No comments about Macroeconomic Theory: A Dynamic General Equilibrium Approach.

5 comments about Macroeconomics.

1. If you are buying this with "Microeconomics", as Amazon suggests, save yourself money and buy the book "Economics" by the same authors instead.
   
   As far as I can tell (I own Economics, thankfully not the separate books) it includes everything in each of the books, but in one book. See my longer review of "Economics" on Amazon.
   
   Instead of spending 2 x $100, the single book is $123.



2. Amazon is terrible about taking forever to ship....if you need any book in a hurry don't order from Amazon.



3. This is a great product, exactly what I needed for my Economics class. The item was shipped promptly and was in great condition when I received. I have absolutely no complaints regarding this product. Thank you.



4. seller never responded to emails and several weeks after buying book still have not heard from seller or gotten the book.



5. The way the product was described is the way it came. I recieved the book within 10 days tops. Great condition. Very satisfied!

5 comments about Economics Micro & Macro (CliffsAP).

1. Perhaps i shouldn't be complaining because i didn't actually take a microecon course and i'm trying to wing the test by using this book. however, i found this book confusing and poorly organized becuase there are times when terminology isn't consistent and i feel like i'm reading a bunch of random essays put together. fragmented lessons with things in between. one good thing about this book is that there are a few chapters that are written very well and are very clear. however, the more confusing topics have confusing chapters. i wish i hadn't bought this book and that i'd gotten a different one.



2. Haven't reviewed the book as yet but am looking forward to using the Cliff Notes in conjuction with an AP Macro and Micro Ecomonics book to prepare for a CLEP test.



3. I guess I shouldn't be complaining because I was attempting to pass the macroeconomics CLEP exam with the AP cliff notes book. The reason I was doing this is because I could not find a study guide for it. So if you are looking for a CLEP study guide don't get this book, I did pass with a 54 and I needed a 50, but it was pure luck.



4. This book was horrible. I bought it for the practice tests, and not only did they repeat the same questions in the same tests on occasion, there were many cases where words were mispelled, or key parts of the problems (such as graphs) were left out completely. This book was of shoddy construction and should be avoided as a tool to study for the economics exams.



5. This book has good graphs and short descriptions, especially if you're looking for the quick definition of an economics term, but overall, it is too general and not helpful enough when you are studying for the AP Economics exam. I used it to review, but the book did not go into enough detail to really be of use to me. Also, there were many instances where the notes in the CliffsAP book contradicted with what I had learned in my economics course and in various impressive, reliable textbooks.
   I do not recommend using this book. It was quite a waste. I have heard that "5 Steps to a 5 on the AP exam" is better.

3 comments about Macroeconomics: Theories and Policies (7th Edition).

1. Overall, a good book for students and business people who wish to gain more knowledge of macroeconomic theory. Very good examples of real life situations, and excellent descriptions of how the theorems work. I would recommend this to economic students wishing to excel in class and business people with the need for economic theory in relation to commodity purchases.



2. The book was in new condition and I got it at a great price. I can't ask for more. Thanks!



3. Caveat: I had to purchase this book as a graduate student in Economics at Johns Hopkins University.
   
   Bottom line boring, and only good if you have to use it in school.

5 comments about More Sex Is Safer Sex: The Unconventional Wisdom of Economics.

1. I generally enjoy books of this type (such as Freakonomics), but this one was disappointing. The author seemed to be trying to find examples to write about in which economics defies common sense/conventional wisdom. Instead, he all too frequently uses economics to justify his opinions about how the world should be.
   
   The best chapters are those such as the one that the title of the book is from, in which he argues using statistics and ideas from economics such as cost benefit analysis, while refraining from too much pontificating. Unfortunately, there is a whole portion of the book (called "How to Fix Everything") in which economics seems to be only the catalyst that allows the author too express his views. He frequently sites arguments from those who disagree with him (he has a Slate column and a website), and his rebuttals have a nasty tone. At one point he even tells the reader "If you think... ...then grow up!" Skip this one if you want to be treated by the author as an intelligent reader.



2. Reading this book is a clearly useful exercise: recognizing incorrect arguments is a useful (and sometimes very fun) skill!
   
   The "unconventional wisdom" from this book is actually a collection of comically oversimplified, misleading, inconsistent, and unverified "theories" (yes, all quotes are intended).
   
