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The Little Book of Economics: How the Economy Works in the Real World (Little Books. Big Profits) Hardcover – September 7, 2010


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Product Details

  • Series: Little Books. Big Profits (Book 28)
  • Hardcover: 272 pages
  • Publisher: Wiley; 1 edition (September 7, 2010)
  • Language: English
  • ISBN-10: 0470621664
  • ISBN-13: 978-0470621660
  • Product Dimensions: 5.4 x 1 x 7.4 inches
  • Shipping Weight: 9.9 ounces
  • Average Customer Review: 4.4 out of 5 stars  See all reviews (51 customer reviews)
  • Amazon Best Sellers Rank: #406,327 in Books (See Top 100 in Books)

Editorial Reviews

Review

"A guide to understanding 'the dismal science' and how economic concepts and institutions affect our daily lives" (The Economist, December 2010)

"...a must read in economic literacy." (USA Today, November 29, 2010)

"Finally, an economics book that is neither dull nor inscrutable and that won't put you to sleep. Greg Ip gives us a lucid and entertaining understanding of 'the dismal science' and reveals how economic concepts and institutions affect our daily lives. This little gem can turn all of us into sophisticated and educated citizens."
Burton G. Malkiel, Professor of Economics, Princeton University; author of A Random Walk Down Wall Street and The Elements of Investing

"Greg Ip is one of the world's best economic journalists. The Little Book of Economics will teach you much more than a little about the forces that shape all of our lives."
N. Gregory Mankiw, Professor of Economics, Harvard University; author of Principles of Economics

"Here's the perfect way to understand the economy without breaking a sweat. Clearly written and easy to understand, The Little Book of Economics guides you through what you need to know. Ip's bright light illuminates places previously darkened by insider jargon and arcane formulae."
Robert B. Reich, Professor of Public Policy, University of California, Berkeley; former U.S. Secretary of Labor

"The book is an excellent introduction to basic economic concepts and ideas explained in clear and thoughtful ways. A must read in economic literacy." "
Nouriel Roubini, Professor of Economics, New York University; Co-founder and Chairman of Roubini Global Economics

"Greg Ip has the rare talent of making even the toughest topics easy to understand. In The Little of Book of Economics, he tells you what you need to know with superb clarity and memorable examples. I recommend this book to anyone who wants a clear explanation of how the forces of economics shape the world."
Michael J. Mauboussin, Chief Investment Strategist, Legg Mason Capital Management; Author of Think Twice

From the Inside Flap

After the global financial panic and recession of 2007–2009, you don't have to be president or a hedge fund manager to know that "It's the economy, stupid." Yet while the economy dominates the headlines, how it works and who influences it remain a mystery to most people. In The Little Book of Economics, Greg Ip, an award-winning journalist renowned for making complex economics easy to understand, walks you through how the economy really works. You'll learn:
  • How psychology and the Federal Reserve drive business cycles
  • How a financial crisis can transform a recession into a depression
  • The surprising effects of fertility rates, lawyers, and ideas on economic growth
  • Whether the United States faces a lost decade like Japan did in the 1990s
  • The causes of inflation, how it destabilizes society, and why deflation is even worse
  • How government debt can sometimes help end a recession but, other times, bring on disaster—and how to tell the difference
  • The symptoms of financial crises and why they often occur in election years
  • What goes on inside the Federal Reserve, what it does when interest rates are zero, and why its power to print money has made it the world's financial fireman

You can't understand the American economy without recognizing the growing influence of the rest of the world. So The Little Book of Economics digs into globalization, how it made America's mortgage crisis possible, how it's exploited by China to spur growth, and how it makes the United States richer even as it widens the gap between winners and losers.

One side effect of the deepest economic downturn since the Great Depression is that it has ignited a fresh desire among citizens and investors to better understand the economy. The Little Book of Economics is an accessible, engaging, and entertaining guide to all of the wonderful and wicked ways in which the economy functions and what it all means to you.


More About the Author

I am the U.S. Economics Editor for The Economist magazine, based in Washington, DC. I've spent two decades in financial and economic journalism, including 11 years at the Wall Street Journal in both New York and Washington and before that stints at The Financial Post and The Globe and Mail in Canada. I've appeared on television and radio, including National Public Radio,PBS, CNN, CNBC, and MSNBC. I've won or shared in several prizes for reporting. I graduated from Carleton University in Ottawa, Canada, with a degree in economics and journalism, and now I live in Bethesda, Maryland.

I was introduced to economics as a child. My mother, a practicing economist, now retired, delighted in trying to apply what she knew about the dismal science to her four children's upbringing. We must have been the only kids in town whose weekly allowance was indexed to inflation. I took economics in college, though not intending to write about it; I just wanted a fallback in case journalism didn't work out. Right out of college, I joined a metropolitan daily newspaper that put me on the night shift covering local politics, crime, and the like, a lot of which never made it into the paper. The business section, however, had lots of space in it and regular hours, so I got a transfer. Soon, I was writing about the economy and the markets, and loving it.

