any other area of public sector activity, although the returns would be essentially impossible to measure, and a priori I would think that accountability would be best served by means other than a strict economic returns analysis.

Indeed. For $200+ I should get a lifetime book. Send me the 'new' chapters to add on my own...perhaps to a binder type setup or as supplements. Historical data tables are probably not really necessary and can be sourced to a web page that will be constantly refreshed with new data.

I'll do one better for you. For $200 you get a 4 year subscription to the book. After that future updates will cost you $25 a year.

For the chapters that are not new, what has actually changed? Different pictures? Perhaps some more topical examples pulling from whatever the latest pop culture icons are big with the kids these days? Different homework problems? Should they really change?

Of course I'm assuming you are staying with a print book. For a digital book you can pull off updates even easier.

On the other hand, I do think about the whole end of civilization thing. If a comet strikes this book may be the only thing humans are able to recover 5,000 years from now. It wouldn't be very nice to tell them to consult wikipedia for all the important data!

Looks like Alex deleted my good natured inquiry into second hand textbook markets. Shame.

I was curious so bought the earlier editions of macro and micro texts this summer. I'm not sure how to judge econ texts, but I thought both were very good.

The total was around $15.00 including shipping through

I use the second edition but will I ask my students to pay that much? I hope there's a cheaper option.

I don't understand? Where is the invisible hand? Is it holding up the globe? Is it hands all the way down?

Or is a distraction while they steal your money?

It's picking your pocket.

The good thing for everybody here griping about the price is that you can now buy yourself a used copy of the previous edition cheaply. And for students -- Amazon has a $43 rental for the existing version, which isn't exactly a killer cost..

Ultimately, I suspect texts will go ebook only which will kill both the used market and, as a result, the need for frequent new editions with only minor updates. University bookstores will be cut out of the deal and maybe traditional text publishers as well. Amazon as publisher could probably pay authors higher royalties than they're getting now while charging students dramatically less than the $250 university bookstore prices.

'I suspect texts will go ebook only which will kill both the used market'

Do you know any current university students? The texts went ebook years ago - not that I would expect any links demonstrating such availability would survive filtering. Well, except for, that is.

Translucent multi-cultural hands! Neat.

How many books from Tyler's best books of the year list can you buy with $260? I just received my copy of The Martian, for which I paid about $5. I am in page 11 and there is something interesting in every page. I predict I will finish it.

Not trying to be snarky, but whoever designed and whoever approved that cover should seek new lines of work (and I know it's virtually always the publisher, not the authors, who choose book covers).

At least the old cover seemed to be saying we'll put the world in your hands.

This one? Are they making the world spin around?

Is the shadow cast by the Dark Hand over North America a subtle jab at President Obama?

If Cowen and Tabarrok won't break out of the "textbook industrial complex," who will?

The founders of MRU also playing the textbook game makes as much sense to me as libertarians seeking tenure on the public roll.

That said, it's just in time for Xmas. Put me down for 6 as stocking stuffers.

The textbook would be even better if it were written by people who know something about economics. Sadly, it wasn't.

If you're going to be mean and/or off the mark, at least be funny.

As a way of supporting this blog, I will buy all three if they are available from Kindle. However, I agree with Gavin Kennedy that the 'Invisible Hand' is not a helpful concept in economics or political economy, although it might well be an excellent title for a horror movie. Adam Smith could just as easily written a 'magic glove.'

The earth image is clearly from the dry season. The Sahel would be much greener in the rainy season. But I think it does serve to highlight a point that it's not so easy to print money from dust and sand.

I can understand that books in optometry or advanced physics are expensive. There isn't a whole lot of new knowledge to report a lot of the time, but pedagogy is always changing and there are very small markets. $300 times a few thousand students might actually reflect only chump change left for the author after all production, marketing and distribution costs.

But when the market is some millions or tens of millions per year, even though few texts will capture a high share of the market, I find common prices in the $125-200 price range for 1st and 2nd year texts to be completely unreasonable. That having been said, I would rather the market decide these things, except for areas where knowledge is basically figured out on things and governments should collaborate to ensure free actualized access to the highest quality of pedagogical materials. Why, for example, does a 1st year algebra or calculus text continue to cost $100+ when the latest and greatest secrets of the field were already mandatory wrote learning in related fields generations ago?

One of the biggest problems I have with many introductory texts is that they are designed for the use of professors who appear more concerned with selling students on the real world veracity of the theorums presented in the introductory text rather than presenting them simply as highly imperfect analytical tools which rarely hold when all complicating factors are added. I think this critique is essentially correct with the exception of some basic monetary policy principles which essentially must be nearly true because cash is too liquid to sustain any notable price differentials in the absence of currency controls.

Specifically, the requisite notes on rent controls and minimum wages always present things as being worse for everyone, but I promise you, the situations in my life where rent controls and minimum wages helped me, an absence of regulation would unabiguously have led to my getting screwed and a simple transfer from poor me to whoever was in the better position to take advantage of my position.

Consider the ability of a small business and a large business to perform a market evaluation, in particular given that governments around the world are reducing public availability of data in the same breath as they trumpet the "open data" projects that they got working on some years earlier.

Also, many texts promote the myth that we actually have a free market by evading any routine acknowledgement of barriers to entry and other ever-present issues which amount to market failures. The reality of history is that the West engaged in significant intervention throughout almost every aspect and stage of development of the most important industries, but tries to tell everyone else that an absence of planning (no regulation, no government action) is the best way forward.

Creative destruction and market discipline are powerful concepts and powerful forces. They are not powerful enough for this modern field of moral philosophy to pretend that an absence of subjective ethical valuation is itself an amoral strategy. Au contraire!

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