Category Archives: suggested reading

Macro bootcamp

Updated: July 2011

The Macro Bootcamp is a short and intensive reading group that serves as a refresher for a graduate level class in contemporary macroeconomics. It aims to cover the seminal texts of the most prominent schools of thought, and act as a foundation for applications to current policy debates.

1. Advanced reading

Participants are advised to read the following book, which provides an excellent introduction to modern macroeconomics from a school-of-thought approach. The interviews at the end of the book in particular are worth attention:

 

2. Reading list: key articles

Note: this reading list is heavily influcenced by Tyler Cowen’s Macro I Reading List, Fall 2006 (.pdf). For a previous version see here.

History of thought/background

Real Business Cycles

Keynesian economics

Monetary policy

 

3. Further reading

The classic graduate text for macro is David Romer. It is the best treatment of the alternative growth models, and then has a chapter on each variable of national income accounting. Participants are advised to grapple with it after the bootcamp has taken place

It is also a good idea to see how various Austrian, Keynesian and Moneratist ideas can be integrated into a heterodox narrative. See Arnold Kling’s “Lectures on Macroeconomics“.

Participants are also advised to keep abreast of the conversation of economics:

Blogs

Audio

 

4. Reading list: applications & policy debates

The Great Depression

  • Bernanke, Essays on the Great Depression, 1995, JMCB
  • Higgs, R., Regime Uncertainty
  • Rothbard
  • Friedman & Schwartz
  • Larry White, “Hayek and Robbins on the Great Depression” JMCB

The Great Recession

Growth Theory


 

Agenda

Session 1 Thursday 28th July

2pm-3:45pm: History of thought/background
4pm-5:45pm: Real Business Cycles

Session 2: Tuesday 2nd August

2pm-3:45pm: Keynesian economics
4pm-5:45pm: Monetary policy

Session 3: Spring 2012

2pm-3:45pm: The Great Depression
4pm-5:45pm: The Great Recession

The meetings will take place in central London, but are by invitation only.

An undergraduate Austrian-school reading list

The best

Handbook

Videos

Textbooks

  • Shand, Alexander H., 1984, The Capitalist Alternative: An Introduction to Neo-Austrian Economics. New York: New York University Press
  • O’Driscoll, G.P., and Rizzo, M.J., 1985, The Economics of Time and Ignorance Routledge
  • Evans, Anthony J., 2014, Markets for Managers. Wiley

Primers

  • Littlechild, Stephen C., 1978, The Fallacy of the Mixed Economy. Hobart Paper 80. London: Institute of Economic Affairs
  • Kirzner, Israel M., 2001, Ludwig von Mises. Wilmington, DL: ISI Books
  • Butler, Eamonn, 2010, Austrian Economics – A Primer, London: Adam Smith Institute

Intellectual histories

Conference proceedings

  • Dolan, Edwin G., (ed) 1976, The Foundations of Modern Austrian Economics. Kansas City: Sheed & Ward Inc.
  • Spadaro, Louis M., (ed) 1978, New Directions in Austrian Economics. Kansas City: Sheed Andres & McMeel

If you like audio, here’s Ludwig Lachmann’s “History of the Austrian School” (1977). Here’s the short intro I wrote in 2005, and here’s “What Should an Austrian Economist Do?

The Austrian-school classics

  • Hayek, Friedrich A., 1948. Individualism and Economic Order. Chicago: University of Chicago Press
  • Mises, Ludwig von, 1949. Human Action: A Treatise on Economics. New Haven: Yale University Press
  • Rothbard, Murray N., 1962. Man, Economy & State. Princeton, N.J.: D. Van Nostrand Company
  • Kirzner, Israel M., 1978. Competition and Entrepreneurship. Chicago: University of Chicago Press

Contemporary pathways in Austrian macroeconomics

One of the most common criticisms of the Austrian-school of economics is that it is stuck in the past. For me this inexcusably ignores some excellent work that has been done “post revival” (i.e. since 1974). Indeed my own research on monetary theory is grounded in the following books, which – read together – demonstrate the relevance of Austrian ideas for a progressive research programme:

  • O’Driscoll, Gerald and Rizzo, Mario, 1985. The Economics of Time and Ignorance, Routledge
  • Cowen, Tyler, 1997. Risk and Business Cycles: New and Old Austrian Perspectives, Routledge
  • Lewin, Peter, 1999. Capital in Disequilibrium: The Role of Capital in a Changing World, Routledge
  • Horwitz, Steve, 2000. Microfoundations and Macroeconomics, Routledge
  • Garrison, Roger, 2001. Time and Money: The Macroeconomics of Capital Structure, Routledge

Note that they have all been published as part of the “Foundations of the Market Economy” series edited by Mario Rizzo and Larry White through Routledge. This is testimony to the influence of the NYU programme and the power of the SDAE as a professional organisation. A thorough reading of these books provides an excellent understanding of the unique contributions of the Austrian school, but one that is embedded within the state of the professional debate. More importantly, they are bursting with ideas to take this research forward, and beg to be applied to the current economic climate. They provide fertile pathways for the future of the Austrian-school.

Austrian theory of the trade cycle

The classics:

Some recommended overviews:

Resources on the financial crisis

A lot has been written on the financial crisis, and there will be even more to come. But here are my recommendations for those seeking to understand the real causes of what went wrong.

(The lecture notes for this talk are here).

Well-written, populist books:

Policy-focused pamphlets:

Thorough, academic accounts:

Entertaining and informative videos:

My own account of the UK experience is:

Course readings

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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” Wired.com, May 2013

 

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

 

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

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

Video: John Stossel – The Flat Tax, May 2014

 

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“, Vox.eu, 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

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

 

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