Reviews for Modern Economics An Introduction

The average rating for Modern Economics An Introduction based on 2 reviews is 4 stars.

Review # 1 was written on 2019-01-13 00:00:00 Thomas Barrett About 5 years after finishing college, I started to feel that there was a major, glaring deficiency in my liberal arts education. As a young, naive, and somewhat annoying undergraduate, I had a deep and mostly indefensible aversion to the idea of taking an economics class. It's all a bunch of B.S., I thought--and whatever isn't B.S. would certainly offend my pale pink sensibilities at the time. I managed to get by without having to take one. However, as I got to be a little older, I starting to develop a curiosity (or at least an insecurity about my cluelessness) about markets: where do they come from? How do they work? What holds them together? And, what is it that all these finance people and investment bankers keep rattling on about that mostly goes right through me? Economics was shrouded in a veil of mystery, but I wasn't sure how to begin to address my lack of understanding. And, so, when I stumbled upon this book, I figured it would be a perfect introduction. It turned out to be exactly that, and then some. Much to my surprise and delight, it actually affirmed some of the suspicions I formed in my youth about the discipline. Beinhocker spends the first half of the book raking traditional economic theory through the coals. In their desperation to be taken seriously as "real" scientists, economists of the 19th century began borrowing heavily from emerging theories in physics and applying them to the dynamics of the economy. Not only that, they believed they could explain the entire workings of the economy with equations in the same way that, say, Maxwell did with electromagnetism. As Beinhocker shows, this was to disastrous effect, forcing these "scientists" to push aside anything that didn't fit with their equilibrium equations as a black-box, exogenous force. And, as Beinhocker goes on to demonstrate, it is precisely these "exogenous forces" that not only make economics interesting, but also are the very engine of the economy itself. Indeed, they are responsible for the incredible growth in wealth experienced throughout the world's economies starting in about 1750. And so, the second half of the book is an introduction to the emerging field of "complexity economics," which views the economy not as a closed system seeking equilibrium but as a complex, ever-changing, adaptive system. In other words, it is an evolutionary system in the same way that life on earth is. And so, much of the language and theory for describing it comes out of evolutionary theory. Now, Beinhocker is at great pains to prove that he isn't falling into the same trap-of-analogy as the traditional economists by borrowing from the sciences. He repeatedly points out that the traditional economic view is that economic equilibrium is like mechanical equilibrium. In contrast, complexity economists say that the economy is not like an evolutionary system but rather is one. As we've no choice but to use language and mental models to describe and understand these systems, this distinction might leave some of us (myself included) a little wary. Fortunately, much of what complexity economics--which is still in its infancy--offers is very compelling and convincing. At times, it seems a little over-enamored with computer science (particularly the section on "if-then" rules, which had my eyes rolling) as a method of modelling and explaining complex systems. But, once it moves beyond that, it has a fascinating story to tell about how organizations survive (or don't), why so many industries experience boom and bust, and--most interestingly--how our economy grew from one with just a few "products" to one with tens of billions. The last few chapters are my favorites, when Beinhocker discusses the political and policy implications of complexity theory. The best bit is about how complexity economics takes us beyond the stale, old boring left-vs.-right debates and offers a new way of looking at the economy and the best ways to nurture it. Overall, I found this to be a terrific, extremely thorough, and very satisfying book.

Review # 2 was written on 2012-05-03 00:00:00 Janet Gorth When I was studying engineering at University one of the subjects we had to have an overview of was economics. I wanted the read this book because to me at the time the traditional macro economics theory just didn’t make sense – too many assumptions that were self evidently wrong, and I wanted a more up to date perspective. This book, I was pleased to discover, not only explained traditional economic theories in detail but also agreed that there are basic flaws in this traditional macro economic view. More interestingly, for me anyway, the book discusses much about complex adaptive systems in economics by comparing them to those in biological and social systems. The treatment of complex adaptive systems I found to be both fascinating and enlightening, probably more than the economics they were being used to illuminate. Certainly I could recommend this book for no other reason than the discussion of ‘Sugarscape’ which illustrated economics, evolution and complex adaptive systems in one very simple thought experiment and model.