Economics – Making Sense of the Modern Economy

Economics – Making Sense of the Modern Economy 2nd Edition (2006) edited by Simon Cox is an interesting collection of essays about the modern economy written by contributors to The Economist.

The book is split into 4 parts. The first on The new Liberalism and the case for globalisation. The second on imbalances in the global financial setup. The third is called The arteries of capitalism and is on finance, central banks and global capital. The book concludes with a chapter called Worldly philosophy on the uses and abuses of economics.

The book is really dense. It’s heavy going. Each essay make a point and backs the points up with statistics and numbers. Think of it as a collection of the heavier going parts of The Economist.

The first part goes over the numbers on how globalisation is making the world richer. It makes the case fairly and points out that a fair bit of the evidence is reasonably circumstantial however there is a quite a large volume of it. It’s no cheer leading but solid argument for globalisation being a force for good.

The Second Chapter is very interesting with comment on the current issues in world finance. The US’s lack of saving and China’s surplus is given a lot of treatment. This issue is one of the things that has driven the Global Financial Crisis (GFC) and it’s also clear that the issues have not gone away.  There are also chapters on the perceived under-performance of the Japanese and German economies.

The Third Chapter on finance and banking is interesting and heavy going. It’s useful reference material.

The final chapter looks at modern economics and it’s applications. A list of promising young economists is made up, one of which is Steven Levitt who has since risen to fame. The government of Zimbabwe is looked at as well as how economists are modelling government.

The book is an interesting view of issues in modern economics, finance and the world economy.

3.5 / 5


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