   Oversimplification: chapter 6 has six pages plus five additional lines. Its title? Very modest: "How to fix Politics"! Initially, I thought Landsburg is joking, but, no, in the next chapter, the equally modest "How to Fix the Justice System" (22 pages), Landsburg reassures us: "Am I serious? Of course I'm serious!"
   
   Misleading: let's look at the chapter that gives the title of the entire book. As the example goes, Martin and Joan (who like each other very much) plan to leave together from the company Christmas party. But Martin gets scared by an AIDS-awareness ad and decides to skip the party. Joan finds herself alone at the party and leaves with Maxwell, who's HIV-positive. So, if Martin decided to have more sex, Joan would be safer today! Landsburg, a professor of economics at Univ. of Rochester, generalizes this into "More Sex is Safer Sex"! Before you start celebrating, please read on. What he's actually proving is the less interesting statement "if the total quantity of sex (defined as different couples) were equal, then a more uniform distribution of sex maximizes safety". For people who like graph theory, "in a graph with a constant number of nodes and edges, the diameter is likely to be bigger if the node degrees are equal". Notice that this is a quite boring result, clearly not one to generate big sales :) It is also a useless result, as it uses the baseless assumption of a constant quantity of sex (after all, Joan could have gone home alone). There are many instances of this "zero-sum fallacy" in the book.
   
   The Landsburg-style "thinking" culminates in Chapter 14, section "The Sack of Baghdad". There, Landsburg tries to convince us that the sack of the National Museum of Iraq was not such a big deal after all: "A lot of stuff in that museum was five thousand years old. If it were in my garage, I'd have swept it out to the curb a long time ago." Really? I bet he would have sold that "stuff" for a hefty profit. The value of "stuff" is not given by its protein content, nor by what Prof. Landsburg thinks, but by the market (it's shocking that a professor of economics forgets this!). And in the case of the "stuff" from the Baghdad Museum, many buyers were ready to pay a lot of money for it, the same way many people would pay a lot of money for Mona Lisa, another example of old "stuff". Besides, the looting of Baghdad sent a powerful message: the law has collapsed and brutal force rules. No wonder criminals have ruled the streets of Baghdad ever since ...



3. If Freakonomics has you looking for similar material, this is your book. It is less accessible, more hardcore, and somehow a purer form of the often disturbing but ineluctable logic that characterizes this vein of unconventional economic thinking. If Freakonomics is Playboy, then this is Hustler (sorry, probably a bad analogy given the title).
   
   While it is certainly engaging and thought-provoking in the same manner as its more popular cousin, it will often make the reader uncomfortable with its cold, calculating logic. This is perhaps Mr. Landsburg's intention- there is clearly little room in his rubric for illogical emotion- but it will often occur to the reader that the best economists are students of human nature as much as mathematics, and that sometimes the way human beings choose to use resources are indeed illogical. He has no problem at all quantifying the value of a human life, and his lack of squeamishness in dealing with such subjects is to be applauded- but it still often seems that Mr. Landsburg's analyses could benefit from a bit more input from the fields of anthropology or psychology.
   
   On the other hand, most of the ways we have been taught to think about the difficult problems he treats are so fraught with illogical and emotional positions that his analyses are refreshing, if not sometimes a bit shocking.
   
   Read it- you will certainly enjoy it.



4. 'More Sex Is Safer Sex' is packed with inconclusive economic analysis that seem to shock readers, rather than enlighten them with coherent insight. While I feel neutral with Landsburg's cost/beneift analysis & conclusions, I find his witty writing style entertaining. I enjoy the book more than Levitt's 'Freakonomics', & a key success of it is that Landsburg has shown how economic reasoning can provide unconventional solutions/perspectives to problems.



5. A long, long time in a far, far away galaxy John Stuart Mills' parents sent the young boy to live and learn from the political philosopher Jeremy Bentham, the founder of utilitarianism, who fed the boy nothing but utilitarianism until at age twenty-one John Stuart Mills had a nervous breakdown. Reading "More Safe is Safer Sex" we need imagine that Steven Landsburg was born in the University of Chicago economics department, where he was nursed, parented, and fed by economic textbooks: there really is no other explanation on how he could have written "More Safe is Safer Sex," which is economics on steroids.
   
