Chapter 1
What Does Economics
Study, and Why Should You Care?
Economics is the science that studies how
people deal with scarcity.
Resources, time, and technology are all scarce.
And it always takes effort and time in conjunction with technological
know-how to turn resources into things we want to consume.
Below you will find links that will fill you in on the topics I cover in
Chapter 1 of
Economics for Dummies:
For each of these topics, I've selected some good
links with fun articles for you to read. They'll help fill in the
details of what I introduce in the book. So click around and read the
stuff you find interesting.
Links about Economic History and the Huge
Rise in Living Standards Since the Industrial Revolution
Here's an
quick essay by
Professor Clark Nardinelli of Clemson University about standards of living
after the Industrial Revolution.
Here's a great page by Professor Keith Montgomery
of the University of Wisconson about the
Demographic Transition
that's taken place since the Industrial Revolution. By curing
childhood diseases and easing poverty, world population first soared,
but now thanks to declining birthrates, we're set for a population
implosion.
The biggest problem with the falling birthrate is
that there soon won't be enough workers paying taxes to support all the
retirees--at least at the level of benefits that they've been promised.
Here's a quick introductory article on the looming
Social Security Crisis by Megan McArdle.
Also do read this great short essay by Professor
Ron Lee of Berkeley on
population since the Industrial Revolution.
Links about Institutional, Legal, and
Political Factors that Help to Promote Economic Growth
Professor Thorvaldur Gylfason of the University of
Iceland has a wonderful site on economic growth
here. But keeping directly on topic,
here is a graph from his site showing that
democracy is good for growth. And here is
another showing that
less corruption (right side of the graph) is better
for economic growth. And here is another showing quite
clearly that
education is good for growth. Another
one I like is this graph showing that
the more foreign aid a poor country gets, the worse
it's subsequent economic development. Do check out all the other
graphs he has posted. This site is a wonderful resource.
Here is a
free book put out by the World Intellectual
Propertyrights Organization that will tell you all about
Intellectual Property (patent rights, copyrights, etc) and how they're good
for economic growth and development. In fact, the book is titled,
Intellectual Property: A Powerful Tool for Economic Growth.
Here is a
great short essay by international lawyer
Keith Molkner on the sorts of legal systems that promote economic growth.
Links about Microeconomics and
Macroeconomics
The Wikipedia.com encyclopedia has great listings
for both
microeconomics as well as
macroeconomics. Each page has lots of
great links.
A fun site called
Ask Dr. Econ is run by the San Francisco
Federal Reserve bank. Once a week, Dr. Econ gives a very detailed
answer to a question that was e-mailed to the bank. Better yet, all
the old questions and answers are fully searchable so you an quickly get an
expert answer to a question you have--just as long as Dr. Econ has already
answered it for somebody else!
Links about Math Models in Economics
Stanford economist and newspaper columnist Thomas
Sowell has some
strong words about how badly economics is
taught and how overly mathematical it is in this column. I agree with
him and have done my best to make
Economics for Dummies
straightforward and accessible. And just so you know, Thomas Sowell is
perhaps America's foremost public economist and has done more than
just about any other economist to explain economic principles and thinking
to the American public. No matter what topic you're interested in, a
good thing to do is to type in that topic as well as "Sowell" into the
Google
search engine. Chances are that you'll find a very excellent article
by Dr. Sowell on the subject.
It is also good to read
this letter by Alfred
Marshall, the economist most responsible for getting the
profession to use a lot of math. I've highlighted the part where he
makes it clear that economics has to be explained in plain English.
