What are the best introductory books to get more grounded in economics
I am well underway in the book “The value of everything” , it’s thorough but accessible and starts from the beginning and shows how theories evolved.
Four Basic Truths of Macroeconomics
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Re: Four Basic Truths of Macroeconomics
#182Earlier quoted context omitted.
I think the problem is that housing is exclusionary and people want to live in some locations rather than others. Typical housing doesn't scale well. This creates an effect where people are effectively bidding each other up on the price of housing, because the winner gets to live in that location and everyone else doesn't. This means that the cost of housing scales with how wealthy the people who want to live in that…
There is an exclusionary side to housing. But there's also a stock component to it. If I can buy the same iPhone as you it's because Apple is willing to build more iPhones to follow demand. Cities don't seem to follow housing demand (for a reason or another) hence the shortage and the high prices. > A 2000 sqft house in the middle of nowhere in Wyoming might cost $200k. In SF you'll get far less for the same money. P…
This is one of the reasons companies should be forced to decentralize (as it was the case in Spain, though it was not forced).
I am glad to see that some companies moved south of Paris (Thalès, Bouygues, Dassault Systèmes,...) and people working there and living around our in Versailles can bike to the office.
If we managed to spread companies in the country, we would have less concentration of elitarism and pepole would live a more quiet life.
Re: Four Basic Truths of Macroeconomics
#183Earlier quoted context omitted.
Mmmm, the idea that the rapid and sudden collapse of the hospital system in major city centres would have led to no other economic consequences is certainly a take .
From my readings of history, the death rate from Covid is not enough to cause an economic collapse, even if everyone contracted it.
The hospitalization rate and resulting panic could do it, though. Hospitalizations were about 20% of cases; worse, the rate dropped off less for young people than the death rate did, so while your chance of dying from COVID as a 30-40 year old was only about 1 in 2000, your chance of being hospitalized was about 1 in 30. Having 1 out every 30 people in the labor force hospitalized will shut down a lot of workplaces, particularly if their coworkers want to avoid the inconvenience (and $100K+ hospital bill).
I have an acquaintance that runs a box factory. Their COVID outbreak resulted in only one death, but it knocked one whole building out for about 2-3 weeks. Reportedly their competitors each had 3-4 such outbreaks.
Re: Four Basic Truths of Macroeconomics
#184What are the best introductory books to get more grounded in economics
For a solid intro to economics, I found a real gem of a suggestion by an econ professor at UC Berkeley [1], so I'll share with you. His advice is to start from the father of economics himself, Adam Smith. Then follow that up with Das Kapital (which I know is an unpopular stance here on HN) and some Keynes (who is credited with coming up with the economic theory that helped bring the UK and US out of the Great Depress…
I recently started in the book “The value of everything” , and it’s the first book to give me a solid understanding from the early theories and it’s working its way to today. Especially the decomposition of where the theories differ is enlightening. I just arrived at marginal utility theory. It explains it far better than all the classes I had in economics.
Re: Four Basic Truths of Macroeconomics
#185Earlier quoted context omitted.
Sure you can have the entire worlds information and entertainment at your fingertips with a $50 smartphone, but if you can't afford to have a roof over your head I'd argue the smartphone is irrelevant. I don't think we should be including basic necessities alongside improvements in entertainment in the same statistic, because it will just hide problems.
I think the problem is that housing is exclusionary and people want to live in some locations rather than others. Typical housing doesn't scale well. This creates an effect where people are effectively bidding each other up on the price of housing, because the winner gets to live in that location and everyone else doesn't. This means that the cost of housing scales with how wealthy the people who want to live in that…
>In a lot of ways I think the cost of housing is dependent on the housing density vs job density of the area. If job density is much higher than the housing density, then the price of housing goes up by a lot.
The cost of housing is dependent on job density * quality only to the point what people are able to pay, and then rest is what they are willing to pay. A lot of people buy/rent slightly above their means if they are willing to pay it. Housing price is like an auction house so willing to pay is a bigger factor than able to.
Artificially reducing number of available houses comes in a lot of reasons/pretense but in the end its just a result of people seeing/forced to see their house as an asset; You acquired your house at price X at auction. A local urban developer want to build 100 more units close to you, from prediction of demand and would be profitable at price X (or even <X), so you passively/actively work against that proposal, tell the developer that he can build up to 90 more units, so price of your estate increase X+N. Now the next 90 buyers that bought the house have a reason to keep the price of estate above X+N, tell the developer that he can only make 80 units. Rinse and repeat.