   Take for example the first chapter and title argument: "More Safe is Safer Sex." Mr. Landsburg creates a thought experiment: shy and reserved Martin parties with co-worker Joan, and they're about to go to bed but Martin is reluctant, and Joan ends up going home with promiscuous Maxwell, who gives her AIDS. Mr. Landsburg reasons that it's Martin's fault that Joan got AIDS, and then reasons that it really wasn't Martin's fault because there wasn't enough of an economic incentive for him to have sex with Joan. So Mr. Landsburg's solution: free condoms. Yes, the economic allure of free condoms is enough to transform the shyest geek into the most daring Casanova.
   
   Mr. Landsburg is trying to make a "communal stream" argument, that if more clean individuals like Martin were willing to have sex then they would help purify the common stream against dirty individuals like Maxwell, and the spread of AIDS could be halted. The problem with economics is that it treats humans as a mathematical algorithm, and, as I said earlier, this book is economics on steroids. Mr. Landsburg, let me tell you right now that, if he is a flesh and blood male, Martin wants to get laid, and if Joan offers herself Martin would be more than happy to jump into bed with her. But if Joan offers herself to Martin why wouldn't she offer herself to Maxwell? And then sleep with either of them as she likes? So instead of just Joan getting AIDS from Maxwell so would Martin. This is just simple human psychology (humans have personalities, and their personalities dictate their actions) combined with a little game theory (Joan having sex with Martin does not preclude her with having sex with Maxwell). Most people would call this conclusion "common sense."
   
   Alas, psychology, game theory, "common sense," and just about everything else are what this book painfully lack, although University of Chicago economics majors would be happy to know that there's plenty of classical cost-benefit economics.

5 comments about The Politics of Rich and Poor: Wealth and the American Electorate in the Reagan Aftermath.

1. This book is down right distortive of economic history and the 1980's... Overall, the poor did not get poorer in the 1980's, but quite the opposite. This book is essentially more tired and disproven Keynesian-Socialist views on economics, for people who want to go back to the policies of the 1970's-the era of double-digit inflation and 21% interest rates.

   If you want to narrow any imbalance of wealth- do away with the Federal Reserve system, which robs the poor and middle class of their purchasing power through the hidden tax of inflation. The rich are largely able to avoid the inflation crush, because they typically have the bulk of their assets in more 'inflation-proof' liquid assets like stocks, bonds, mutual funds and real estate. If you're not a bleeding heart, get something else like 'A Nation of Millionaires.'




2. Exploiting class envy is as old as civilization itself,and this book is another exercise in just that.I don't question the validity of Mr. Phillips arguments or stasistics.Sure the wealthier get wealthier or at least maintain their wealth from generation to generation(barring catastrophe)but that is because when you are talking in terms of millions of dollars money automatically makes itself grow.Someone worth $5,000,000 this year will with safe,predictable,long-term investments see an increase in their wealth till the day they die.Poor to middle class people on the other hand won't see a great buildup of wealth simply due to the fact that they don't have enough wealth to exponentially grow year after year.Even an idiot can stick $5,000,000 in the bank,leave it alone,and in five or six years have $6,000,000.Of course if you only have $20,000 in the bank it won't ever be much more than $20,000.All societies have an unequal concentration of wealth and always will.Most so-called economic booms do benefit mainly the upper classes while recessions hit the poorest the hardest.Phillips does a thorough job of exposing the boom of the 80's for the myth that it was, but all in all he has written nothing we didn't already know.



3. The myths (or many of them)of the right are given full exposure in this fine book. Well researched and well written, it is a good primer on the delusions of the privledged class (just read some of the other reviews on this page).
   Over all a significant contribution to the new analysis of conservative revisionism.



4. I was excited to find this book based on the tittle and book description, mainly because I felt I was going to get a book of facts to bolster my already formed opinions. Well the book did provide facts, lots of facts sometimes not in the best order, but facts none the less. What the author and publisher failed to realize is that in the method the book was written the average reader would find it almost impossible to plod through the text. I had a college statistics professor that was Asian with a very strong accent, and the ability to stand at the front of the room and drone on and on without every moving his body or using the black board (an interesting feat in a math class) that was more lively then this book. I am assuming that even economics professors aged 65 and over would think this book to be dry and dull.

