- Hardcover: 320 pages
- Publisher: Wallace Press; 1st edition (August 1, 2017)
- Language: English
- ISBN-10: 0998141011
- ISBN-13: 978-0998141015
- Package Dimensions: 10 x 7.5 x 1.5 inches
- Shipping Weight: 1.7 pounds
- Average Customer Review: 2 customer reviews
- Amazon Best Sellers Rank: #921,019 in Books (See Top 100 in Books)
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Economics for Independent Thinkers Hardcover – August 1, 2017
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"A profoundly insightful book that emphasizes the importance of credit and banks in business cycles, issues that are conveniently assumed away in most empirical macroeconomic models, including those used by central banks. Although a self-taught outsider with a remarkably broad knowledge of the intellectual history of economics, Nevins gives entirely new and different perspectives on the central policy issues of the day, including Keynesian stimulus and debt. . . . Students struggling with the lack of realism in core Keynesian and classical models will find this book both richly informative and, frankly, cathartic. And it is written in an engaging and clear style that will be accessible to anyone."
--Harvard University's Kenneth Rogoff, coauthor of This Time is Different and author of The Curse of Cash
"[M]akes a great read for anyone that is remotely concerned with economic developments. . . . Nevins' book should be on the reading list of most wealth management practitioners, particularly if they are not themselves trained economists."
--Jean Brunel, editor of the Journal of Wealth Management and author of Goals-Based Wealth Management
"I strongly recommend Nevins' book for a no-nonsense approach to economics. Traditional textbooks tend to ignore moral hazard problems that occur in the real world, but Nevins' book tackles these problems head on. For example, the credit cycle (that produced winners and losers) and the general misconceptions of the government's role in getting the U.S. out of the Great Depression (rather, government policies delayed recovery and extended the Depression longer than it should have taken for a recovery). . . . Highly recommend for the casual economics sleuth or even as a supporting economics or finance textbook."
--George Mason University's Anthony Sanders, author of the Confounded Interest blog
"Economics for Independent Thinkers provides an economic framework for improving investment decisions."
--Brenda Jubin for ValueWalk
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However, those looking for a formula to make forecasts, for business or investments, will be disappointed. Oh, the formula is in the book, but it’s weak, based more on specific periods of economic history than a comprehensive empirical evaluation. On the plus side, there really is no formula, not in any of the books that claim to have one, so the reader is no worse off than having picked another random book.
Here are some interesting points from the book:
Nevins chides economists for ignoring the strand of thought that emphasizes the potential for financial panics, citing a 1989 symposium that Paul Samuelson attended with Hyman Minsky. After the 2008-09 recession, it seems obvious that Minksy should not have been ignored. But most of the time, he should be ignored. The doom-and-gloomers were citing Minsky every year for decades before the financial crisis. You would have missed many great business and investment opportunities if you had worried as much as Minsky did. The lesson I’ll accept is that there is a time to pay attention to financial risks, but it’s not every year. (In the same chapter, by the way, Nevins gets bank loans and money supply creation wrong, one of his rare mistakes.)
A valid critique of mainstream economists is that we gravitate toward models that have mathematical solutions. What he is saying is that I might have two good hypotheses. If one has math that I can handle, I work on that model. If the other hypothesis is unsolvable, then I ignore it. So these choices are not made based on how closely the models reflect reality, but how closely they reflect tractable mathematics.
The Economic Checkup chapter is useful, not because it’s perfect but because he argues for looking at a fixed set of economic indicators regularly. I don’t recall him writing about confirmation bias, but that’s the common result from scanning the news—we remember items that confirm our beliefs, forget the rest, and thereby take a big risk. Having a set of indicators, whether Nevins’ or someone else’s, is valuable.
The only omission that popped to my mind is Kydland and Prescott’s work on real business cycles. That’s deserving of some attention.
One of my criticisms is described by Nevins as applying to others: “…painting your adversaries as lunatics is usually a good way to end the dialog and settle back into your comfort zone.” Yet he does it repeatedly to mainstream economists.