Re: Four Basic Truths of Macroeconomics
#186This is a good example of how so much economics is meant to distract you from what’s important. Cowen is framing economics to exclude things like unemployment, the process by which investment, savings, and income are determined, and the distribution of income. If you get people into the weeds about sticky prices and whatnot, it’s like putting blinders on a horse.
"It is easier to macrobullsht than microbullsht," Nassim Taleb
Re: Four Basic Truths of Macroeconomics
#187This is a good example of how so much economics is meant to distract you from what’s important. Cowen is framing economics to exclude things like unemployment, the process by which investment, savings, and income are determined, and the distribution of income. If you get people into the weeds about sticky prices and whatnot, it’s like putting blinders on a horse.
> This is a good example of how so much economics is meant to distract you from what’s important. I think your assumption of malice is unfounded. A likely benign explanation is that Cowen focused on areas there economists are in broad agreement without intent to mislead.
Nah, in this case the accusation is warranted, Cowen has always been an unconditional cheerleader for unconstrained capitalism,the status-quo and the dubious predictive and normative power of mainstream macro.
Re: Four Basic Truths of Macroeconomics
#188I get a "please subscribe" pop-up and can't get rid of it without fiddling with the CSS editor. Anyhow... Summary of Truisms: 1) During recessions, employers tend to lay off rather than reduce wages 2) Central bank stimulus helps recessions 3) Too much stimulus causes run-away inflation 4) Non-monetary problems like oil shocks and pandemics can cause recessions 5) Increasing population helps economies. ("Hump to de-s…
> Non-monetary problems like oil shocks and pandemics can cause recessions It wasn't the oil shock of the 70's that caused recession. It was our response to it - Nixon's oil and gas price & allocation controls. We came out of that when Reagan repealed it. Our current recession is not caused by the pandemic, but the lockdown response to it.
"Our current recession is not caused by the pandemic, but the lockdown response to it."
I was initially going to post this to refute freddie_mercury, but when I looked at the data it's more suggestive that he's right, and the recession actually is caused by the pandemic.
We can examine this by looking at countries that had no lockdowns and seeing how they did relative to countries that did.
Taiwan had no lockdown, instead relying on incredibly strict quarantine procedures, robust contact-tracing, and being an island. South Korea also had no lockdown, but managed a few surges through very thorough test, trace, & isolate procedures. Those two countries had the smallest economic declines, with Taiwan barely registering a recession at -0.6% and South Korea at -3%:
https://www.taiwannews.com.tw/en/news/4008495
New Zealand had a very strict lockdown in March and April, a steep recession (-17%), but then eradicated COVID and ended the lockdown. They had a sharp V-shaped recovery (+14%) in Q4:
https://www.nzherald.co.nz/business/nz-economy-bounces-out-o...
But there's a potential conflating effect: the countries without lockdowns usually lacked them because they didn't have many cases. To remove the conflating effect, we can look at Sweden, which had no lockdown but lots of COVID cases (and more deaths than its neighbors). Sweden had a -8.3% fall in its Q2 GDP. By comparison, Norway (strict lockdown, few cases) had -5.3%, Denmark (strict lockdown, fair number of cases) had -8.5%, and the UK (initially no lockdown but reversed course when they had lots of cases) had -21.7%.
This would seem to indicate that it's the pandemic itself (and resulting societal fear) rather than the lockdown that caused the GDP fall.
Re: Four Basic Truths of Macroeconomics
#189Earlier quoted context omitted.
Sure you can have the entire worlds information and entertainment at your fingertips with a $50 smartphone, but if you can't afford to have a roof over your head I'd argue the smartphone is irrelevant. I don't think we should be including basic necessities alongside improvements in entertainment in the same statistic, because it will just hide problems.
> but if you can't afford to have a roof over your head I'd argue the smartphone is irrelevant. I'm pretty sure that the vast majority of homeless people would disagree vehemently. Not only does smartphone make it much easier to find a job and get back to the point where you can afford a roof over your head, it allows you to stay in touch with people you care about, people who may help you out now and then. And it gi…
I dont know what homeless people you do know (I guess the number is zero) but here on planet earth 99.99% of poor/homeless people would prefer a roof over their heads than a smart-phone. Well, everybody with a working brain would choose the house.
Re: Four Basic Truths of Macroeconomics
#190What are the best introductory books to get more grounded in economics
Buy a cheap, used macro/micro book (Krugman or similar)
Buy and read,23 Things They Don't Tell You About Capitalism, by Ha-Joon Chang. All his books are recommended for a reasonable criticism of mainstream economics.