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What’s worth reading over the 2023 holiday season?

The lead editors of the Economics Observatory have shared their book recommendations for the holidays. Many of this year’s suggested reads have a historical focus, but they also reflect some of the big challenges we face today.

This year at the Economics Observatory, we have published articles on a wide range of issues – some international, others closer to home. We have looked at inflation, the cost of living crisis, economic inactivity, Russia’s continuing invasion of Ukraine, the effects of climate change and lessons from the global financial crisis. Our back catalogue provides plenty of reading for the holidays.

You may also wish to take a look at the third issue of ECO magazine, which we launched at the Adam Smith tercentenary celebrations at the University of Glasgow in June 2023. Or follow these book recommendations from our lead editors.

The Fiscal Theory of the Price Level by John Cochrane

I would encourage everyone working on monetary and fiscal policy issues to read and absorb the points in this book by John Cochrane of the Hoover Institution at Stanford University and self-styled ‘grumpy economist’.

It is not an easy read, but it posits the view that the price level adjusts so that the real value of government debt equals the present value of taxes less spending. In this world, inflation can erupt when households and firms do not expect the government to repay public debt in full.

The idea has been around for some time, and is rejected by many as it implicitly argues that the monetary policy authority – such as the Bank of England in the UK – cannot control the price level. But in light of the inflation spike and public debt surge after the Covid-19 pandemic, many scholars are looking at this idea again.

Recommended by Jagjit Chadha (National Institute of Economic and Social Research, NIESR)

Material World: A Substantial Story of Our Past and Future by Ed Conway

Material World by Sky News economics editor Ed Conway is a fantastic voyage of discovery around the world exploring the critical materials on which modern life – and the modern economy – depend. Some of these are familiar, like lithium; others far less so – such as the specific sand or salt needed for critical manufacturing processes.

A quarter of a century ago, I published a book called The Weightless World, which observed, correctly, that economic value was increasingly intangible: there has been progressively less material stuff per pound of GDP since at least the 1970s. But the material to which all that intangible value is tethered is essential. This is a terrific read.

Recommended by Diane Coyle (University of Cambridge)

Underground Empire: How America Weaponized the World Economy by Henry Farrell and Abraham Newman

This is a fascinating book written for the general reader. The authors are leading academics in the field of political science and international relations, but they tell a story that has become more important for economists as geopolitical events increasingly shape global economic developments.

The story starts with technological developments, such as the internet and the SWIFT banking system, which have created a centralised ‘plumbing’ for the functioning of the world economy. The United States is at the centre of this system, which has, in effect, given the country great powers. This is the mechanism for the ‘underground empire’.

The great switch-on of these powers was 9/11 when the war on terror began and the United States ramped up its surveillance potential. During this period, economic sanctions also became more effective through payment tracking via SWIFT. The attempt to take down Huawei and starve China of the best microchips soon followed.

Since the attempts to sanction Russia in response to its invasion of Ukraine, we have seen many non-Western nations – led by China and Russia – start to develop alternative payments systems and information architectures that reduce the scope of the underground empire.

The authors, who are American, take an Atlanticist viewpoint, but the book provides a great read and brings together many threads that point to the end of the ‘globalist’ dream of a world with unified information and economic spaces to one where these become fragmented in a multi-polar world of great-power rivalry.

Recommended by Huw Dixon (Cardiff University)

A Crash Course on Crises: Macroeconomic Concepts for Run-Ups, Collapses, and Recoveries by Markus Brunnermeier and Ricardo Reis

As a macroeconomist, I don’t think that crises are the main reason to think about the macroeconomy. But for many who are not macroeconomists, it is crises that really get them to think about the subject. This is because it is during these times of turmoil – when the world is really facing difficulties – that they see macroeconomic issues spill over into most aspects of their daily life.

In this book, top economics professors Markus Brunnermeier of Princeton and Ricardo Reis at the London School of Economics explain, in as straightforward a way as possible, how to understand economic crises with a number of examples.

Recommended by Michael McMahon (University of Oxford)

The Tyranny of Nostalgia: Half a Century of British Economic Decline by Russell Jones

In this book, Russell Jones talks us through the history of the UK economy since 1970, in particular, concentrating on economic policy. Having lived through the entire period (yes, I’m that old!) it was really interesting to read about what the author thought of various chancellors and Bank of England governors and their policies given the benefit of hindsight. I also enjoyed thinking about how his views chimed, or not, with my recollection of events at the time.