   The net effect of the bone dry text and the overwhelming amount of facts, charts and lists of numbers is that a book I was excited to read turned out to be a downright pain to get through. It turned into a labor of love or some sick need to finish the book that finally got me through to the end. I feel like I deserved some medal for completing this thing. Overall the facts are interesting (in small doses) but the written was one that would bore the dead.




5. Phillips wrote this book in 1990.This allows a reader to compare it with later books that dealt with the same problem ,such as " Boiling Point " in 1993 and " Arrogant Capital " in 1994.The first point that Phillips demonstrates overwhelmingly was that the Reagan tax cuts were primarily aimed at increasing the wealth and political power of the Wall Street speculators and investment banks like Bear Stearns,Merrill Lynch,Goldman Sachs, Morgan Stanley,Lehman Brothers,J.P. Morgan,Credit Suisse,Deutsche Bank,etc. This was possible because Reagan was not able to differentiate between Wall Street speculators ,on the one hand ,and entrepreneurship and enterprise ,on the other hand. For instance,ALL of the supply side economists(Laffer,Wannsiki,etc.)and most of the University of Chicago economists advising President Reagan were tied in to the Wall Street crowd ,either directly or indirectly.Phillips covers this in chapter 3.It is here that he makes two serious mistakes in less than one half of a sentence that costs him one-half of a star.He states :" Most of the conservative theorists acknowledged their restatement of Adam Smith..."(Phillips,1990,p.65).First,none of the supply siders or University of Chicago economists are conservatives.They are Libertarians.This is a major confusion that is ubiquitous in America.Second,NONE of the policies recommended by these supply side and Chicago advisors follows from Smith.First ,Smith favored (a) an overall progressive tax system,not a flat or proportional system (Smith,1776,Modern Library(Cannan) edition,p.794),(b)retaliatory and revenue tariffs(Smith,pp.434-439),and (c)direct government intervention into the economy through the provision of universal religious instruction and education,provided for free by the government to all individuals who could not afford to pay,in order to counteract the massive undepletable ,negative externalities/spillover effects arising from the workings of the Invisible Hand of the Market(self interest plus the specialization and division of labor[Smith,pp.716-768,pp.734-741);Phillips does better on p.69 in recognizing Smith's opposition to the interactions of monopolies and government and their negative impact on the political sphere of life.]
   
   A major plus of Phillips exposition is not only the massive statistical support that he presents in this book about the increasing inequality of income between different income classes but a very clear cut example that can be understood by any reader : " Under Reagan,as under Coolidge,the clear evidence is that the net tax burden on rich Americans as a percentage of their total income shrank substantially because of the sweeping tax cuts.The surge in actual tax payments was the result of higher upper-bracket incomes.To measure the benefits,imagine a businessman who had made $333,000 in salary,dividends and capital gains in 1980,and paid $120,000 in federal income taxes.As prosperity returned in 1983,his income climbed to $ 500,000.Yet with the typical tax rates reduced,he might well have paid,say,$150,000 in taxes,more actual payment,of course,but less relative burden."(Phillips,1990,p.82;It is unfortunate that Phillips did not explicitly tie this example in to his Table 2 analysis on p.58 that showed the higher incomes going to providers of " financial services ",a.k.a.,Wall Street speculators).
   
   Phillips loses another one half of a star due to his failure to explicitly deal in this book with the negative impact of the rise of the Wall Street speculators under Reagan ,and their support from the Federal Reserve System under Volcker and/or Greenspan,as well as the support given to them by the Securities and Exchange Commission(SEC),the regulatory agency which is supposed to protect middle class American from the ravages of speculators and projectors. The topic " Speculation " is not included in the subject index at the back of the book wheras it figures prominently in the later books ,such as " Boiling Point" and " Arrogant Capital ".Phillips's Table 2 on pp.56-58 is a briliant historical summary of the negative impact of speculation on the economy;however,he needed to explicitly discuss this problem in the same way that Adam Smith did in The Wealth of Nations on pp.260-340,especially on pp.339-340,where Smith pinpointed,as did the Scholastic philosopher -theologians of the medieval Catholic Church in the 13th century,the dangers of speculation,especially where bankers and financial interests are involved.
   
   
   This leads us to the end of the book and Phillips' discussion of the political ramifications of this process of allowing more and more income to be siphoned off to the " financial services" sector of the economy,i.e.,securitization/speculation and the generation of imcome without production by attempting to manipulate the the income, balance, and cash flow accounts of American corporations and financial institutions.
   
