Course readings


I  recommend these readings as entertainment and not punishment. I am conscious that most of my students do not intend to forge an academic career, and therefore my aim isn’t to develop technical capabilities, but to confront intuition and stimulate interest. I am continuously updating this list, so please let me know what you think.

An asterix (*) denotes the key reading.

1. Incentives matter

*Becker, G.S., 1992 “The Economic Way of Looking at Life” Nobel Prize Lecture

Friedman, David, 1995 “Rational Criminals and Profit-Maximizing Police: Gary Becker’s Contribution to the Economic Analysis of Law and Law Enforcement,” in The New Economics of Human Behavior, by Mariano Tommasi and Kathryn Ierulli, editors, Cambridge University Press (pp. 43-58)

Smith, Peter, 1995 “On the unintended consequences of publishing performance data in the public sector” International Journal of Public Administration, 18(2-3):277-310

Hope, J. and Fraser, R., 2003 “New Ways of Setting Rewards: The Beyond Budgeting ModelCalifornia Management Review 45(2):104-119

Runciman, David, 2012 “Everybody gets popped” London Review of Books 34(22)

Wilkinson, Will, “Have you no respect for the law (of demand)?!” Cato at Liberty, June 16th 2008

Watters, Ethan, “We aren’t the world” Pacific Standard, February 25th 2013

Harford, T., 2016 “Incentives” Ch 6 in Messy


2. Cost and choice

Bastiat, Frederic (1850) “The Broken Window” (Part I of That Which is Seen and That Which is Not Seen)

*Drucker, Peter (1995), “The Information Executives Truly NeedHarvard Business Review Vol 73, Issue 1, pp.54-62

Steele, Jeffrey, “The Origins of EVA”, Chicago Booth Magazine, Summer 1998

Tate, R., “Marissa Mayer is bringing back the internet portal. Here’s why”, May 2013

Bradley, C., Hirt, M., and Smit, S., “Strategy to beat the odds” McKinsey Quarterly, February 2018


3. Market exchange

Binmore, K., and Klemperer, P., (2002) “The Biggest Auction Ever: the Sale of the British 3G Telecom Licenses” Economic Journal, 112, pp. C74-C96

The Bidding game, National Academy of Sciences, March 2003

Akerlof, G.A., (2001) “Writing the “The Market for ‘Lemons'”: A Personal and Interpretive Essay” Nobel essay

Secrets and agents“, The Economist, July 23rd 2016

Tabarrok, A., and Cowen, T., “The End of Asymmetric Information” Cato Unbound, April 6th 2015

*Coase, Ronald H., “The Federal Communications Commission” Journal of Law and Economics, Vol. 2 (Oct., 1959), pp.1-40

Dolan, E., “Case Study in Supply and Demand: Why Olive Oil, Good for the Body, is Becoming Hard on the Pocket Book“, Feb 5th 2013

Postrel, V., “Here’s Looking at You, Kidney” Texas Monthly, June 2006

Roth, Alvin E., “Art of designing markets“, Harvard Business Review, Oct 1st 2007

Rustici, Thomas, (1985) “A Public Choice View of the Minimum Wage” Cato Journal, 5(1):103-131


4. Prices and economic calculation

Dye, Renee, “The promise of prediction markets: a roundtable” McKinsey Quarterly, 2008

Basker, Emek “Does Wall-Mart sell inferior goods?“, Economic Inquiry, December 7th 2009

Foss, N., “The theory of the firm: an introduction to themes and contributions” (in ‘The theory of the firm: critical perspectives in economic organisation’, London: Routledge)

Hayek, Freidrich (1945) “The Use of Knowledge in Society”, American Economic Review 35(4):519-530

*Malone, Thomas W., “Bringing the Market Inside” Harvard Business Review, April 2004

Marn, Roegner and Zawada, “Pricing new products”, The McKinsey Quarterly Issue 3, 2003

Harford, T., “Minibar Economics: Why you should stay at hotels that overcharge for drinks and Wi-Fi access” Slate, February 2007

Munger, Michael, “Bosses don’t wear bunny slippers: If markets are so great why are there firms?” Library of Economics and Liberty, January 7th 2008

Whyte, Jamie, “Strippers can show us bankers’ just rewards” City AM, January 25th 2012

Foss, Nicolai J., and Klein, Peter G., “Why managers still matter” Sloan Management Review, Fall 2014

Fisman, R. and Sullivan, T., 2013, “What Management is Good For” (Chapter 5) in The Org: The Underlying Logic of the Office, Twelve

Spence, Peter “Why Uber was right to triple its fares during London’s tube strike” Daily Telegraph, July 9th 2015

