Read The Little Book of Economics: How the Economy Works in the Real World by Greg Ip Online

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One positive side-effect of the recent financial market meltdown that toppled giant, century-old institutions and cost millions their jobs is that it created a strong desire among many Americans to better understand how the U.S. economy functions. In "The" "Little Book of Economics," Greg, Ip, one of the country's most recognized and respected economics journalists, walksOne positive side-effect of the recent financial market meltdown that toppled giant, century-old institutions and cost millions their jobs is that it created a strong desire among many Americans to better understand how the U.S. economy functions. In "The" "Little Book of Economics," Greg, Ip, one of the country's most recognized and respected economics journalists, walks readers through how the economy really works.Written for the inquisitive layman who doesn't want to plow through academic jargon and Greek letters or pore over charts and tables, "The Little Book of Economics" offers indispensible insight into how the American economy works - or, doesn't. With engaging and accessible prose, the bookProvides a comprehensive understanding of each aspect of our economy from inflation and unemployment to international trade and financeServes as an insider's guide to the people and institutions that control America's economy such as the Federal Reserve and the federal budgetExplains the roots of America's current economic crisis and the risks the country faces in its aftermath, such as stratospheric government debt, while offering advice on overcoming these threatsWalks readers through the basic concepts and terminology they need to understand economic newsPunctures myths and political spin from both the left and the right with candid and often surprising insightA must read for anyone who wants a better grasp of the economy without taking a course in economics, "The Little Book of Economics" is a unique and engaging look at how the economy works in all its wonderful and treacherous ways....

Title : The Little Book of Economics: How the Economy Works in the Real World
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ISBN : 9781118391570
Format Type : Hardcover
Number of Pages : 288 Pages
Status : Available For Download
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The Little Book of Economics: How the Economy Works in the Real World Reviews

