Economics and Finance Books for a Beginner

[qspeechc]

Hi everyone.

I didn't put this in the Science Book Discussion because I don't really know if people would consider this science. Please move it if you think appropriate.

Basically, I don't know anything about economics, finance and the related subjects. So much of the news is about economics and I would like to understand it. I also like reading about history, and history books sometimes discuss economics, so I think I had better learn about it.

I have a bachelor's in math so that's not a problem. What I am looking for is:

1) A book or books that start from the very beginning, assumes the reader knows nothing, and discusses the basic principles and general ideas of economics.

2) The next step up after the above books, books that go further into the subjects. So, I don't know, I suppose that go up to an intermediate level.

I am not per se interested in financial math, for example, as a career (at least not at the moment), I just want to know about economics, finance etc. for the reasons I gave above, and for my general education. Oh, and, I'm not really looking for popular books, but proper textbooks for the serious student.

By the way, I did try to do some research on my own, but I keep coming across reviews like this:
https://www.amazon.com/review/RC1TD...IN=0132078295&nodeID=283155&tag=pfamazon01-20
I still don't know if that guy is serious or trying to be funny: "There's also some nasty addition and multiplication!". At least on PF I know you can generally trust the people here.

Thanks guys.

 

[skilgannonau]

This is something I posted in an earlier thread:

For micro I would suggest:

'Microeconomic Theory' by Walter Nicholson is arguably the most rigorous micro tb at the undergraduate level. It's typically used in intermediate micro.

'Microeconomic Analysis' by Hal Varian is the next level up. Typically used in upper undergraduate or masters level. Econ Grads often refer to this book for intuition (which could be said the same for Nicholsons book as well).

If you're feeling really gung-ho 'Microeconomic Theory' by Mas-Colell et al. is the bible at first year grad econ.

For the sake of completeness I would also recommend Greg Mankiws 'Principle of Microeconomics' (any edition will do including the first one). Greg Mankiws book is the dominant first year tb and should be referred to to learn basic concepts.

For Macro:

'Macroeconomics' by Olivier Blanchard is a good macro tb with a Keynsian flavour (but that's typical. Almost all undergrad is taught with a keynsian flavour). You might not find this at all rigorous since most of it is algebraic manipulation or basic calc. Personally I think this is one of the better intermediate macro tb.

'Foundations of Modern Macroeconomics' by Heijdra is one I really like. At level of upper undergrad or masters.

Just so know, compared to first year physics tb first year economic tb are mathematically basic. Even at the intermediate level the mathematical sophistication isn’t that high (relatively speaking). The book review you quoted for instance isn’t that far wrong, the maths in the macro book by blanchard really only gets up to algebraic manipulation and some basic calculus. A lot of students taking econ are business majors which should explain the reviews you get. But econ can get really mathematical at higher levels.

Other micro textbooks I would recommend:

http://www.introecon.com/" by R. Preston McAfee; Haven’t used it personally but it’s probably the most mathematically rigorous principles tb on micro. Written for and used by students at Caltech. Author offers for free on the site I linked.

‘http://www.deirdremccloskey.com/docs/price.pdf"’ by Deirdre/Donald McCloskey. Out of print but can download from author in the link provided or can get second from Amazon or borrow from library. Only briefly looked through it but liked it a lot.

‘Exchange and Production: Theory in Use’ by Alchian & Allan. Only looked at it briefly but was really impressed by it’s exposition. Probably the best written micro tb I’ve listed. Would need to complement it with another tb if you want to understand the technical aspects. Not a lot of maths. Out of print but I was so impressed by it I bought it second hand of amazon.

‘Microeconomics: Behavior, Institutions, and Evolution’ by Samuels Bowles. Not an orthodox tb but the models used are pretty mainstream. Generally at an advanced undergrad/first yr graduate level but maths is pretty basic i.e. calc 3 level. An understanding of basic game theory used in social science would be a prerequisite though. I can’t recommend this tb enough but I have to stress the topics in this book isn’t taught in typical micro subjects. Topics usually only come across in field subjects.

Macro is hard to recommend. The Macro tb by Blanchard is representative of kind of macro taught at undergrad but it does not reflect the state of the discipline. Generally speaking their is lag at what is accepted in the discipline and what is actually taught at undergrad. Personally I wouldn’t bother with macro until I’ve learned micro properly.

 

[qspeechc]

Thanks for the detailed reply. Are any of those books suitable for a beginner with no knowledge like myself?

 

[skilgannonau]

Hi qspeechc,

After rereading your OP again I’m not sure whether the list I gave is what you’re after but is a list I would recommend if you were to major in econ.

Principles of Microeconomics by Greg Mankiw would be the first book I would advise a beginner with no knowledge on econ to look at. Pretty much the dominant principles micro book used everywhere.

