The Little Book of Economics: How the Economy Works in the Real World

In The Little Book of Economics, Greg, Ip, one of the country’s most recognized and respected economics journalists, walks readers through how the economy really works. Written for the inquisitive layman who doesn’t want to plow through academic jargon and Greek letters or pore over charts and tables, This book offers indispensible insight into how the American economy works – or, doesn’t.

Introduction:

Greg ’s work at the Wall Street Journal , and now the Economist , is based on careful, in-depth research. It uses a robust set of analytical frameworks and refl ects access to top policy makers and thinkers. And it is always relevant and timely. His columns have been the catalyst for interesting discussions at PIMCO ’s Investment Committee as we all tried to better understand developments and frame our shared outlook for the economy and markets.

In his elegant book, Greg takes us on an informative and stimulating economic journey. We make multiple stops as we get exposed to basic topics (such as the drivers of economic growth and welfare) and delicate balances (such as the tug of war between infl ation and defl ation). We learn about how government actions impact the economy—be it through the familiar channel of public fi nances and interest rates, or the more complex web of regulations and prudential supervision.

The book offers us a wonderful mix of perspectives. We are treated to broad overview analyses that are reminiscent of looking at the landscape from a plane fl ying at 30,000 feet in a cloudless sky. We are also exposed to careful micro discussions, fi nding ourselves, as Greg puts it, “inside the sausage factory.” As his loyal readers would expect—and there are many of them—Greg ’s book also includes delightful discussions of one of his favorite topics, namely, the design and operation of monetary policy. We get a rare view into the mysterious world of the U.S. Federal Reserve where technocratic competence has to be combined with political savvy and judgment calls about the inherently uncertain balance of future risks and opportunities—be it in Europe, the United States, or the rest of the world.

The book also provides us with numerous examples of how all this analysis applies to companies and people that are familiar to most of us. Indeed, the frequent real-world snippets and text boxes are a great reminder of how economics plays out every day in the world around us. Greg did more than produce an elegant book. He did so at a great time.  The global economy today is in a multiyear process of resetting after the 2008 to 2009 global fi nancial crisis. This historical phenomenon is full of unfamiliar dynamics. It constantly questions “conventional wisdom,” gives rise to what was previously deemed unthinkable, and proceeds in a highly uneven, bumpy, and often surprising fashion.

No wonder economics features so prominently on the front pages of daily newspapers around the world. In industrial countries, there are frequent reports on the unusual level and composition of unemployment, the explosion in public debt and defi cits, the volatility of exchange rates, the prospect for higher taxation, and the still fragile state of the banking system. Moreover, Europe is in the midst of what many regard as an “existential challenge.” Meanwhile, in major emerging economies, you will fi nd a growing number of people questioning the sustainability of the development breakout phases, analyzing how best to control infl ation and asset bubbles, how to immunize their economies against the headwinds from the industrial countries, and how also to counter protectionist pressures from abroad.

Contents:

• The Secrets of Success
• Economic Bungee Jumping
• In-Flight Monitor
• Labor Pains
• Fire and Ice
• Drop the Puck!
• All the World’s an ATM
• The Price of Economic Freedom
• All the President’s Men
• The Buck Starts Here
• White Smoke over the Washington Mall
• When the World Needs a Fireman
• The Elephant in the Economy
• Good Debt, Bad Debt
• Love-Hate Relationship

The Little Book of Economics: How the Economy Works in the Real World By Greg Ip pdf