  • Riku Sayuj
    2019-04-01 08:35

    The Little Review of EconomicsUsually when an Economics book claims to condense core ideas into a short frame, it is best for the reader to be on the lookout for ideological biases. It is hard to boil down the opposing ideas that make up Economics into any simple framework without committing many sins of omission. As all such books do, Ip too starts with the set formula of Economics text books: first give a brief on how economics is perceived as such a hard and complex discipline and then assure the reader that in this book it is presented in a simple and concise manner. What is left out in such introduction is the fact that the book hardly ever even attempts to address the whole field.Contrary to most such books, Ip manages to steer clear of obvious bias and also manages to keep the explanations simple enough for the lay reader (though he uses sections called "into the weeds" to ex[lain more complex concepts) In all, this is a cute little book to have and it can serve as a useful introduction. Ip never goes beyond the most basic of concepts an never ventures into the really controversial areas - that is how he keeps it simple and bias-free. This reduces the usefulness somewhat, but on the other other hand, it makes it a book that can be recommended to a novice student without fear of early distortion. Which was my purpose in reading this one.1. A Recipe for Economic GrowthWhy do some countries grow and some stagnate? In a nutshell, growth rests on two building blocks: population and productivity.1. Population determines how many workers a country will have.2. Productivity, or output per worker, determines how much each worker earns.Thus we arrive at the following recipe:a. Take a Growing Populationb. Add Capitalc. Season well with Ideas.d. Stir with a good dose of Human Capital, Rule of Law & Well-functioning Marketse. Serve and monitor step d for deviations.In Short:• Long-term economic growth depends on population and productivity. A growing population is the source of future workers, and the more productive those workers are, the richer they become. It takes investment in both capital and ideas to raise productivity.• Ideas enable us to recombine the workers and the capital we already have in new ways to produce brand-new products or old products at a lower price. Competition forces countries and companies to copy each other’s ideas and constantly come up with new ones.• Both investment and ideas must be nurtured. Honest government and trustworthy laws encourage investors and innovators to take risks in hopes of reaping the rewards. Investment in education enables workers to take advantage of the latest ideas. And free markets ensure that dying, unproductive industries are culled so that growing industries can attract capital and workers.2. Business Cycles, Recessions, and DepressionsEvery business expansion eventually dies. Only the cause of death changes. Economists often miss fatal imbalances because they’re looking in the wrong place. Having vaccinated everyone against whatever killed the last business cycle, they fail to spot the virus that infects the current one. Depressions occur when the economy’s normal recuperative mechanism fails to engage.• Ultimately, long-run growth drives our standard of living. In the short run, the economy goes through regular cycles of expansion and recession. These cycles are driven by how much consumers and businesses spend, which in turn depends a lot on their view of the future.• Bullish expectations boost investment, stock prices, and lending, all of which feed back to the economy. Eventually, though, expectations get ahead of fundamentals, creating imbalances. These imbalances come undone, usually with a nudge from the Federal Reserve, producing recessions.• Recessions create pent-up demand. Lower interest rates eventually release that demand, bringing the recession to a close. Sometimes, though, this natural restorative process fails, because a broken financial system dams the flow of credit. Then, a recession may become a depression.3. Tracking and Forecasting the Business Cycle (from Takeoff to Landing)The Four Engines of the Economy have to be running smoothly for it to operate well. These are the ones we should monitor (in the order given) to be able to predict (with reasonable confidence) where the Flight is headed:1) Consumer spending and housing: 66% to 76% of GDP2) Business investment in buildings, equipment, and inventories: 8% to 13% of GDP3) Government spending: 18% to 20% of GDP4) Exports: 8% to 12% of GDPConsumer spending is the economy’s ballast: though large, it doesn’t fluctuate much from quarter to quarter, except for big-ticket purchases like houses and cars.Housing though a form of consumer spending, behaves differently from the rest of this category - it is a highly volatile component, one of the most volatile things in the economy.• Movements in GDP are dominated by such "most volatile" categories of spending: housing, business inventories, and big-ticket consumer purchases, like cars.• Forecasting the business cycle is risky business; you have to carefully monitor a continuous blizzard of data which, though faithfully gathered, may be out of date and inaccurate. Stock prices, the yield curve, and commodity prices are all useful leading indicators but send a lot of error signals.4. Employment, Unemployment, and Wages• In the short run, the number of jobs rises and falls with the business cycle. In the long run, though, the growth in jobs usually tracks almost perfectly the growth in the number of people who want jobs.• The unemployment rate is the single best signpost of the economy’s health. When the economy reaches full strength, the unemployment reaches its so-called natural rate.• Pay usually tracks productivity, which is why, over the years, workers have gotten richer. In recent decades, however, the best-paid workers have seen their salaries grow much more rapidly than the rest of the work force has, because of the premium on skills, weaker unions, and superstar salaries, whether for lawyers or for athletes.5. Inflation and DeflationThere are two competing schools of thought on the causes inflation:a) Monetarism - blames inflation on too much money chasing too few goods. This makes great sense in theory but is less obvious in real life.This is because the central bank doesn’t control the entire money supply, only a narrow portion of it: specifically, the notes, coins, and reserves it supplies to commercial banks.For money to cause inflation, it must be lent and spent. Banks lend more only when they have healthy balance sheets and a lot of eager, creditworthy customers. Consumers spend when they feel confident about their jobs and salaries - both these things are not controlled by the Central Bank's actions directly.Monetarists claim that growth in the money supply leads to more spending and more inflation. Actually, it’s the other way around. Every dollar consumers borrow or spend returns to the banking system and shows up in someone else’s checking or savings deposit or money market mutual fund, which are all part of the broader money supply (which has labels like M1, M2, and M3).For this reason, the Fed doesn’t target the money supply. It uses its control of reserves only to ensure banks have enough cash to keep their ATMs full, and to control short-term interest rates. Therefore, its influence over the broad money supply is indirect. If it raises interest rates, it will dampen spending and, eventually, the money supply. If, however, the economy is truly moribund, because no one wants to lend or borrow, the Fed can drive interest rates to zero and print gobs of money without causing broader measures of money and credit to grow.b) So save some trouble and don’t preoccupy yourself with the money supply. For a more realistic picture of inflation— look at the neo-Keynesian picture.• The money supply is a lousy guide to where inflation is going. Better, instead, to monitor how far the economy is operating from its capacity. For example, if unemployment is 5 percent, it doesn’t have much spare capacity left. Wages are the best evidence of an economy running out of capacity. If wages aren’t rising, a wage-price spiral can’t happen.• Inflation is more likely to rise if people expect it to, because they’ll adjust their wage and price behavior accordingly. Stable inflation expectations are a bulwark against both inflation and deflation.6. Globalization• Falling trade barriers, rising affluence, and the plunging cost of selling things across borders have fueled globalization. Able to buy from and sell to the entire world, even small countries can achieve exceptional levels of wealth.