Book Review > The Little Book of Economics

Greg Ip was a Journalist with The Wall Street Journal for eleven years before transferring to his present position at The Economist.

In his Introduction he states that he wrote this book not for the Economists but for the citizens and investors on Main Street.

Although some of the content is American specific such as explaining what ‘The Fed’ means and what their role is, most of the content is global orientated.

I wanted to review this book because, like most people, I knew generally what ‘economics’ was but when pinned down I was unable to explain the ins and outs of it.

This is what Greg Ip does beautifully. He walks you through how the economy really works and how it affects the people, even down to the fertility rate of the country.

In simple language he defines Inflation, Deflation, Globalization, economic growth, business cycles, recessions, depressions, monetary policy, unemployment and how it is measured, GDP, and numerous other expressions we hear every day. But he goes further and simply explains to the reader the causes, the effect on society and the solutions. He gives examples of countries who have or who are experiencing these cycles.

When he digs into globalization he also discusses how it made America’s mortgage crisis possible and how China has exploited it to spur growth.
He discusses September 11th 2001 and what was and is still, the economic result, something I have never thought about.

There are fifteen chapters and each one tackles a different topic.
Within the chapters are two sections. The first one is called “Into the Weeds” where he explains the internal ‘guts’ of the economy – the data, the people and the lingo.

At the end of each chapter is “The Bottom Line,“ where he précis’s the essentials of the chapter in just a few paragraphs.

So, who would benefit from having this book on their bookshelves? Certainly people like me with a scant knowledge as to how the economy works and what it actually means.

In this day and age knowledge of economics is more important than ever before. Economics influence us every day in the real world whether it is deciding which ASX sector is going to be the leader in 2011, whether to save or spend money or whether to buy a house. Globalization is here to stay and it affects us all.

And certainly parents of teenagers should rush out and buy this small, easy to understand book for their offspring. Greg Ip actually makes a dry subject ‘cool’. So many year 11 and year 12 students are now studying economics and this book would give them a wonderful overview of all that the subject of economics entails.

My son majored in economics and most of the time I didn’t have a clue as to what he was trying to discuss with me – now I do!

Jo-anne Martin is a member of the AIA.