A welcome user’s manual for anyone invested in the market or otherwise engaged in the financial sphere.

THE NEW WORLD ECONOMY

A BEGINNER'S GUIDE

Thoroughgoing survey of the globalized, interleaved economy and its discontents.

If there is a single takeaway from management consultant Epping’s (A Beginner’s Guide to the World Economy, 2001, etc.) book, it’s that chaos is king and control nearly impossible, whether of a command economy or of world trade. “Success in the new fusion economy,” he writes, “may depend in large measure on learning that we can’t control everything.” Just so, there are many variables in determining whether an economy is performing well or poorly and no single gauge of success or failure; trying to impose that control on it may produce inflation on the one hand or recession on the other—or, for that matter, the mix of both known as stagflation, “a worst-case scenario.” The author takes a somewhat contrarian view on certain matters: While he notes the shortcomings and costs of cryptocurrency, among them the fact that “bitcoin mining” annually uses as much energy as the entire nation of Ireland, he also opines that “the current system isn’t necessarily better than an alternative system using cryptocurrencies.” Epping looks at the facts of global trade and, without naming names too pointedly, exposes the folly of trade wars, tariffs, and other hallmarks of economic nationalism: “Politicians who speak of ‘winning’ or ‘losing’ in trade don’t understand that all trade in goods and services is balanced by monetary transfers moving in the opposite direction.” In the global sphere, it’s more sensible to blame governments that “allow most of the new wealth to flow into the coffers of the rich" than to blame globalized trade for our woes. Among the other topics that Epping discusses are the externality of pollution, hitherto seldom factored into the cost of doing business but now increasingly important to reckon with, and the economic behavior of different generations, from the acquisitive and consumptive baby boomers to the comparatively frugal (necessarily, as it happens) millennials.

A welcome user’s manual for anyone invested in the market or otherwise engaged in the financial sphere.

Pub Date: Jan. 21, 2020

ISBN: 978-0-525-56320-4

Page Count: 352

Publisher: Vintage

Review Posted Online: Sept. 24, 2019

Kirkus Reviews Issue: Oct. 15, 2019

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Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our...

THINKING, FAST AND SLOW

A psychologist and Nobel Prize winner summarizes and synthesizes the recent decades of research on intuition and systematic thinking.

The author of several scholarly texts, Kahneman (Emeritus Psychology and Public Affairs/Princeton Univ.) now offers general readers not just the findings of psychological research but also a better understanding of how research questions arise and how scholars systematically frame and answer them. He begins with the distinction between System 1 and System 2 mental operations, the former referring to quick, automatic thought, the latter to more effortful, overt thinking. We rely heavily, writes, on System 1, resorting to the higher-energy System 2 only when we need or want to. Kahneman continually refers to System 2 as “lazy”: We don’t want to think rigorously about something. The author then explores the nuances of our two-system minds, showing how they perform in various situations. Psychological experiments have repeatedly revealed that our intuitions are generally wrong, that our assessments are based on biases and that our System 1 hates doubt and despises ambiguity. Kahneman largely avoids jargon; when he does use some (“heuristics,” for example), he argues that such terms really ought to join our everyday vocabulary. He reviews many fundamental concepts in psychology and statistics (regression to the mean, the narrative fallacy, the optimistic bias), showing how they relate to his overall concerns about how we think and why we make the decisions that we do. Some of the later chapters (dealing with risk-taking and statistics and probabilities) are denser than others (some readers may resent such demands on System 2!), but the passages that deal with the economic and political implications of the research are gripping.

Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our minds.

Pub Date: Nov. 1, 2011

ISBN: 978-0-374-27563-1

Page Count: 512

Publisher: Farrar, Straus and Giroux

Review Posted Online: Sept. 4, 2011

Kirkus Reviews Issue: Sept. 15, 2011

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Occasionally wonky but overall a good case for how the dismal science can make the world less—well, dismal.

GOOD ECONOMICS FOR HARD TIMES

“Quality of life means more than just consumption”: Two MIT economists urge that a smarter, more politically aware economics be brought to bear on social issues.

It’s no secret, write Banerjee and Duflo (co-authors: Poor Economics: A Radical Rethinking of the Way To Fight Global Poverty, 2011), that “we seem to have fallen on hard times.” Immigration, trade, inequality, and taxation problems present themselves daily, and they seem to be intractable. Economics can be put to use in figuring out these big-issue questions. Data can be adduced, for example, to answer the question of whether immigration tends to suppress wages. The answer: “There is no evidence low-skilled migration to rich countries drives wage and employment down for the natives.” In fact, it opens up opportunities for those natives by freeing them to look for better work. The problem becomes thornier when it comes to the matter of free trade; as the authors observe, “left-behind people live in left-behind places,” which explains why regional poverty descended on Appalachia when so many manufacturing jobs left for China in the age of globalism, leaving behind not just left-behind people but also people ripe for exploitation by nationalist politicians. The authors add, interestingly, that the same thing occurred in parts of Germany, Spain, and Norway that fell victim to the “China shock.” In what they call a “slightly technical aside,” they build a case for addressing trade issues not with trade wars but with consumption taxes: “It makes no sense to ask agricultural workers to lose their jobs just so steelworkers can keep theirs, which is what tariffs accomplish.” Policymakers might want to consider such counsel, especially when it is coupled with the observation that free trade benefits workers in poor countries but punishes workers in rich ones.

Occasionally wonky but overall a good case for how the dismal science can make the world less—well, dismal.

Pub Date: Nov. 12, 2019

ISBN: 978-1-61039-950-0

Page Count: 432

Publisher: PublicAffairs

Review Posted Online: Aug. 29, 2019

Kirkus Reviews Issue: Sept. 15, 2019

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