• Trade makes the United States a whole richer. But the benefits are not shared equally. Especially as services trade grows, the biggest gainers will be the highest skilled workers while those with the least skills will see their wages eroded.• Free trade is not politically popular and every country routinely indulges its protectionist impulses. Yet free trade survives because countries have also agreed to subject their actions to the rules of the World Trade Organization which keeps trade spats from becoming trade wars.7. The International Market• Global capital markets let investors diversify their portfolios and borrowers choose from different sources of capital. There’s a downside, though: Investors’ savings may be battered by events in far off countries, while companies and countries can abruptly have their access to capital cut off.• Currencies over time reflect their purchasing power and thus countries’ inflation. But in the short run, economic growth, interest rates, and current and capital account balances drive currencies, sometimes violently.• The United States borrows cheaply abroad in great part because foreign central banks like to hold dollars: they’re safe, easy to convert to other currencies, and backed by a strong, stable country.8. Controlling the Economy (or die trying!)• Governments don’t control the economy but they sure try. A government’s economic agenda is dictated by ideology, but how it is implemented depends on the circle of economic advisers in the various high profile Economic bodies.• The governement also exercises a lot of influence through his appointments to dozens of federal regulatory agencies. The bank regulators, for example, influence who gets credit and under what terms while the Justice Department and the Trade dept set the ground rules for business conduct and competition.9. The Central Bank/Reserve• The Fed stands alone in its economic sway and its independence. It can print and destroy money at will to protect the financial system from panics and to manage the business cycle.• The Fed is a compromise between political accountability and private independence. Its politically appointed governors and privately appointed reserve bank presidents make up the Federal Open Market Committee, which sets monetary policy at meetings eight times a year.10. Monetary Policy• When setting interest rates, the Fed weighs how far the economy is from its potential, and how far inflation is likely to be from 2 percent. This is harder than it sounds because the economy responds unpredictably and with lags.• At meetings, Fed officials listen and debate the best path for monetary policy. A few dissent but the chairman always carries the day. The Fed gives out so much information that the result is seldom a surprise but it still moves markets.• The Fed carries out monetary policy by using open market operations to move the Federal Funds rate, charged on loans between banks, up or down.• When the Funds rate fell to zero in 2008 the Fed turned to quantitative easing: buying up bonds to push down long-term interest rates. Quantitative easing has unpredictable political and economic consequences.11. Lender of Last Resort & Crisis Manager• The Federal Reserve has made its name managing the economy through monetary policy, but its parents had a different career in mind: to act as lender of last resort when banks ran out of cash. The Fed is uniquely suited to the job because it can simply create whatever money it needs to lend, primarily through loans from its discount window, and withdraw the money from existence when the loans are repaid.• During the financial crisis the Fed dusted off a loophole to lend not just to banks but to a wide assortment of companies. In so doing it may have saved the country from another Depression, but it also awakened politicians to its formidable power.12. Fiscal Policy• The federal government is a gigantic player in the economy and it will get bigger in coming years as government services expand, the population ages, and interest on the national debt mounts.• Federal spending comes in three varieties:1. Interest on the debt.2. Discretionary spending.3. Mandatory spending.• Tax revenue comes mainly from personal and corporate income and payroll taxes. Compared to other countries, the United States relies relatively little on consumption taxes such as on gasoline or a value-added tax.• Every year the president proposes a budget; Congress accepts some of it but ignores a lot as it passes the appropriations, tax, and mandatory program laws.• Unlike the federal government, states must balance their budgets each year, which makes for profligacy in good times and wrenching austerity in bad times.13. The Debt in the Machine• Chronic deficits compete with private borrowers for limited savings driving up interest rates, retarding investment, and impairing future economic growth. Interest on the national debt starves other government programs.• Budget deficits can be good. During recessions, tax revenues fall and spending on the poor and unemployed rises, softening the sting. There’s less competition with private borrowing.• Governments sometimes use fiscal stimulus—that is, a deliberate increase in the deficit—to boost a weak economy. This is usually unnecessary, unless the Fed is unable to do the job because it has already cut interest rates to zero.• A breaking point can come when debt is so high that investors suspect governments will try to renege either by defaulting, or through inflation.• The United States’ long history of fiscal probity, favorable long-term growth outlook and control of the world’s reserve currency, suggest it has a long way to go before it faces a crisis, but the risk can’t be rule out.14. The Financial Markets- Stocks are simple and glamorous. Credit is complicated and dull. Yet it matters more to the economy.- Mortgage-backed securities are a great idea that Wall Street, as is its habit, took to excess.Years ago you would put your money in a bank and the bank would grant a mortgage to your neighbor. Now, you:• Put your money in a pension fund• Which is a partner in a hedge fund• Which buys a collateralized debt obligation• Which holds a mortgage-backed security• That a bank put together• Out of mortgages it acquired from a mortgage broker• Who made the original loan to your neighborDid you get all that?Anyway,• You don’t have to hug your banker, but what he does is essential to economic growth. Banks and capital markets match savers with those who need capital.• Over the years, banks have been joined by shadow banks that, like banks, made loans but don’t take deposits and aren’t as tightly regulated. All these institutions need capital to protect against losses and liquidity to repay lenders. Too much of either, and profits suffer. Too little, and the institution could fail.• Equities get all the attention in the capital markets but the economy relies more on a healthy market for debt securities, such as money market paper, bonds, and asset-backed securities.15. The Multiple, Recurring Causes of Financial Crises- Almost by definition, crises are unexpected because they involve collective errors of judgment.Condition 1: Afloat on a Bubble(But, not all bubbles lead to crises. To produce a crisis requires leverage.)Condition 2: Leverage, the Prime SuspectCondition 3: Mismatches, the First Coconspirator(Rising dependence on short-term borrowing is often a telltale sign of trouble -- Mismatch = borrowing short-term to make long-term investments.)Condition 4: ContagionCondition 5: Elections(Crises often come in election years. They are often a result of economic stresses that can only be fixed with painful remedies that politicians running for election don’t want to administer.)So,• Every crisis is different but they share certain traits. An asset price that deviates from historical fundamentals may signal a bubble, but not when or how the bubble will burst.• Debt is a prime suspect in every crisis. Currency and interest rate mismatches, reliance on short-term debt, and moral hazard are all coconspirators.• Crises are spread through contagion: Investors burned on one company or country flee others that look like it. A failing bank pulls down others with whom it trades or has other relationships. Because of contagion, companies or countries that were merely illiquid become insolvent and collapse.• Highly Leveraged bubbles + impending Elections = WATCH OUT!Anything familiar?

