The most recommended macroeconomics books

This was an exciting reading for me. I find a great connection with Akerlof and Shiller’s book Animal Spirits.

This book admits, that people might have some cognitive limitations and use simple forecasting rules in order to make decisions with resulting implications at the aggregate level. As a result, there is great potential for the emerging, yet undiscovered discipline of behavioral macroeconomics.

Personally, for me, revolutionary element is the combination of bounded rationality and willingness to learn from past mistakes and consequent switch to better rules. This book introduces special behavioral macroeconomic model based on the dynamics of endogenous animal spirits, in which case waves of optimism and pessimism are responsible for the business cycle itself.

I find especially interesting the part devoted to the discussion of how central banks should approach inflation targeting in behavioral models with animal spirits.

Sargent shows how the monetary excesses leading to inflation have often been connected to using money to cover government budgetary shortfalls. This is vividly illustrated in chapter 3 by the way that ending the post-World War I hyperinflations required fundamental fiscal as well as monetary reform. 

Sargent also convincingly demonstrates the power of expectations and the idea that, as government behavior changes, people’s behavior adjusts as well.

You really cannot argue with the Ancient Chinese proverb included on the first page: “The government has strategies. The people have counterstrategies.” Amidst the rich trove of historical cases, my favorite remains chapter 6’s interpretation of the interactions between President Ronald Reagan and a recalcitrant US Congress in the early 1980s as a “game of chicken.” 

Naughton is the grandfather of China economy books, having written prolifically and with great authority on it for what seems like an eternity. This second edition updates his original 2006 work and should be considered a sort of bible, certainly an essential reference, on how China emerged from poverty under Mao to become what it is today. There are no economic or economic policy or structure stones unturned in this tome.

If you are more minded to read an authoritative narrative rather than a sort of handbook, I recommend a much shorter, readable book by the same author, published last year called The Rise of China’s Industrial Policy. It’s also very topical and pertinent to contemporary China discussion.

During my graduate school years at Carnegie-Mellon University, I was exposed to Thomas Sargent’s Macroeconomic Theory, which taught me how to work with difference equations.

More importantly, it inculcated the notion in me that economic theory and econometrics are inseparable notions. The approach that I attained from this book together with the courses that I took at Carnegie-Mellon’s Graduate School of Industrial Administration - GSIA as it was called then – have colored by my research outlook and my research itself over the years.

While Thomas Sargent produced many other graduate textbooks on macroeconomics in future years, I might say this was the most influential one (for me) in terms of the fluidity of its writing and its attempt to bridge macroeconomic theory and empirical research. 

This eBook, developed by faculty members from top institutions, is available for free from the developers’ website, offers several online resources, it's frequently updated, translated to several languages, and has been widely adopted in several countries.

The book includes both the usual topics for courses on introduction to microeconomics and introduction to macroeconomics, using a similar writing style as other introductory textbooks (assumes no mathematical background), thus being accessible to a wide range of students.

Unlike similar books, however, it structures topics differently: instead of presenting chapters according to the main tool or concept being introduced, chapters are presented according to real-world problems.

While this can help motivate each chapter, it may require some adapting from the instructor’s teaching style.

I especially like how this book powerfully demonstrates that economists should care deeply about violent conflicts because of the severe harms that violence inflicts on economies (and ultimately people) in both the short- and long-run.

The book also persuasively shows that peace advocates should seriously consider economics in their work because conflict prevention must get the economic policies right to avoid the outbreak (or renewal) of violence.

I felt that the book succeeded wonderfully as a primer by explaining important economic concepts in layperson terms, applying economic concepts to violence and peace issues across a wide range of countries (including in several mini case studies), and highlighting economics policies that promote long-term growth and development, macroeconomic stability, and stable peace.

I enjoyed reading this book as it provided a deep, and engaging overview of economic theory.

The authors manage to strike a balance between providing a high-level theoretical discussion and making the content accessible to a wider audience. One thing that stood out to me was the authors' emphasis on the diversity of the various schools of economic thought.

In their work, they avoid the common pitfall of suggesting that the history of Economics has “ended”, and instead observe the evolution of economic theory over time. Also, I appreciate the fact that they do not believe that theories in fashion today necessarily provide an adequate explanation for the functioning of the economy.

Overall, I recommend this book to anyone interested in gaining insight into Economics’ controversial development.

I recommend this book because it deals with the main problems faced by capitalist economies, inflation, and unemployment, in a new and original way, and provides the theoretical foundations for quantum macroeconomic analysis.

Orthodox economics has failed to provide a consistent insight into the pathologies blighting our economies, and both the academic and the economic worlds badly need an alternative approach to convincingly diagnose these pathologies, where they come from, and how they can eventually be disposed of.

Schmitt’s volume provides a revolutionary explanation of the cause of today’s economic disorder as well as an innovative solution enabling for the passage from disorder to order.

I recommend this book to any reader interested in the possible cross-fertilization between diverse heterodox traditions in the study of money.

Bringing together perspectives from post-Keynesians, Circuitists, and the Firbourg-Dijon School, the book continues the tradition of Keynes’s and Kalecki’s analysis of a monetary production economy, emphasizing the similarities between the various approaches, and expanding the analytical breadth of the theory of endogenous money.

The authors aim to open new avenues of monetary research and fuel renewed interest in the nature and role of money in capitalist economies.

I am an academic economist, but even more interested in intellectual debates. I discovered this book when I was a PhD student, and it has remained a favorite of mine.

In the 1970s, macroeconomics (not my field) underwent a revolution. The old guard was “Keynesian,” the new Turks were “new classical”. This book is a series of conversations from the early 1980s with the protagonists of this epic period, many future Nobel laureates.

The interviewer, Arjo Klamer, was interested in the rhetoric and culture of economics, and he constructed the interviews in a way that nicely brought out these elements. The interlocutors are brilliant, acerbic, and funny. If you think economics is dry or boring, you won’t think so after seeing how passionate these people are.