Grasp powerful economic concepts to make sense of business, people and the economy
Economic analysis can be useful for investors, business, and government policy makers. Yet, economic concepts can seem complex because of all the bars, charts and technical jargon.
This book explains powerful economic concepts in layman terms, making it so much easier to grasp important economic concepts and understand how businesses, people and the economy work.
Here are some important economic concepts and fundamentals that you’ll find in the book/ book summary:
• How Markets Work
• The Use of Incentives and Disincentives
• The Roles (and Inefficiencies) of Government
• The Economics of Information
• Human Capital
• Financial Markets (including financial instruments and investment principles)
• Politics, Economic Indicators and Globalization
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Keywords: Business, Charles Wheelan, Economics, Finance, Naked Economics, Money
Serene –
Apart from news articles, the last time I read any book on economics was high school. I found Naked Economics explained how Western (primarily US) economic systems worked in very simple, easy to understand language. Particularly in these troubled times, learning how the Federal Reserve and other government agencies try to tweak the economy to encourage fairness and stability. He is unabashedly pro-trade and explains his stance well, which helped me to understand it, though I can’t say he addressed all my concerns.
I did have questions after reading the book because I wasn’t sure where an economy like Syria fit into his description. (He’s an American economist so I wasn’t particularly expecting otherwise.) Private banks have only been legalized in the past couple of years, and though there is a healthy and thriving economy, it does not depend nearly so much on interest rates as the US economy does. Most businesses are small to medium sized. What are the strengths and weaknesses of such an economy? What are the benefits and drawbacks of large foreign investments? I have a laywoman’s ideas but I would have liked to hear the opinions of someone with more economic expertise. I’d also like to know what he thinks of the Islamic bank movement, and how it changes (or doesn’t change) the rules of economic behavior? Wheelan fulfills my expectations but somehow I’m still hungry for more knowledge. [Reviews from Goodreads]
Ari –
This is a fantastic economic primer which skillfully introduces the reader to the most important economic concepts in a humorous and mostly detached manner. There are of course some minor things that I would take issue with, especially some simplified categorizations – but I trust that Wheelan is quite aware of this and has not done this in order to shoehorn any of his own ideas, but rather to make life simpler for the reader. I’m now working my way through more complex books on economics, which I wouldn’t be able to had I not read this book first. [Review from Goodreads]
Billie Pritchett –
I reread Charles Wheelan’s Naked Economics, revisiting it now about four years later. It is still one of my favorite books, but I do have a more modest perspective of it now.
A market economy is really just a name for the transaction of buying and selling goods and services, and the scarcer the goods and services and the more demand, the more people are willing to pay for them. This explains in part why LeBron James makes more money than I do. There are fewer people who play basketball exceptionally well than can teach, which is what I do (and remember, teachers are not paid on a sliding scale where the better teachers make more for their outstanding performance). So LeBron James’s skills are scarcer, mine are not. Note, by the way, this is not making a value judgment. It is an explanation of the pay disparity. And it is unlikely that the demand would be there for LeBron James’s basketball talents were we living in the 18th century, in which case I would have more human capital than someone who can put a ball in a hoop.
Human capital, by the way, is often neglected when thinking about practical economic matters. Here is a rough way to determine your human capital. Consider your work experience, in the different fields in which you’ve worked. Consider also the degrees you have. Consider also your had and soft skills: Hard skills for a poet, for example, would be knowing how to compose a sonata, whereas soft skills would be something like being a good public speaker (a little more difficult to determine, but which you might think you have abilities with). And consider your life experience: Where have you gone? What have you done? What kind of person does this reveal? Add all that together–work experience, educational experience, life experience, and skills. Now think of the jobs you would best be able to be of service to given your experience and skills. And ask yourself these questions: Is there a demand for more people in these professions or is this profession bloated? How would I compare, in terms of my experience and skills, with other people who would also be looking for these jobs? And if any of these jobs require examinations, compare your examination score to the average, another important determining factor. This is a rough and rocky way to measure your human capital, essentially, for better or for worse, your economic worth. Unfortunately, for many workers vis-a-vis the economy, it is difficult for people to find new jobs if they lose old ones because they don’t have very much human capital (that is, their experiences and skills just aren’t valued economically).
There are other important lessons in this book, but if you take away any two, for my money, it’d be the ones above: what a market economy is and what human capital is. Your interests may vary. [Review from Goodreads]
Ali Gilani –
The book is an interesting primer on economics. It is no doubt ideological but the author has given strong arguments for the ideological position he has taken. The book, however, is limited as it is only good for understanding market based economy. It doesn’t shed light on feudalism and tribal societies economics and the complex socio-political and economic relations such societies wield. Apart from such limitations, the book convincingly give arguments for free trade, globalization and market based capitalist system. It doesn’t touch on ‘exploitation’ and merely brushes it away by calling the more skilled earn more profit than the less skilled. The place where I live, the landowner who inherits his agricultural land makes money while his tenants toil for a far lower sum. The question of the skill and ability doesn’t matter here. Here it is all about inheritance! The author takes the assumption that everyone starts from zero and develop skills in life which will decide his/her income -countries included- He misses the point that it is about their inheritance advantage too. A family/country already rich is more likely to remain rich and the same holds for poor families/countries.
If you like to learn about GDP, financial markets, monetary and fiscal policies, human capital etc. this is a good book to start with. [Review from Goodreads]
Jessica Carol –
For a book on economics I found this hilarious. It wasn’t hilarious in the sense that he didn’t know what he was talking about but hilarious in that he made writing about economics funny–his writing style is the key. He is very knowledgeable about his topic and I found myself thoroughly enjoying it because he didn’t bore you. His writing was engaging, humorous, thorougly researched, instructive, and knowledgeable. If you want to learn more about economics I suggest this book. [Review from Goodreads]
Garima Mamgain –
One of the best books on macro economics I have read. The author has very clear preferences and thoughts. I may or may not agree with all of them but loved his practical way of explaining economics. Must read! [Review from Goodreads]
Christopher –
Why did the chicken cross the road? To maximize his utility!
If you like this joke as much as I do, congratulations! You’re an uber-nerd, and this is the perfect book for you. If you don’t like the joke, stay away from my parties. Either way, this book is a very thorough, very clear explanation of a good foundation of economic principles, written with the non-Economists among us in mind. Why are tariffs bad? In what ways are sweatshops good? Why does everyone care so much about interest rates, and how do they affect me? These are the kinds of questions Wheelan addresses, but not in a stuffy, boring, academic “here’s where the supply curve meets the demand curve” kind of way. Naked Economics is the economics professor with a few drinks in him, explaining these concepts in plain English with amusing anecdotes and relevant examples. He explains why certain things in the real world work as they do, why others should but don’t, and what people and governments can do to address them. Kudos to Wheelan for spreading the Economics love, and, for the rest of you, read up. I’ll be testing you the next time I see you. [Review from Goodreads]
Rosalie –
Scariest book I’ve read in a while. Econ for people who never took Econ in school, what were we thinking?! A good read for anyone, a must read for young adults. Start investing, kids. [Review from Goodreads]