7 books about economics worth reading for everyone

Exploring economics can be a rewarding experience, whether you’re well-versed in the field or just starting to dip your toes in. However, not all economics texts are created equal. For instance, the standard graduate micro textbook is Microeconomic Theory by Mas-Colell, Whinston, and Greene, while macroeconomics presents its own set of formidable texts, including those by Stokey, Lucas, and Prescott, or Sargeant and Ljungqvist. 

Should you read them? Well, academics say, “Reading one page of a graduate-level economics textbook takes one hour — the first half to understand it, and the second half to convince yourself you understand it!”

Let’s aim to keep it at a more accessible 101-102 level of economics with these books:

Common Sense Economics by James Gwartney, Richard L. Stroup, and Dwight R. Lee

The authors of Common Sense Economics are experienced educators who know how to use economics to explain why individuals and countries succeed.

The book covers essential economic concepts like trade benefits, opportunity cost, the role of prices in conveying information, diversification, and the power of incentives. These principles are always at work in the economy, whether it’s doing well or not. The third edition is updated and relevant for today’s world. 

Freakonomics by Steven Levitt and Stephen Dubner

Freakonomics is a thought-provoking book that tackles unconventional questions with surprising answers. Levitt, an economist behind the book, dives into topics like gun safety versus swimming pools, the curious connections between teachers and sumo wrestlers, and the real impact of parents on their kids.

In collaboration with journalist Stephen Dubner, they explore a range of subjects. And they reveal that economics boils down to incentives — how people make choices to get what they want, especially when others are in the mix.

Good Economics for Hard Times by Abhijit V. Banerjee and Esther Duflo

In Good Economics for Hard Times, Banerjee and Duflo present their research in a clear and compelling way, advocating for intelligent interventions and a society built on compassion and respect. The premise is that economics will help address the most pressing social and political problems of the modern era. 

The world is filled with challenges like immigration, inequality, globalization, and climate change, and finding solutions is crucial. What people need, according to the book, are fresh ideas that can bridge the gaps of disagreement and distrust.

Capital in the Twenty-First Century by Thomas Piketty

Capital in the Twenty-First Century is an exploration of long-standing questions about income inequality, wealth concentration, and the future of economic growth. Using extensive data from two centuries and twenty countries, Piketty marks important economic and social trends.

Piketty’s dual role as an accomplished economist and an effective communicator has made his work influential not only in academic circles but also in the realm of politics. His ideas have even struck a chord with high-level policymakers.

Misbehaving by Richard Thaler

This book wants to challenge the idea that people always make rational decisions in economics. Thaler shows that in real life, people often make choices that don’t follow traditional economic thinking. These quirks in behavior have big consequences in areas like personal finance, business, and government.

Thaler’s book is a fun and enlightening journey into the world of behavioral economics. He shares stories of his battles with old-school economic ideas and reveals how psychology and economics closely intertangle.

A Splendid Exchange by William Bernstein

A Splendid Exchange is a sweeping history of global trade, spanning from ancient times to today’s globalization debates. 

Bernstein takes readers on a journey from the ancient silk trade in China to the rise and fall of spice monopolies in Portugal, as well as the rush for sugar in Jamaica and the modern era of global commerce. He highlights how trade has shaped the world and argues that trade, despite occasional conflicts, is a force for good among nations.

Adaptive Markets: Financial Evolution at the Speed of Thought by Andrew W. Lo

Are financial markets rational and efficient, or are they irrational and inefficient? This question has big implications for investment management and financial regulation.

Lo introduces a fresh perspective called the Adaptive Markets Hypothesis — both rationality and irrationality coexist in financial markets. Drawing from various fields like psychology, biology, and neuroscience, he explains that market efficiency isn’t entirely wrong but is incomplete. When markets become turbulent, people react instinctively, causing inefficiencies that others can exploit.

In conclusion, these books will be incredibly helpful for Binomo traders because economics forms the basis of many investing and trading strategies. Market dynamics will no longer be a mystery!

Sources:

Amazon Best Sellers – Economics, Amazon

Economics (list), Financial Times