The book also effectively pulls the individual experiences of each government together to form a view of where policy went wrong and why – and what might be done to avoid such errors in the future.

Well worth a read.

Recommended by Stephen Millard (NIESR)

The Anarchy: The Relentless Rise of the East India Company by William Dalrymple

The Anarchy by historian William Dalrymple charts the expansion of the East India Company (EIC) from a joint-stock trading company established in the City of London in 1599 to an economic, political and military juggernaut that would ‘eventually grow to control almost half the world’s trade’.

The EIC was a rapacious colonial power that used violence, and exploited divisions within the Mughal empire, to balloon to the point where it came to control much of northern India. While fortunately, this brutality is something of the past, many of the other themes of the book still resonate today – from corporate greed, tax avoidance and bailouts to lobbying and corruption.

Indeed, some see the EIC as the forerunner of present-day multinationals, and point to the risks that come from insufficient regulation and excessively close relations between companies and the government.

The EIC, which Adam Smith referred to as ‘a strange absurdity’, is an interesting case for economists to consider, and The Anarchy provides a detailed account of its history. Dalrymple also points out how the events of the 18th century could have shaped the course of the discipline, as David Hume wrote to Smith to ask whether they ‘any-wise affect your Theory? Or will it occasion the Revisal of any Chapters [of The Wealth of Nations]?’

Recommended by Graeme Roy (University of Glasgow)

Go Big: 20 Bold Solutions to Fix our World by Ed Miliband

Former Labour Party leader and current shadow secretary of state for energy security and net zero Ed Miliband presents a handbook for out-of-the box thinking about policy problems that can seem unsolvable. He provides clear and funny insights into the complex policy challenges we face every day. From ways to fix the UK’s housing crisis to setting out the case for universal basic income, Go Big encourages you to think about solutions more boldly, before thinking about political or fiscal feasibility.

Whatever your political persuasion, Miliband encourages you to imagine a world that we’d all like to live in and suggests solutions for getting there.

Recommended by Rahat Siddique, London School of Economics

The Oligarchs’ Grip: Fusing Wealth and Power by David Lingelbach and Valentina Rodriguez Guerra

The Oligarchs’ Grip should have been called How to be an Oligarch.

Rich with detail on the lives of oligarchs around the world, the book applies insights from managerial and entrepreneurship theory to identify the essential steps to becoming a successful oligarch – bide your time, develop friends with benefits, exploit opportunities, maintain secrecy.

Above all, oligarchs thrive when there is uncertainty – meaning that they are likely to increase their power and influence in the years ahead.

Recommended by Sarah Smith (University of Bristol)

The Nationalist Dilemma: A Global History of Economic Nationalism, 1776-Present by Marvin Suesse

The pandemic and Russia’s invasion of Ukraine have brought home the threat of deglobalisation and economic nationalism. But decoupling was happening even before then, with President Trump’s ‘America First’ rhetoric and trade wars with China.

Remarkably, there has been no change in US policy towards China under President Biden, whose sustained efforts to disconnect the US economy from China mirror the efforts of the Chinese leadership to develop its home markets and indigenise technological innovation.

In their economic policy, nationalists on the one hand prioritise economic development, but on the other seek to limit global exchange. These two goals often conflict and lead to what Trinity College Dublin economic historian Marvin Suesse calls the ‘nationalist dilemma’ in this insightful book.

Suesse traces the global history of the nationalist dilemma from Alexander Hamilton to Donald Trump. In his journey through time, he unpacks the policies of economic nationalists across 30 countries.

In reading The Nationalist Dilemma, I learned that although the tools that nationalist policy-makers use may change over time, their political motivations – and the challenges that their policies pose – are often the same today as they were in the past. If you want to understand how we got to this present point in time and think about what the future holds for globalisation, then this book is essential reading.

Recommended by John Turner (Queen’s University Belfast)

If you are still looking for more suggestions, you can read our recommendations from last year here. Don’t forget that you can also submit any questions that you’d like us to answer in the new year.

In the meantime, happy holidays from the Economics Observatory!

Authors: Jagjit Chadha, Diane Coyle, Huw Dixon, Ashley Lait, Michael McMahon, Stephen Millard, Graeme Roy, Rahat Siddique, Sarah Smith and John Turner
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