The Best Books To Read On Economics

Given below are some of the best books to read on economics. If you find yourself pinched for time, you can read free book summaries or listen to free audiobook summaries.

Freakonomics

This book talks about incentives, its three types- moral, economic, and social; the distribution of information in a transaction; human biases on the assessment of risk and casualty as well as the implications of these issues on people and the world at large.

One major issue of incentives is the effect incentives have on people’s conscience. Though it might seem simple at a glance, it can lead to unintended complications. Secondly, prudence is required while placing incentives. It differs on people and also on circumstances.

When it comes to the distribution of information, due to ‘information asymmetry’, experts can sometimes mislead or misinform clients thereby earning profits. However, these can be prevented if we keep ourselves abreast of our issue.

Major issues when it comes to assessing risks and casualties, people often worry unnecessarily about risks that are beyond their control. And people tend to overlook remote causes for nearer ones while attributing casualties.

These are a few of the important issues that this book talks about.

The Shock Doctrine

This book talks about the crisis, about economic interventions and draws a parallel of these interventions with electroshock therapy amongst many others.

The author first explained how organisations used the crisis as their foothold and with the help of economic shock therapy to create opportunities for themselves. One such example given was the ‘Chicago Boys’.

Secondly, he explains how the economic shock therapy benefits only the wealthier class of people and multinational corporations at everyone else’s expense.

Thirdly, economic shock therapy can lead to poverty and a downtrodden and terrified population.

Fourthly, this book shows the sinister side of the time when Western nations learned that denying aid to countries that were struggling economically, forced them to open their markets.

Fault lines

This book on the financial crisis, especially the financial crisis of 2008 and the fault lines that were rife in the economy of the entire world. These fault lines were responsible for the crisis. The author in the book describes these fault lines. Some of these faultlines were;

Firstly, economic equality because countries, especially the US were unable to meet the growing labour demands in the market.

Secondly, when it came to the American economy, they were absorbing a surplus of export goods as well as investments which caused it to overstimulate.

Thirdly, old models mostly relied on financial models to predict the future. But the new scenery of the economy was unprecedented and people have no basis to rely on.

Fourthly, the problem of incentives and the lack of risk management.

The author provides us solutions in the form of better schooling and building social safety nets. These are what he believes to be the underlying problem in several issues. Futhermore he suggests that to attain long-term stability of the financial sector, taking risks irresponsibly needs to be curbed.

These were some of the unidentified but very dangerous issues or fault lines that proved detrimental for the economy and pushed it towards depression.

Thus, from these books, we can learn much about some prevailing economic issues and how to prevent them.

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