Tag: summer reading

A Remarkable Fact

Continuing our string of posts about the EU, here is a remarkable but perhaps unsurprising fact:  Since gaining its independence in 1829, Greece has defaulted on or rescheduled its external debt five times (1826, 1843, 1860, 1893, and 1932).  Greece has been in default roughly half the time period since 1829.

That is culled from the astonishing This Time is Different: Eight Centuries of Financial Folly from Carmen Reinhart and Ken Rogoff.

I’m finally plowing through some of summer reading recommendations.  This particular recommendation was from 2010.

Thoughts on The Big Short

I finished up Michael Lewis‘s The Big Short and I think I found it worthwhile and poignant.   It’s a character-driven piece that follows some of the players — as the title suggests — who shorted the housing market and went to the bank.  To Lewis’s credit, he seems to do a pretty good job of explaining the crazy financial instruments created and deployed to bet against subprime mortgages.  To my debit (?), I still don’t understand what was going on with all of this.

The big villains of the story are certainly the ratings agencies, who could have stopped much of this chicanery in its tracks by rating garbage as garbage rather than as AAA investment-grade bonds.  But, perhaps a pithier point comes in the book’s denouement and is worth quoting at some length:

The people on the short side of the subprime mortage market had gambled with odds in their favor. The people on the other side — the entire financial system, essentially — had gambled with odss against them. Up to this point, the story could not be simpler. What’s strange and complicated about it, however, is that pretty much all the important people on both sides of the gamble left the table rich… Continue reading Thoughts on The Big Short

Old School Essay and Book Recommendation (Summer Reading, Part 3)

In a piece dear to the hearts of all my Econ 300 students, Master of rhetoric Deidre McCloskey lays out the case for teaching old school, Chicago economics.  Although I certainly beat the maximize! drum, the central intuition is certainly that profits drive economic activity in the long run. McCloskey traces the historical context back to Adam Smith:

The core of Smithian economics, further, is not Max U. It is entry and exit, and is Smith’s distinctive contribution to social science… He was the first to ask what happens in the long run when people respond to desired opportunities. Smith for example argues in detail that wage-plus-conditions will equalize among occupations, in the long run, by entry and exit. At any rate they will equalize unless schemes such as the English Laws of Settlement, or excessive apprenticeships, intervene. Capital, too, will find its own level, and its returns will be thereby equalized, he said at length, unless imperial protections intervene.

The essay is interesting throughout, and I certainly approve of her message on this point.

If you like the rhetoric of this piece, you might consider checking out some of McCloskey’s  other works, as she is indeed a prolific writer.  One recent add to my summer reading list is her update of The Rhetoric of Economics. In it, she argues that “economics is literary,” and that making a persuasive case is “done by human arguments, not godlike Proof.”

This is one of McCloskey’s continuing projects. This one began with her work in the 1980s, and continues to be discussed today. The preface to the second edition, in fact, begins with a discussion of why more people didn’t read past chapter 3 in the first edition.

Summer Reading, Part 2

I am not sure what I’ll be reading this summer, but I’m happy to share some of my candidates for summer reading. In any case, these might be worth considering for your summer reading list.

I have been interested in information theory for some time, and James Gleick’s The Information: A History, A Theory, A Flood looks like great summer reading. It is accessible and broad-ranging, as far as I can tell so far. If you are interested in the technical details, something like the Elements of Information Theory by Thomas Cover and Joy Thomas will help.

I heard Larry Robertson talk about entrepreneurship at a symposium this year, and I was very impressed by how he approached the topic. So, I am interested in learning more about his approach from his book, A Deliberate Pause: Entrepreneurship and Its Moment in Human Progress.

When countries are ranked according to how important a role entrepreneurship plays in their economies, Israel almost always comes out near the top. In their book Start-Up Nation: The Story of Israel’s Economic Miracle, Dan Senor and Saul Singer look at the possible reasons. I am half-way through the book, and I like how the authors try to offer as nuanced a view as they can. In searching for reasons, it is often tempting to run with a “simple” cultural explanation. While culture certainly must play a role,  there are many other important factors, sometimes interacting with culture. I am especially interested in how government policy has enabled the blossoming of entrepreneurial ventures.