  • Daniel
    2019-04-03 08:39

    The author says that growth comes from population size and productivity which increases the pay of productive people. Unfortunately, even the examples he picks show this isn't even remotely true. There is no necessary relationship between what a person gets paid and how productive they are. There is a necessary relationship between how much someone has the authority to determine their own pay and how much they get paid, but this has no relationship to actual productivity. It's just about who has the leverage to force others to give them more money. This is true whether you're talking about someone stealing money from you at gunpoint or at the tip of pen. Leverage determines pay and productivity is largely irrelevant. Overlaps are coincidental.It is true that sometimes people who deserve more get more but that should not be confused with the belief that this is what happens most or even much of the time. The evidence simply doesn't support the idea of the connection being particularly frequent. The author tries to hide this by cherry picking the examples of superstar Athletes/Entertainers and corporate executives, but the difference between those two two groups and why they each get paid so much is vast and obvious.Athletes and Entertainers see their pay rates increase because they are the actual draw and, over time, the ones with enough power to force the issue will take a greater share of the income they create, none of which would exist without them. In other words, if Beyonce stopped showing up for concerts, the whole tour shuts down. No one keeps going to see her backup dancers. Beyonce is the show and the share of the money she gets should reflect that literally everyone but her is expendable.Executive pay, on the other hand, increases for the same reason that there are no term limits on Congress: if you let people vote on their own pay and job security, they will always vote to increase their end. If Jamie Dimon left Chase, no one would stop banking with Chase. There would be no run on the bank like there'd be a run on refund requests if Beyonce stopped showing up for concerts. Steve Jobs died and Apple has only grown since his death and he was perhaps the most revered CEO in history. It turns out that Executives are closer to place-holders than they are to being the actual show like athletes and entertainers are. They take all the benefit of everyone else's productivity increases because they are the ones that decide who gets more money and, naturally, their answer to who should get paid more is always "me and my executive friends." They do it because they can, not because they deserve it.Anyone claiming to teach you about economics who is unwilling to even acknowledge this massive difference is probably not telling you the truth on other things, too. In this case, he suggests that only executives get their pay increased even though productivity increases across the board because Susan Boyle sings songs and that's the same thing. I hope it's clear that this argument is not just incorrect but fundamentally disingenuous. Frankly, I find it hard to believe a career professional has not noticed this.This guy talks like he works for Rupert Murdoch.[Edit: After finishing the book, I checked out the author and (surprise!) he works for Rupert Murdoch. It shouldn't be so easy to smell these propagandists coming.]