In the process, I discovered a chasm between the economics taught in college and the real world. Textbooks go on about the money supply but it turns out central banks ignore it. Simple questions like "how big is the national debt?" have complicated answers. I learned about fiscal policy but not about debt crises. So I wrote The Little Book of Economics with those lessons in mind.

Customer Reviews

Love the book, but missing about 30 pages in the middle....weird.
Cindy D. Powell
I would highly recommend this book to anyone who wants to brush up on economics or supplement economic theory with some helpful explanations.
Gordon
Greg Ip's Little Book of Economics frames current economic issues in an easy to read and understandable fashion.
Ray

Most Helpful Customer Reviews

82 of 84 people found the following review helpful By Ray on September 30, 2010
Format: Hardcover Verified Purchase
Greg Ip's Little Book of Economics frames current economic issues in an
easy to read and understandable fashion. It combines economic theory
with real world conditions. Ip provides context to the credit market
crisis, the Great Recession, and to the painfully high unemployment of
recent years. The book also explains in a non-technical fashion the role
of the Federal Reserve, the factors that are considered in the
formulation of policy, and the many unconventional policies of the
Federal Reserve employed during the crisis. I have assigned this book to
my Money & Banking class at Rutgers as a complement to the regular text.
Feedback from the students has been uniformly favorable. I strongly
recommend The Little book of Economics for those with an interest in
connecting the dots between theory and practice, for students who
are looking for purpose in economic theory, and for the more general
reader looking for the forest beyond the financial news trees.
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32 of 34 people found the following review helpful By Richard Stewart on September 27, 2010
Format: Hardcover Verified Purchase
As someone with a degree in Economics who hasn't worked in the field as directly as Greg Ip, I found this book to be a great review of topics I had long forgotten about. Please don't confuse this with a textbook or a deep dive into any topic. It is to Economics what a cross-country flight is to geography. A lot of overview. A lot of great scenery. You will likely find a topic or two you want to delve in to deeper. Oh, and it takes about as long to read.

Thanks Greg.
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34 of 38 people found the following review helpful By Eric Crampton on May 6, 2011
Format: Kindle Edition Verified Purchase
The content is quite good, albeit very basic. It's really a great US-centric introduction to the basics of economics. The other reviews cover the material quite well, I wanted to mention the Kindle formatting.

It's really bad.

For example, the book has an index. That's nice. But, the index isn't linked to the actual pages, so it's just a list of words. Not much point to that. You can use Kindle's search feature, but come on, just make the index work like it should.

Some tables, like Table 13.1 "How Big is the National Debt?" are painful to read. Some words are cutoff, and the table spans a page break, meaning you have to repeatedly page forwards to read the entries and backwards to read the column headings.

At the end of each chapter is a section entitled "The Bottom Line" which gives a quite bulleted summary of the chapter. It's nice, but the formatting is horrible. The left quarter of the page is whitespace, making the lines short and tiring to read.

Speaking of whitespace, the spacing is bizarre throughout the text, with large blocks of vertical whitespace appearing for no good reason.

I could go on and on with examples. It's clear they just did a quick and dirty conversion of whatever they had to the Kindle and said "ship it".

Maybe I'm just being picky about the formatting. If this was a free download, I wouldn't complain a bit, but for the price of the book (it's almost as expensive on the Kindle as the printed copy), I expect proper editing and formatting.
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21 of 22 people found the following review helpful By Len Burman on September 24, 2010
Format: Hardcover
The Little Book of Economics is engaging and interesting and written at a level that is perfect for students without much economics background. It gives them a basic understanding of the drivers of the economy and the effects of government policies. As an economist, I'd love to use the IS-LM and aggregate supply and demand framework, but I know from experience that economic models confuse and frighten some Masters in Public Administration [MPA] students. My students can get what they need without the math from Greg's book.
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15 of 15 people found the following review helpful By Irfan A. Alvi TOP 500 REVIEWERVINE VOICE on March 4, 2011
Format: Hardcover
Most of us need to have at least a basic understanding of how the economy works, and this book serves as an excellent overview for that purpose. The level of detail is more than adequate to meet the needs of most people, yet the book is also quite clear and easy to read. Here's my summary of the key points from the book:

(1) Economic output depends on population size and productivity.

(2) Productivity depends on capital and ideas. Real pay (after inflation) of employees depends on productivity, although pay inequalities have increased in recent decades due to factors unrelated to productivity (arguably a flaw of capitalism).

(3) Increase in available capital for investment requires savings (rather than consumption of all output). Business investment is primarily driven by sales outlook (expectations).

(4) Quality government can foster productivity by directing output into investment capital, supporting education and training, enforcing rule of law, and preventing monopolies.

(5) Competition (eg, via reasonably free markets) can foster copying of good ideas and development of better ideas.

(6) An annual productivity growth rate averaging 2% to 3% is considered sustainable for the US. Economic growth has tended to be faster under Democratic rather than Republican presidents (though this doesn't prove causality).

(7) Even economies with long-term growth invariably experience shorter-term cycles of expansion and recession, with recessions usually being more acute than expansions. Such cycles are usually driven by imbalances due to unrealistic expectations (both optimistic and pessimistic), often involving positive feedback processes and leverage. Cycles average 4 or 5 years, and range from about 2 to 10 years.
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