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

Also see this video series by Richard Ebeling and “What Austrian Economics IS and What Austrian Economics Is NOT” by Steve Horwitz.

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:

Recommended pop economics


Hazlitt, Henry (1946) Economics in One Lesson, Harper and Brothers

  • The original attempt to explain economic reasoning to non-economists, and an excellent utilisation of the broken-window fallacy.

Landsburg, Steven (1993) The Armchair Economist, Simon & Schuster

  • Provocative and intellectually stimulating.

Harford, Tim (2006) The Undercover Economist, Oxford

  • Less contrarian than Landsburg and contains more principles of economics than Levitt & Dubnar. A useful alternative to a textbook.

Cowen, Tyler (2007) Discover your Inner Economist, Penguin

  • One of the sharpest minds applying basic economic reasoning to an array of social situations.

Frank, Robert (2007) The Economic Naturalist, Basic Books

  • Somewhat repetitive reiteration of the point that economics can explain many social curiosities by recognising that things happen when the benefits exceed the costs.

Harford, Tim (2008) The Logic of Life, Little Brown

  • An extension and update to Gary Becker’s classic The Economics of Life (1995).

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.

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

Also see “Know Your Customers’ “Jobs to Be Done”” HBR, September 2016 and Gneezy, U., and Rustichini, A., (2000) “A Fine is a Price” Journal of Legal Studies, 29(1):1-17

2. Cost and choice

  • Drucker, Peter (1995), “The Information Executives Truly NeedHarvard Business Review Vol 73, Issue 1, pp.54-62 – Understanding how companies can use information to engage in genuine wealth creation.
  • West, G., 2017 [2018], 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.

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

5. Competition and the market process

6. Capital theory and recalculation

7. Public finance

8. Monetary theory

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
  • 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.

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:

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 Money” Review of PHISHING FOR PHOOLS: The Economics of Manipulation and Deception, by 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 “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.