  • Pang
    2019-04-25 09:41

    This was a great little book of economics - true to its title! The book covered some basic macroeconomics theories as well as some finance. I think it gave decent background info for those with no econ or finance background, but it definitely not for someone who wanted to have more details on the subject. I liked the fact that it ties a lot back to the current financial crisis with, in my opinion, unbiased point of view. It tried to present both sides of the coins. Bottom line is everything is unknown. The game changes depending on so many different factors. The system is complex and can be very fragile. One of many thoughts worth pondering: "Like the Fed's apparent success at taming the business cycle, its crisis-management skills may have lulled us into thinking the economy has become a safer, less violent place" (166). I actually would have like to see afterword with Ip's thoughts on what's going to happen with the current crisis.I also enjoyed his writing style. It made for fast reading, and it wasn't dull to read. He spun some humorous analogies in there, which made things easier to understand. For example, I liked the fact that he compared crises to viruses: "Having vaccinated everyone against whatever killed the last business cycle, they fail to spot the virus that infects the current one" (27). I knew most of the information covered in the book, but it still was refreshing to read it.We must have been the only kids in town whose weekly allowance was indexed to inflation (xxi).Every business expansion eventually dies. Only the cause of death changes (23).A central banker with dovish tendencies is like a wine critic who drinks Merlot out of a box. Nothing wrong with it, but best kept behind closed doors (148).(Money Quote) In Parliamentary systems, ... the Prime Minister draws up a budget and Parliament passes it. It's like a steak: a solid cut of meat that changes little between the cow and the dinner plate. The United States' budget is more like a sausage, a mixture of ground meat from different parts of the animal stuffed into a misshapen skin (183).... in 1947, finance accounted for 2.3 percent of GDP. By 2005, it was almost 8 percent. That's an awful lot of cake, and a lot of it was just sugary icing with no nutritional value: leveraged buyouts, speculative stock trading, and financial engineering whose pain purpose was to layer on more bets (213).

  • Christopher
    2019-04-01 08:44

    Suffers from a serious problem of masquerading as a relatively objective introduction, while the author seemingly can't help but interject his own biases. On several occasions, it is gallingly easy to spot examples of him framing something that worked well for an economy with a description of "free market," even though such a nebulous thing only exists in abstraction (and for which he never bothers to give a meaningful definition). Meanwhile, as quickly as a couple of sentences later when describing something bad that happened to the economy that could just as easily be described as being a product of the mythical "free market" to which he often refers, he'll avoid this descriptive phrasing in order to condition the reader into thinking that such an alleged "free market" couldn't have negative consequences. He also frequently makes off-hand remarks that would likely breeze by unnoticed in many cases, but which would actually really need a citation, such as claims about the Affordable Care Act's popularity (or rather claiming the lack thereof), which has demonstrated far from clear and consistent popularity in polling. In some cases, these oversights are relatively harmless. In others, it makes me skeptical of the author's intentions and professionalism.When talking about clearcut issues of fact, Ip does a fine job of explaining, but it seems to me that there is more editorializing than either the author intended or than this kind of introductory book should really contain.

  • Mazola1
    2019-04-12 07:32

    OK, this slim volume could be called Economics for Dummies. It tackles a bewilderlingly complex and arcane subject and tries to boil it down to a few simple essentials. No small task, especially for a little book. If you know any economics, it's probably too simple and you will probably disagree with parts of it. If know nothing about economics except that it's sometimes referred to as "the dismal science," it will probably make the subject seem a little less dismal. But it will also leave you thinking it's not a science at all. That's not to say that it doesn't achieve its objective. At times, it actually makes what can be a dry and boring subject interesting. The material is clearly presented, but clearly the subject matter is confusing and often contradictory. Hence, my favorite part of this book was the joke about the President who said he was going to start hiring only one armed people to be his economic advisors because all the ones he had so far kept following the advice they gave by saying "on the other hand..."