Following my interest in entrepreneurship in the arts, I hope to get to Why Are Artists Poor? The Exceptional Economy of the Arts, by Hans Abbing. The author is both an artist and an economist, so I am hoping for some really well-informed and rigorous analysis.

Moving on to innovation, I can’t wait to read Inside Real Innovation by Fitzgerald, Wankerl and Schramm. Professor Brandenberger has built up my expectations quite a bit through his enthusiastic summary of some of the main arguments, including the emphasis on the non-linearity of the process of innovation.

Well, if you get to any of those, let me know what you think. I will definitely read something more literary as well, but I am really not sure what that will be. In addition, I hope I’ll have a chance to listen to some great live music every now and then, and I wish you the same.

Summer Reading, Part 1

Now that Commencement has passed, we can get on with our summers.  For me, that means I can try to take a bite out of the big, tasty stack of books I have been accumulating over the past 9 months.

These are my picks:

Michael Lewis, The Big Short.  Almost anything by Lewis is fun to read.  I was plussed* by the series he did for Vanity Fair, and recommend those highly. Last year we read his classic, Moneyball.

Peter Drucker, Innovation & Entrepreneurship.  This summer’s Reading Group pick.

Tim Harford, Adapt: Why Success Always Starts with Failure. Harford writes beautifully (well, for a guy on the economics beat) and his explanations are generally lucid, convincing, and theoretically sound.  More on Harford here.

Daniel Okrent, Last Call.  Tyler Cowen calls this history of U.S. prohibition “a masterpiece.” I am interested in the causes and consequences of criminalization of drugs and alcohol, and I am guessing excerpts of this will end up on my political economy reading list. Perhaps a course on the subject?

Ron Howard and Clint Korver, Ethics (for the real world): Creating a Personal Code to Guide Decisions in Work and Life.  Howard is considered the father of decision science by many (and founder of the purple balls!). Korver is a successful entrepreneur and fellow Grinnell alum! I like this quote on “ethical dilemmas,” which they say is often fundamentally misunderstood:

“When we pick up just about any newspaper, we read about people caught in ‘ethical dilemmas.’ But nine times out of ten, they are not dilemmas at all. They are conflicts between prudential gain and ethical action. They are issues of temptation.” (p. 38).


Philip Mirowski, Science Mart: Privatizing American Science. This looks like a clear winner. A historian I sometimes fraternize with is excited about this one, and I hear that “Mirowski is a wild man.” Let’s hope so. Expect to see this in Econ 450.

F.A. Hayek, The Road to Serfdom.  Following the Schumpeter Roundtable and Discovering Kirzner, we are picking up Hayek this fall as our department reading pick.

Jonathan Franzen, Freedom. Well, I am going to be on the beach for a week.

*It’s possible that “plussed” isn’t a word.  Perhaps it should be.

(Not so) Undercover Economist

The Undercover Economist, Tim Harford, is all over the internets these days.  He has just come out with a new book, Adapt: Why Success Always Starts with Failure — a meme no doubt familiar to the Pursuit of Innovation crowd.  Beginning Monday, you can hear an extended discussion about the book over at our favorite economics podcast,  Econtalk. I have penciled this one in on my summer reading list.

Harford also recently named his top five books that give unexpected lessons in economic principles, a list that included Klein & Bauman’s Cartoon Guide to Economics (my intro textbook!), Charles Perrow’s classic, Normal Accidents, and Cory Doctorow’s For the Win, a book that should “appeal to any enthusiastic player of MMO [Massively Multiplayer Online] games.”  Huh.

Undercover. Unexpected.  Un for the whole family.

The Price is Right? UPDATED, TWICE!

The Summer marches on, and that means it’s time for some more summer reading. My recommendation this week is from George Mason economist and Marginal Revolution blogger extraordinaire, Tyler Cowen.  His latest book is The Age of the Infovore.

So, I was poised to pick up a copy for my wife at Amazon for what seemed to be a bargain price of $10.88, but then noticed that the hardcover version, Create Your Own Economy, was selling for only $4.64.   It’s the same book, but the title changed when the paperback edition was released.