   Phillips correctly identifies what the Wall Street crowd,which controls both political parties,more(Republican) or less(Democrat),regards as their biggest future challenge :" Our biggest fear is that the Democrats surface with a leader who is able to capitalize on the theme of economic populism".(Quotation from GOP Pollster V.Breglio;Phillips,1990,p.210).One need only look at the reliance of the Clinton's,Kerry's,and Obama's on Wall Street money to recognize that such a leader does nor exist.

5 comments about Recursive Macroeconomic Theory.

1. The first time i read the book, i'm sure this should not be the first text book for Dynamic Macroeconomics everyone should read. It's better to read somewhere else as an introduction to the idea of dynamic macroeconomics. Romer 'Advanced Macroeconomics' and Stokey, Lucas, Prescott 'Recursive Methods' are more appropriate to start. After gainning some similarity with Dynamic Methods, it would be much better to study models about macroeconomics presented in the book.

   This book is the presentations of various models using Dynamic / Recursive Macroeconomics. It makes them easier and time-saving to study many kinds of model in a semester. It's GOOD & HELPFUL IN THIS SENSE. However, it might not be a good book for study in depth. You are better to study from the original papers for the same topics.

   I think, this book is similar to Tirole 'Theory of Industrial Organization' in spirit, but different in content. They both show the simplified version of various models in the fields.

   If you think you like this style, you would like to have it. But if you don't, it might be better just to skim (from the library) and read the original papers.

   Hope this comment would be helpful for you to make a decision :)




2. When I recently left my job as cryer in a grim, north-eastern town, I was made the head of recursive macroeconomic theory at a major international bank. I could have done with a simpler introduction than this, to be honest, as my knowledge of RMT was limited. But now I hold my own in meetings simply by spouting a few long words from this book (mainly "macroeconomic" and "recursive" - theory doesn't seem to impress as much) and delegating to underlings.



3. This is a perfect book for three reasons; i) it is perfect for those who wish to learn modern macroeconomics. The book develops necessary knowledge and tools to be applied to dynamic economics, ii) Sargent is one of most prominent and leading macroeconomists of the world, and he should be Nobel prize winner in Economics, iii) the book is published by MIT.



4. This is a great book. But you can download the second addition free on Sargent's website, so I wouldn't recommend buying it.



5. The book is certainly written by distinguished people, but it seems to me that their focus in writting this book was more to exhibit mathematical methods to solve problems rather than discuss the problems themselves. Apparently the book is meant for training mathematical skills in dynamic programming, and prepare you for computer simulations of macroeconomic problems. But don't use it for understanding macroeconomics.
   
   In general, the authors get into mathematical discussions that divert attention from the problem itself, and at the same time they don't explain why they are doing all these. Reading the book needs a lot of background knowledge and self-intuition. Apart from that some chapters are educational and fit for class work.
   
   The first chapters cover mathematical basics about random process and Markov chains and estimation. They are the good chapters. The chapters on partial equilibrium, complete markets ad incomplete markets are also the ones that are noramlly used in class lectures. The book's coverage of consumption theory and economic growth is weak and insufficient. I would recommend Romer or Blanchard&Fisher book for that. The chapter on search and job matching is also simplistic and again not enough. In most of the chapters, technicality dominates concepts, so having a complementary textbook can be great help.
   
   For one thing, the book has a lot of misprints and mistakes too, which seem to be fixed in the newer edition.

5 comments about The Rise and Decline of Nations: Economic Growth, Stagflation, and Social Rigidities.

1. This one-idea book by late professor Olson tries to explain why some countries did better than others in terms of economic growth after World War II - namely Germany and Japan, in contrast with Britain. His explanation is that World War II weakened many institutions in those two countries that, by trying to retain their usual privileges, were holding back economic progress. The weakening of those institutions, permitted the economic miracle in both Germany and Japan. In contrast, England's institutions were not as weakened, so they continue to slow England's progress. I suppose that there are grains of truth in Olson's explanation - though if it was true, then the required policy recommendation would be that is good to suffer a devastating war every once in a while. I think Olson omits another possible explanation: the fact that Germany and Japan had both a strong industrial base before the war, a base that was not completely destroyed by it. Britain was in the 1940s suffering a slow economic decline in its industrial base - which really come back from the late 19th century, when Germany overcome Britain as Europe's leading industrial and economic power. And how would Olson had explained that after he wrote the book (in 1982), Britain went through a much higher economic growth than Germany and Japan - without the intervention of a war. So, while the book is interesting to read, I think its thesis is way too simplistic.