If you still want to learn about economics afterwards or you find Mankiw too easy then I would move on to one of the following:

Microeconomic Theory by Nicholson;

The Applied Theory of Price by Deirdre McCloskey;

Introduction to Economic Analysis by Preston McAfeeIt would be hard for me to recommend anyone over the others since they differ in amount of examples of real world applications so I can’t be sure which one might be to abstract. You’ll probably want to try them all out and see which one is best fit for you.

Irrespective which one you choose I would always recommend as a complement Exchange and Production by Alchian & Allan. It’s one of the best expositions I’ve read on micro.

If by any chance after the intermediate books you’re still interested in micro then in order of difficulty:

Microeconomic Analysis by Hal Varian;

Advanced Microeconomic Theory Jehle and Reny;

Microeconomic Analysis by Mas-Colell et al.Just so you know there is a big gap (mathematically wise) between Varian and the latter two. The latter two require ‘mathematical maturity’ up to level of real analysis (not saying real analysis is required for those books just the ‘mathematical maturity’).

In general all the books I’ve so far mentioned cover largely the same material/topics but differ in the levels of technical sophistication. The last two would be the most abstract and have almost no real life examples and really are only suitable for people looking to graduate level economics.

 

[qspeechc]

Cool. Thanks for taking the time to give such a detailed reply.

 

[the4thamigo_uk]

For a very readable book I would recommend 'Macroeconomics Understanding the wealth of Nations' by Miles and Scott. Its used for the economics component of a lot of MBA courses in the UK. It is not heavy on algebra but has a the main key formulae and models. I personally think its good to get the background principles before constructing the formulae, which I feel sometimes hides you from the reality of what is going on...

 

[qspeechc]

Thanks the4thamigo_uk

 

[EntropicLove]

Some great links here thanks guys!

 

[Pyrrhus]

I also recommend Varian and Mas-Colell books for Micro. For Macro, Economic Growth by Sala-i-Martin book is good.

 

[MosesKoul]

hello,
im currently studying economics hons in the udergrad.
my query is pretty simple,straightforward and succinct.

Can i study Physics after Doing Eco in the undergrad?
what technical fields can i get into after my eco undergrad?
im looking for something mathematical and more scientific in its approach .

 

[Pyrrhus]

Unfortunately, Econ undergraduates are generally not strong mathematically (and are not taught enough mathematics in my opinion) as other undergrads degrees on engineering or on physics. This is funny as Econ at the Graduate level is quite mathematical. Students with undergraduate degrees in physics or engineering tend to follow the approach of learning the economics intuition while knowing the math at the graduate level. It is easier to get economic intuition than to learn the required math.

I recommend that you do a double major or switch if you are more interested in Math. Anyway, most econ students at the undergraduate do at least a Master in Econ in order to strengthen their economic modeling skills.

 

[MosesKoul]

The reason of doing econ is for its financial viability later on in life.
i would be wasting my time in Physics if i shift to econ after my physics undergrad since i want to pursue research in it(Physics)

but say for example,
after doing my econ undergrad and then postgrad.
Can i enroll in for a Physics degree again later on in life.

since Physics is a passion for me more than a means to earn a living.
and i want to study it as its my dream.
so what can you say on that.

i know,considering how economics is spoken through the language of mathematics and its variables. its sad its not as important as it is in a physics or engineering course.
apart from that,
what other options do i have after doing my undergrad in econ?
what are the technical options available to me?

 

[skilgannonau]

There are probably people more qualified to answer this than me but whatever it’s worth I agree with what Pyrrhus has said. Undergraduate studies in econ independent of other studies in mathematics is inadequate preparation for graduate level econ let alone grad level physics. Econ students serious about pursuing grad level studies in econ are always given advice to take maths subjects. If anything, it’s not unheard of people with physics background with little to no econ background being competitive in admissions to econ grad programs but I’ve never heard the reverse. My point is if you want to have the option of pursuing physics at the graduate level then purely taking econ is not the way to go about it. Someone can correct me if I’m wrong but I would assume a maths background is necessary but insufficient for grad physics. You would probably need to combine it with at least some physics.

Contrary to perception having purely undergrad econ with no or little formal mathematics will not open doors for ‘technical options’. As Pyrrhus has said combining econ + mathematics is probably the best way to keep your options open career wise academically or in the private/public sector.

 

[EntropicLove]

As someone who was very on the fence between physics and economics I personally think economics undergrad cirriculum typically involves more understanding using repetitive concepts like equilibrium states/points and intepreting information and strong verbal explanations and good writing skills; Physics involves a lot of mathematical derivation and visualizing and can be really random and/or counter-intuitive. This is just me, I find economics to be pretty intuitive.