  • Justin
    2019-04-14 01:39

    At first, I thought this book might be a good refresher on economics. However, it was much more overtly political than I had hoped it would be. It seems that most economists cannot help but intersperse their opinions throughout the text. For someone who knows little about economics, this might be a bit over your head. For someone who deals in the business and finance world on a daily basis, as I do, this is not really a good refresher. I couldn't say I learned much - I had hoped for more stories to illustrate of macro and micro economic principles with less opinions from the author. I'm not saying I didn't agree with Mr. Ip's opinions, I'm just saying the book would have been better without them.

  • Jennifer
    2019-04-17 08:39

    This was a good summary of economics concepts, and I thought there were some pretty good examples and metaphors that helped to clarify the ideas. I can't say that I understood everything, but I understand more about economics than I did before reading this book, which I figure is a win. This seems like a good reference book for general terms and concepts.

  • Robert Sheard
    2019-04-10 06:39

    Reading in economics is never a load of fun, but I've had to give economics lectures a half-dozen times now and have come away from each one wishing I had a better way of boiling the subject down. Greg Ip's book does that amazingly well, and I'll definitely be recommending it to my students.

  • Matt
    2019-03-27 08:40

    I've read enough of these books now that I feel mostly confident saying this is a book about macroecominics-- which means, mostly, that there really isn't much math (which is good and bad), no demand curves and things like that. This means that there's none of that sexy freakanomics-behavioral economics that I think attracted me at first about these pop-economics stuff.That said, this book is good at understanding how all the different reports you hear about on NPR fit together, and how the information those reports contain affect public policy-- it is overall a very lucid precis of the economy on a national level, and is really impressive for peeling back the layers of all these elements of the economy, writ large, and how they fit together. I did miss the hesitation I found in more academic treatments of economics: Ip has no problem saying that gov't intervention is a problem for economic growth, without any concession that without intervention, we'd have five year olds sorting sausages in a meat packing plant. That felt a little odd to me, but it also made me think that this is a book my colleagues in the business college would recognize and respect. There's something to be said for that.I think, ultimately, this doesn't do quite enough to reach out to non-economists, or maybe more accurately non-free market boosters. But it is what it is, and at least it's a window into a world I otherwise don't really see.

  • Dan
    2019-04-24 03:42

    quick read. Great book for people who know little about economics. A bit advanced for the teabaggers.

  • Looly 1988
    2019-03-30 03:33

    الكتاب معقد جدا ويصلح للمختصين في مجال الاقتصاد وليس للقاريء العادي الذي لايملك خلفية عن هذا المجال

  • Jenny Thompson
    2019-04-21 05:47

    The economy is big and scary and I want nothing to do with it.

  • Vilmantas
    2019-04-25 06:30

    Complex financial terms and ideas explained in simple human language. From GDP, inflation, deflation, hyperinflation, indexes, business cycles, employment, natural unemployment, non accelerating inflation rate of unemployment, average salary, WTO, subsidy, dumping, budget deficit, fixed exchange rate, NEC, OMB, CEA, Fed, OCC, The Office of Thrift Supervision, FDIC, SEC, CFTC, FTC, monetary accommodation to manias, panics and crashes, VAT, national debt, Ginnie Mae, Fannie Mae, Freddie Mac, capital, liquidity, insolvency, stocks, bonds, credit default swaps and other types of derivatives. Author uses creative analogies, metaphors and real stories to captivate attention of his audience.

  • Artūras Ketlerius
    2019-03-29 05:36

    Puikiai tinka visiškai žaliems ekonomikoje. Tiems, kurie turi bent bazines žinias, knyga tikrai nebus labai naudinga.

  • Cameron
    2019-04-25 01:49

    Shorter, more understandable, and less biased than most economic primers I've read. Much of it was still over my head, but at least it's short enough that I can actually see myself reading it again.

  • Lauren Bielski
    2019-04-15 08:54

    Continually refer to this, especially now that all facts, trend data, and serious analysis are being called into question. Excellent reference book.

  • Victor
    2019-04-10 01:37

    A quick and incisive overview of how economics works in the US, including the whats and wherefores of the Fed!

  • Andrew
    2019-04-22 05:51

    This is a fantastic handy little primer on real-world economics. The book was published a year or so after the 2008 subprime mortgage crisis so it ties back many concepts and economic players to recent events in the the U.S. and world economy. I highly recommend this read; you won't break a sweat, I promise. There are some prescient insights by Greg Ip on unintended consequences of presidents meddling in the economy, and the impending political backlash against globalization and global trade.

