These readings are all fascinating ways to go deeper into some key economic insights. I am conscious that my students will not forge an academic career, and therefore my aim isn’t to develop technical capabilities, but to confront intuition and to stimulate interest. I am continuously updating this list, so please let me know what you think.
I don’t tend to link to encyclopedia or newspaper websites that explain important concepts. For that, Wikipedia – the second most important website of all time – is your friend.
1. Incentives matter
- Becker, G.S., 1992 “The Economic Way of Looking at Life” Nobel Prize Lecture – The classic statement on the surprisingly wide applicability of economic explanations.
- Runciman, David, 2012 “Everybody gets popped” London Review of Books 34(22) – A fascinating look into incentive alignment in elite sport doping.
- Hope, J., and Fraser, R., 2003 “New Ways of Setting Rewards: The Beyond Budgeting Model” California Management Review, Vol. 45, No. 4 – A look at how compensation can be driven by performance rather than fixed targets.
- Also: Harford, T., 2016 “Incentives” Ch 6 in Messy
2. Cost and choice
- Drucker, Peter (1995), “The Information Executives Truly Need” Harvard Business Review Vol 73, Issue 1, pp.54-62 – Understanding how companies can use information to engage in genuine wealth creation.
- West, G., 2017 , Scale, Weidenfeld & Nicolson – West extends the empirical claim that organisms scale according to regular power laws to cities and companies. It is a broad application of the principles of physics to biology and economics (although I think the emphasis should be as much on networks as on power scaling laws).
- Bastiat, Frederic (1850) “The Broken Window” (Part I of That Which is Seen and That Which is Not Seen) – The classic articulation of opportunity cost thinking.
3. Market exchange
- The Bidding game, National Academy of Sciences, March 2003 – A good, short, overview of auction theory and practice.
- Tabarrok, A., and Cowen, T., “The End of Asymmetric Information” Cato Unbound, April 6th 2015 – A discussion around the claim that technological developments are reducing the problem of asymmetric information.
- Roth, Alvin E., “Art of designing markets“, Harvard Business Review, Oct 1st 2007 – Examples of market design from the master.
- Barnett, J.M., The Hosts Dilemma, Harvard Law Review – Barnett provides an economic explanation for why platforms give away access to core technologies: it increases user investment and increases the platforms value. But this creates a double edged sword.
- Also: McMillan, J., 2002 “Come bid!” (pp. 75-88 and 68-72) in Reinventing the Bazaar
4. Prices and economic calculation
- McAfee, Preston “Price Discrimination“, in 1 Issues in Competition Law and Policy 465 (ABA Section of Antitrust Law 2008) – A theoretical treatment of alternative types of price discrimination.
- Dye, Renee, “The promise of prediction markets: a roundtable” McKinsey Quarterly, 2008 – An executive discussion on the benefits of prediction markets and how to implement them.
- Malone, Thomas W., “Bringing the Market Inside Harvard Business Review, April 2004 – Pros and cons of companies that decentralise decision making and set up internal markets.
- Fisman, R. and Sullivan, T., 2013, “What Management is Good For” (Chapter 5) in The Org: The Underlying Logic of the Office, Twelve – A defence of the practice of management, and an account of its continued importance.
- Munger, M. “Bosses Don’t Wear Bunny Slippers: If Markets Are So Great, Why Are There Firms?” Library of Economics and Liberty, January 2008
- Newhard, J.M., 2014, “The Stock Market Speaks: How Dr Alchian Learned to Build the Bomb” Journal of Corporate Finance, 27(C):116-132 – Newhard reveals the story of the world’s first event study, which occurred when Armen Alchian attempted to use publicly available information relating to the share prices of various companies to establish that lithium was used as the fissile fuel
5. Competition and the market process
- Sautet, Frederic, “The shaky foundations of competition law” New Zealand Law Review June 2007
- Porter, M. “The Five Competitive Forces That Shape Strategy“, Harvard Business Review, June 2008
6. Capital theory and recalculation
- Moore, James, F., 1993 “Predators and Pray: A New Ecology of Competition” Harvard Business Review
- James, David N., 2002, “The Trouble I’ve Seen“, Harvard Business Review – Advice on how to restructure failing companies and recalculate their capital assets
- Tucker, J.A., “Advice to young, unemployed workers” The Freeman, May 16th 2013 – Constructive advice on the mechanics of the labour market.