But then I thought, maybe she’d want the Kindle version instead.  But the Kindle edition of Create Your Own Economy is $12.99, whereas the Kindle for The Age of the Inforvore is $9.99.  Huh. So I’m paying a premium for a Kindle version of a hardcover version of the book, but I enjoy a steep discount if I actually purchase the hardcover.

Then I thought, well, maybe I’ll get her some perfume.

I think Yoram Bauman is right – choices are bad.

UPDATE: I sent this pricing info to Professor Cowen and he sent me a copy of his book with the inscription, “How is $0.00 for a price?”  Thanks!

UPDATE 2: While trolling the EconTalk archives, I came across an episode of Roberts and Cowen talking about the book.

Can You Think of a Radical Idea to End Poverty?

Guess Again
Think Again

What’s the best idea out there to reduce poverty and improve urban life? Well, Paul Romer thinks a big part of the answer is his charter city idea.  What’s the charter city idea, you ask?  I’m not sure, actually. Professor Finkler has been on me to read about it, and I may finally take him up on it, as the new issue of The Atlantic has a feature piece, “The Politically Incorrect Guide to Ending Poverty.”

How’s that for a provocative title?

The article of course profiles Romer, who is by any account a fascinating character.

In the 1990s, Paul Romer revolutionized economics. In the aughts, he became rich as a software entrepreneur. Now he’s trying to help the poorest countries grow rich—by convincing them to establish foreign-run “charter cities” within their borders. Romer’s idea is unconventional, even neo-colonial—the best analogy is Britain’s historic lease of Hong Kong. And against all odds, he just might make it happen.

We’ll see.

In addition to charter cities and making Aplia happen, Romer is also the hero of David Warsh’s Knowledge and the Wealth of Nations: A Story of Economic Discovery.  The first half of the book is a short course in the history of economic thought; the second is an accounting of Romer’s role in launching endogenous growth theory. Both halfs are well worth reading.

Summer Reading Opportunity

With the previous post, Professor Galambos has kicked off this year’s LU Economics Summer Reading Fun, or something like that.  Any student (or colleague, or alum) interested in reviewing a book related to economics or LU economics is welcome to submit a book review that we will post right here on the blog.

Here are some suggestions that I am very interested in learning about, but likely won’t read myself:

Brad DeLong and Stephen Cohen, The End of Influence: What Happens When Other Countries Have the Money?

When you have the money–and “you” are a big, economically and culturally vital nation–you get more than just a higher standard of living for your citizens. You get power and influence, and a much-enhanced ability to act out. When the money drains out, you can maintain the edge in living standards of your citizens for a considerable time (as long as others are willing to hold your growing debts and pile interest payments on top). But you lose power, especially the power to ignore others, quite quickly–though, hopefully, in quiet, nonconfrontational ways. An you lose influence–the ability to have your wishes, ideas, and folkways willingly accepted, eagerly copied, and absorbed into daily life by others. As with good parenting, you hope that by the time this happens those ideas and ways have been so thoroughly integrated that they have become part of what is normal and regular abroad as well as at home; sometimes, of course, they don’t. In either case, the end is inevitable: you must become, recognize that you have become, and act like a normal country. For America, this will be a shock: American has not been a normal country for a long, long time.

Continue reading Summer Reading Opportunity

Summer reading

My summer reading list will definitely include The Devil in the White City, by Erik Larson. It is the story of two men, one who headed the design and the construction of the 1893 World’s Columbian Exhibition, famed Chicago architect Daniel Burnham, and one who

murdered a dozen or so of the visitors to that once-in-a-century sensation. The book is completely fact-based, and paints a vivid picture of end-of-century Chicago. The exhibition was Columbian because it commemorated the 400th anniversary of Columbus’s “discovery” of America. It had to be better than the 1889 world fair in France, which gave them the Eiffel tower. Of course, little did they know that the 1896 World Fair in Budapest would trump them all. (That was to commemorate the 1000th anniversary of the Magyar hordes invading the Carpathian basin. Though important to Hungarians, it was not  even in the same ballpark as Chicago’s.)