  • Halik
    2019-04-03 08:49

    The global financial crisis got a lot of people interested in economics, or so the blurb for the book says. It must be true, judging by the sheer numbers of books alone that were published about the economy that enjoyed mass consumption. Some of them were crisis based spin-offs, while others, like this one by Greg Ip, aims to give a broad understanding of economics to the uninitiated.But economics itself, known as the dismal science, and derided as being uncertain by one American president who famously asked for a 'one handed economist' is a mercurial thing. Interpretations can vary, the subject can take on subtle differences when viewed through different perspectives and over-explanations of concepts can sometimes lead to confusion. Many books claiming to give an introduction of the subject to the uninitiated end up exhibiting one or more of the above faults and giving its opinion on what it thinks is good economics. Because inevitably, any discussion on economics, if it is to be kept linear and to the point, must take a side; be it, capitalist, interventionist, welfare, free market oriented or any combination of the above.Here's the part where you expect me to say that this book is miraculously different, that it is objective and gives a really good broad understanding of 'economics'. But really, it isn't. And that is no necessarily a bad thing. The subject is so broad that any author attempting to give a basic understanding of it will inevitably have to take a side or a particular angle. And Greg Ip, a long standing journalist at The Economist magazine, does this with alacrity.The first few chapters are a great introduction into Growth, Business Cycles and Recessions. He then goes on to talk about how effectively these phenomena can be tracked and followed (not very effectively, it turns out). He moves on to other key economic factors like employment inflation and deflation and globalization. These first chapters are objective and i thought gave a balanced understanding of matters. The next few chapters however got a bit jargon ridden and wordy as he began talking more specifically about US government and Federal Reserve involvement of the economy. His writing is engaging and fast paced. And manages to deal with would be boring elements of economic theory with wit and ease. He includes helpful summaries at the end of chapters that lay down in point form the most important things to remember. The book assumes a minimum of economic related knowledge on the part of the reader but i figure anyone who reads a bit of business news now an then will be able to easily grasp most of it. I was familiar with most of the concepts laid out but it was still very refreshing to read.Derivatives are one of the most maligned and least understood part of the financial system. They are the teenage boys of finance—energetic and full of potential but the first to be fingered when someone totals the car.There’s no single definition of a crisis—as a judge said of pornography, you know one when you see one.

  • Shawn
    2019-04-16 09:49

    What originally motivated me to read Greg Ip’s, “TheLittleBook ofEchonomics: How the Economy Works in the Real World,” was its inclusion in the Marine Corps Commandant’s Professional Reading List. I personally learned a lot about how the modern U.S. economy works, and I appreciated how Mr. Ip took the complex theories and systems the run our economy and explained them in an interesting and easy to understand manner. This is a book I know I will go back to in the future, especially after I read some economy related news article and want to better understanding of the economical nuances involved. However, I personally was a bit disappointed the book focused primarily on the intricacies of the modern U.S. Economy and that it did not provide a broader more general overview of basic economic principles not tied to one specific country or economy. Since the Banna Wars and up to Iraq and Afghanistan, Marines have found themselves in situations where they are tasked with developing the economies of local villages, town, and provinces, and a simple easy to understand guide on just how to effectively do this is something very much needed. While Mr. Ip’s book in my opinion did not quite fit that need, I still highly recommend it to anyone who wants to better understand the current U.S. economy and to better comprehend just what is going on when someone starts arguing about the latest economic report, or what they heard about in the news. (eBook)

  • Chris Maatouk
    2019-04-16 02:53

    I started this book then stopped but now decided to start it again over the Adha holiday. I am on chapter 13 and I think that people who do not like economics will not like this book. It is not a book with a plot, a character or any sort of story, but instead it is pretty much a book that teaches us about economics. So this is why I said if you do not care about how the economy works or have no interest what so ever in learning about economics, this is not the right book for you. On the other hand, if you want to major or are majoring or you are just interested in how the economy works, this is the perfect book for you. It is basically a book written by a very good writer whose name is Greg Ip, he is the Editor of the Economist magazine and uses his experience to teach about economy in a simple and short way. It is detailed and understandable without being too long and belaboring about random things. What I like is that even though the writer is American, one would expect him to be biased but he explains the economy worldwide, not just in America. I know a lot of it by learning in my economics class but there are still new things that I am discovering.