McAfee, Preston “Price Discrimination“, in 1 Issues in Competition Law and Policy 465 (ABA Section of Antitrust Law 2008)

Kiviat, Barbara, “The End Of Management?” Time Magazine, July 6th 2004


5. Competition and the market process

Coase, Ronald H. 1946 “The Marginal Cost Controversy.” Economica 13: 169-82

Kirzner, Israel M. 1997 “Entrepreneurial Discovery and the Competitive Market Process: An Austrian Approach” Journal of Economic Literature 35:60-85

McNulty, Paul J. 1968 “Economic Theory and the Meaning of Competition” The Quarterly Journal of Economics 82(4):639-656

Ruddick, G., “Is Aldi doing to Tesco what Ryanair did to British Airways?” Daily Telegraph, February 13th 2014

*Sautet, Frederic, The shaky foundations of competition lawNew Zealand Law Review June 2007

Video: The Five Competitive Forces That Shape Strategy, Harvard Business Review, June 2008


6. Capital theory and recalculation

Cowen, Tyler and Lemke, Jayme “10 percent unemployment forever?” Foreign Policy, January 5th 2011

*James, David N., (2002) “The Trouble I’ve Seen“, Harvard Business Review

Tucker, J.A., “Advice to young, unemployed workers” The Freeman,  May 16th 2013

Newman, R., “10 products that boomed during the recession” US News, October 20th 2009

Harford, T., “Zombie companies walk among us” February 23rd 2018


7. Public finance

All Eyes on Slovakia’s Flat Tax” Harvard Business School Q&A, April 2007

Acemoglu, Daron, “Epilogue: Mechanics and Causes of Economic Growth” in Acemoglu, D., (Ed) 2009, Introduction to Modern Growth, Princeton University Press

*Cowen, Tyler “It’s Time to Face the Fiscal Illusion” New York Times, March 5th 2011

Romer, Paul, “Economic Growth,” The Concise Encyclopedia of Economics

Or, 1994 JEP symposium on New Growth Theory

White, L., “Testimony on fractional reserve banking” July 2nd, 2012

Woodford, M., 1999 “Revolution and evolution in twentieth-century macroeconomics

Howes, A.,  “Why the General Election Result Barely Matters“, Capitalism’s Cradle, April 26th 2015

Federal Reserve Bank of Chicago 2001 Annual Report (also of interest is Makinin, Gail,  “The Economic Effects of 9/11: A Retrospective Assessment“, Report for Congress, September 27th 2002

The Hyperledger Vision

Bitcoin: A Primer for Policymakers, Mecatus Center


8. Monetary theory

Blinder, Alan S., “Quantitative Easing: Entrance and Exit Strategies” Federal Reserve Bank of St Louis  Review, November/December 2010

*Ferguson, Niall “Wall Street Lays Another Egg?Vanity Fair December 2008

Nelson, Edward and Schwartz, Anna “The Impact of Milton Friedman on Modern Monetary Economics: Setting the Record Straight on Paul Krugman’s ‘Who Was Milton Friedman?‘”, Federal Reserve Bank of St Louis Working Paper 2007-048C

Ferguson, Niall, “Friedman is dead, monetarism is dead, but what about inflation?” Daily Telegraph, November 19th 2006


9. Fiscal policy

Cowen, Tyler (1985) “The Marshall Plan: Myths and Realities” in Bandow, D. US Aid to the Developing World Heritage Foundation

Cowen, Tyler “The new Deal didn’t always work, either” New York Times, November 23rd 2008

Cochrane, John H., “Fiscal Stimulus, Fiscal Inflation, or Fiscal Fallacies?” January 29th 2009

Heady, Christopher, “Tax policy to aid recovery and growth“,, March 14th 2011

*Mankiw, N. Gregory, “Crisis Economics“, National Affairs, 2010

Reed, Lawrence W., (1981) “Great Myths of the Great Depression” Mackinac Center for Public Policy

Higgs, Robert, (1997) “Regime Uncertainty: Why the Great Depression Lasted So Long and Why Prosperity Resumed after the War” Independent Review, 1(4)

Skidelsky, Robert, “Britain’s austerity apostles duck the debate“, Financial Times, October 13th 2010

Mitchell, Matthew, “What can government do to create jobs?“, Testimony to the United States House of Representatives Education and Workforce Committee, February 1st 2012

10. International economics

The Pink Book

Radelet, Steven and Sachs, Jeffrey D. “The East Asian Financial Crisis: Diagnosis, Remedies, Prospects” Brookings Papers on Economic Activity; 1998, Vol. Issue 1, p1-90

Gaidar, Y., “Lessons of the Russian Crisis for Transition Economies” Finance and Development, Vol. 36, No. 2 (June 1999)