- McCloskey, D., “Youth unemployment worldwide: the canary in the coal mine of excessive regulation” – a heartfelt essay on the damage excessive regulation causes to youth employment
7. Public finance
- Howes, Anton, “Why the General Election Result Barely Matters“, Capitalism’s Cradle, April 26th 2015 – A short but empirically grounded article explaining how important the trend rate of growth is and why we should avoid being distracted by short term policy choices
- Federal Reserve Bank of Chicago 2001 Annual Report, Report for Congress, September 27th 2002 – A fascinating, well presented account of how the Federal Reserve acted to preserve the banking system during 9/11
- Also of interest is Makinin, Gail, “The Economic Effects of 9/11: A Retrospective Assessment“
- The Hyperledger Vision – A comprehensive presentation on blockchain and opportunities for business
8. Monetary theory
- Blinder, Alan S., “Quantitative Easing: Entrance and Exit Strategies” Federal Reserve Bank of St Louis Review, November/December 2010
- 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
- Hummel, Jeffrey Rogers, “Interpreting Modern Monetary Theory” Library of Economics and Liberty
9. Fiscal policy
- Reed, Lawrence W., (1981) “Great Myths of the Great Depression” Mackinac Center for Public Policy – Challenging the view that fiscal spending got America out of the Great Depression
- The St Louis Fed has a Great Depression curriculum for high school students
- Mankiw, N. Gregory, “Crisis Economics“, National Affairs, 2010 – Commentary on the circumstances relating to Obama’s 2009 stimulus bill, from an experienced policy advisor and renowned economist.
- Memo to the Biden administration on priorities for the US Treasury, By Larry Summers, November 10th 2020
10. International economics
- World Bank, “Assessing Globalization” Part 1, 2, 3 and 4 – A useful collection of papers on empirical evidence around globalisation.
- Richman, Sheldon, “The goal is freedom: Made everywhere” The Freeman, February 23rd 2007 – A passionate claim that the concept of “imports” and “exports” has no economic meaning.
- Obstfeld, M., & Rogoff, K. (1995). The Mirage of Fixed Exchange Rates. The Journal of Economic Perspectives, 9(4), 73-96. – A theoretical explanation 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.
- Weisbrot, M., “Ten years after: The lasting impact of the Asian financial crisis” Center for Economic and Policy Research, August 2007 – A reflection on the East Asian crisis with a focus on the role of the IMF
- 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 – A review of different models and identification of specific triggers for currency crises.
Here is a selection of critical discussion over globalization:
- Rogoff, K., “An open letter to Joseph Stiglitz“, July 2nd 2002
- Skidelsky, Robert, “Gloomy about globalization” New York Review of Books, 55(6), April 17th 2008
- Sachs, Jeffrey, “Reply to Acemoglu and Robinson’s Response to My Book Review” December 3rd 2012.
11. Behavioural economics
- Lambert, Craig “The Marketplace of Perceptions”, Harvard Magazine, March-April 2006 – A summary of chief insights from behavioural economics and neuroeconomics
- Beshears, J., and Gino, F., “Leaders as Decision Architects” Harvard Business Review, May 2015 – A good overview of the difference between Type 1 and Type 2 thinking, and how organisations can implement processes to improve decision making
- Poundstone, W., (2011) “Prospect Theory” (Chapter 16) and “Ultimatum Game” (chapter 18) from Priceless: The Hidden Psychology of Value, One World – Good introductions to key concepts
- Tabarrok, A., “A Phool and His MoneyReview of PHISHING FOR PHOOLS: The Economics of Manipulation and Deception, > George A. Akerlof and Robert Shiller, Princeton University Press – A defence of standard economic theory against behavioural claims
- Manne, H.G., (2005) “Insider trading: Hayek, virtual markets, and the dog that did not bark”, Journal of Corporation Law 31(1):167-185 – A defense of insider trading from the perspective of internal markets and corporate information flows
- Smith, V. L. (2002) “Constructivist and Ecological Rationality in Economics” Nobel Prize Lecture – An explanation of the difference between constructivist and ecological rationality
12. Global prosperity
- Acemoglu, D., 2009 “Epilogue: Mechanics and Causes of Economic Growth” in ‘Introduction to Modern Economic Growth’, Princeton University Press – A summary of key insights about growth theory from one of the leading practitioners.
- Leighton, Wayne and Lopez, Edward, “Public Choice”, Chapter 4 in ‘Madmen, Intellectuals and Academic Scribblers’, Stanford University Press 2013 – An engaging history of the subject.
- Laar, Mart “The Estonian Economic Miracle” Heritage Foundation, Backgrounder No. 2060, August 7th 2007 – A case study of Estonia’s post-Soviet economic reforms.
- Isern, Joseph and Pung, Caroline “” href=”http://www.mckinsey.com/business-functions/organization/our-insights/driving-radical-change”>Driving Radical Change”>” McKinsey Quarterly 2007, Issue 4, pp.24-35 – Parallels between economic transition (e.g. shock therapy) and initiating change within an organisation.
- Snowden, Christopher “The Spirit Level 10 Years On” – When The Spirit Level was released back in 2009 it caught the imagination of the public, by providing empirical evidence to claim that rising inequality was a serious problem. Chris Snowden debunked a lot of the analysis in his book, The Spirit Level Delusion, and this short blog post updates the data to show that not only was the original analysis flawed, but it no longer holds.