  • Brian
    2019-04-16 02:38

    This is a pretty no nonsense book about economics. Ip covers many facets of econ. From making money to making a mess of money.I tend to read mostly in Austrian thinking but this is a bit different, there were many things I tended to look sideways at because I have very little trust in bankers or the government. BTW this distrust came long before the 2008 meltdown.In the first 2/3s of the book I felt ambivalent. I wanted him to pull the trigger on the forces that run our economy, and while he did point a few fingers he never really lashed out. There may be good reasons but I was left wanting. This is not a knock really but something I like authors to do because it reveals their presuppositions to me. I loved the last 5 chapters. He goes over a lot of definitions of financial terms, using illustrations to help the layman get a grasp of the term. He shined lights on most if not all of the major problems with the financial meltdowns in the last 2-3 yrs. My advice would be read it if you are interested in why things happen in the financial world, good or bad.

  • William Ramsay
    2019-03-30 02:49

    Economics is a very complex subject. Just try understanding how the current recession started. This books makes the subject accessible. Greg Ip is the economic editor for Economist Magazine and intended the book as a primer on how the modern economy works. If you have ever wondered why people rave at the Federal Reserve and bemoan the excesses of Wall Street and Globalization, the book goes a long way toward enlightening you. The modern world runs on money and understanding how money works is essential to understanding why things are the way they are. There is no fluff in the book. Ip presents each subject in a clear statement of facts and makes it clear by analogy. Economics is a tangle. The book untangles it a bit.

  • David Zerangue
    2019-04-14 04:42

    This was an easy to read book on the economy. It was more centered on the US economy than the world economy, but that is appropriate as the US economy is still the biggest engine.There were a couple of chapters that I felt needed more explanation but this book was designed to touch on a vast number of subjects and provide a taste. So, I can't complain all that much. Obviously, I will be picking up additional books on those points I want to know more about.I highly recommend this book for any layperson. I even bet economists approve of the writing as well.

  • Eileen
    2019-04-26 03:28

    Whether you know nothing, or little, about economic theory, or even if you work in the field, this small book explains the real world applications in a manner easily understood by all. The best teachers are those capable of taking a subject feared, due to the complexity of its nature, by so many, and making it understandable to the masses. Mr. Ip succeeds in doing that in this book. What is complex in the many economic tomes we've come to avoid, is here clearly explained. This little book is full of 'ah-hah' moments.

  • Al Sevcik
    2019-04-11 06:34

    The book is presented as an introduction to economics, addressed to people who would like an overview of the subject. Maybe it does that. However, someone who already has even a simple understanding of economics will feel a lack of substance. The author avoids most controversial subjects and does not mention the differing economic theories. On the plus side, my edition of the book was published in 2013 so is able to address some fairly recent issues (as of 8/2014). It is written in an informal, easy to read style which make it a painless way to gain some familiarity with economics.

  • Zi Tong
    2019-03-30 08:50

    An interesting read, and great for anyone who wants a quick primer on broad economic issues. It's intended for a general audience with no detailed economics knowledge, although to be honest some of the terms and concepts used were still a little too complicated for me (which probably says more about me than the book!). Definite slant towards the U.S. since this is meant for an American audience, but still appropriate for readers elsewhere since the the U.S. economy has so much more influence on the global economy than anywhere else in the world.

  • Converse
    2019-04-10 07:39

    This short book is about macroeconomics, the study of issues that effect an entire economy, such as inflation and unemployment. It discussses the role of the Federal Reserve, banks and institutions that act like banks, the federal, state and local governments, and the stock, bond, and futures markerts. It gives useful explanations of what gross domestic product is, and the several different ways one might measure inflations.

  • Rachel
    2019-04-07 03:28

    Excellent and very readable primer on economics. I listen to NPR's Planet Money podcast, and this reminded me of a a condensed version of that. If I had to knock it, it doesn't always define terms. For example, it mentions commercial paper in a few places without explaining it (it's a very short-term security issued by large banks and companies to cover short-term debt. Kind of like a payday loan. Thank you, Planet Money)But an excellent, quick read on a very dense, complicated topic.

  • Janeal
    2019-03-27 07:29

    I am a nerd, I know. I just find financial stuff so interesting. Downloaded this to listen to while mowing the lawn since nothing else was available. Interesting. I felt like I would have learned more if I was actually reading it and taking notes and really trying to digest it all. While listening I was prone to daydreaming and not paying attention so even though the author tries to simplify our country's economic system, it is still wildly complex and I had difficulty understanding it all.