Hervey, Jack L., and Merkel, Loula S., (2001) “In defense of the US current account deficit” McKinsey Quarterly No. 2

*Chiodo, Abbigail J., and Owyang, Michael T., “A Case Study of a Currency Crisis: The Russian Default of 1998“, 2002, The Federal Reserve Bank of St. Louis

Gillespie, Nick “Really Creative Destruction” [An interview with Tyler Cowen] Reason Magazine, August/September 2003

LaHaye, Laura “Mercantilism” The Concise Encyclopaedia of Economics, 2nd edition, 2007

Richman, Sheldon, “The goal is freedom: Made everywhere” The Freeman, February 23rd 2007

Weisbrot, M., “Ten years after: The lasting impact of the Asian financial crisis” Center for Economic and Policy Research, August 2007

Kay, John “Fetish for making things ignores real work” Financial Times, November 14th 2012

Obstfeld, M., & Rogoff, K. (1995). The Mirage of Fixed Exchange Rates. The Journal of Economic Perspectives, 9(4), 73-96.
  • A theoretical expplanation for the fragility of fixed exchange rate systems – there is usually no technical constraint on governments providing sufficient reserves to cover base money, however it is almost impossible to credibly signal that they will ignore the resulting domestic economic hardship (due to high interest rates) and an interesting case study of Mexico 1994.

11. Behavioural economics

Dixon, M., and Toman, N., “How call centres use behavioral economics to sway customers” HBR Blogs, July 13th 2010

Fama, E., (1970) “Efficient Capital Markets: A Review of Theory and Empirical Work” The Journal of Finance, Vol. 25, No. 2, pp. 383-417

Kahneman, D., Lovallo, D., and Sibony, O., “The big idea: before you make that big decision” Harvard Business Review,

*Lambert, Craig “The Marketplace of Perceptions”, Harvard Magazine, March-April 2006

Manne, H.G., (2005) “Insider trading: Hayek, virtual markets, and the dog that did not bark”, Journal of Corporation Law 31(1):167-185

Manne, H.G., “The welfare of American investors” Wall Street Journal, June 13th 2006

Shleifer, Andrei and Summers, Larry (1990) “The Noise Trader Approach to Finance” Journal of Economic Perspectives 4:19-33

Tabarrok, A., “A Phool and His Money” Review of PHISHING FOR PHOOLS: The Economics of Manipulation and Deception, by George A. Akerlof and Robert Shiller, Princeton University Press.

Poundstone, W., (2011) “Prospect Theory” from Priceless: The Hidden Psychology of Value, One World.

Smith, Vernon (2002) “Constructivist and Ecological Rationality in Economics” Nobel Prize Lecture

Kay, John, “There are many sensible reasons for irrational behavior” Financial Times, August 26th 2008

Rayner, G., “Porsche and VW share row: how Germany got revenge on the hedge fund ‘locusts’” Daily Telegraph, October 29th 2008


12. Global prosperity

World Bank, “Assessing Globalization” Part 1, 2, 3 and 4

*Altman, Morris, (2008) “How much economic freedom is necessary for economic growth? Theory and evidence” Economic Bulletin, 15(2):1-20

Gugenidze, Lado “Georgia’s Search for Economic Liberty: A Blueprint for Reform in Developing Countries”, Development Policy Outlook, American Enterprise Institute, No. 2 June 2009

Isern, Joseph and Pung, Caroline “Driving Radical Change” McKinsey Quarterly 2007, Issue 4, pp.24-35

Laar, Mart “The Estonian Economic Miracle” Heritage Foundation, Backgrounder No. 2060, August 7th 2007

McCloskey, D.M., “Factual free market fairness” Bleeding heart Libertarianism, June 16th 2012

Roberts, P.C., (2002) “My time with Soviet economics” The Independent Review

Rogoff, K., “An open letter to Joseph Stiglitz“, July 2nd 2002

Sachs, Jeffrey, “Reply to Acemoglu and Robinson’s Response to My Book Review” December 3rd 2012.

Skidelsky, Robert, “Gloomy about globalization” New York Review of Books, 55(6), April 17th 2008

McArdle, M., “When bread bags weren’t funny” Bloomberg View, Jan 29th 2015

Snyder, T., “What Soviet Economic Collapse Can, Yes, Teach US Managers“, Christian Science Monitor, August 30th 1991

Shughart, William F., “Public Choice“, The Concise Encyclopaedia of Economics, 2nd edition 2007

Leonhardt, David, “Maybe money does buy happiness after all” New York Times April 16th 2008

Leighton, Wayne and Lopez, Edward, “Public Choice”, Chapter 4 in ‘Madmen, Intellectuals and Academic Scribblers’, Stanford University Press 2013