2. I had always wanted to read this book and am glad that I did !
   
   On the one hand the argument is quite obvious and one is left wondering what is really novel in this work (virtues of competition, market flexibility etc.), but I found the last chapter to be an interesting perspective on the effect of imperfect competition on the impact of changes in nominal demand on employment and inflation.
   
   Olson explains social rigidities ,with all their negative collective effects, as the outcome of rational microeconomic behaviour and integrates these into macroeconomic theory (other mainstream macroeconomic theory attribute price rigidity to error or simply make ad hoc assumptions on wage rigidity).
   
   This is a very valuable and important contribution to macroeconomics and explains why some economies are more resiliant than others. The main message is that governments must either make their economies more flexible or have to rely on macroeconomic conditions not fluctuating too much for acceptable macroeconomic performance.



3. Olson seeks to explain why some nations achieve high rates of economic growth while others suffer bouts of stagflation. He contends that the number and strength of "distributional coalitions," coupled with the length of economic and political stability will influence a nation's rate of economic growth. As such, Olson's hypothesis is two fold. First, Olson argues that states with lower levels of "distributional coalitions" often have higher rates of economic growth. Second, states which have experienced prolonged periods of disorder or armed conflict will have lower numbers of interest-group, or collusion organizations.
   
   Olson's explanation builds upon his early work in The Logic of Collective Action, which holds that "...large groups, at least if they are composed of rational individuals, will not act in their group interest" (18). Rather, the rational actor will seek to further his or her self-interest, and will subsequently free-ride when possible. Olson expands the scope of this logic to encompass not only the rationality of the individual, but the rationality of the firm in explaining The Rise and Decline of Nations.
   
   As the power of the firm expands, the firm seeks to maximize its own utility at the expense of a societal common good. In order to simplify a complex argument, we can think of Olson's theory in this way. An organization or firm will not expend its energy to create a benefit to society writ large, as it, and its members, will only receive a fragment of that benefit in relation to the costs incurred. On the other hand, if the same firm seeks to maximize its utility, it will seek to obtain a larger slice of the social "pie." In so doing, it may lower the benefits of society as a whole, but will significantly expand its own gain and that of its members. Meanwhile the firm will only incur a fraction of the costs such action projects on society at large. As such, Olson writes, "The great majority of special-interest organizations redistribute income rather than create it and in the ways that reduce social efficiency and output" (47).
   
   Olson argues that a society with long-term stability - free from war, and economic and political turmoil - tend to accrue more special-interest and collusion groups. This occurs because it takes time and reasonable amount of stability for such interest-groups to organize, solidify, and begin to achieve some collective benefits for their members. Once collective benefits are seen as the result of organization, a host of other interests will begin to coalesce and seek to obtain gains for themselves. What emerges is a highly pluralistic society.
   
   This leads us to the second part of Olson's hypothesis, those nations with high numbers of special-interest or collusion groups have lower levels of economic growth. Olson writes, "Distributional coalitions slow down a society's capacity to adopt new technologies and reallocate resources in response to changing conditions, and they reduce the rate of economic growth" (65). First, distributional coalitions stymie technological adoption when such innovation stands to benefit a rival group. A present day illustration can be found in a labor unions vehement opposition to the implementation of labor saving machinery. Second, distributional coalitions will attempt to block policy initiatives that change the status quo. When policy needs to be developed to increase economic or social advancement, the special-interest groups are likely to feel a certain displacement and will act to prevent such policy. According to Olson, these actions, coupled with others, often lead to policies which promote policies which have the potential to stifle economic growth.



4. Olson's book is difficult to classify, since on the one hand, it's not for the general reader, but on the other hand not so forbiddingly dense that it should be classified as scholarly. Lemme put it this way: it's for economically literate people. It makes use of, say, the concepts describing steady-state growth, supply factors, and expeduture-approach identities that one learns about in a college econ class.
   
   If you don't know what I just said, I imagine much of this book will be opaque to you.
   
   But if you can handle such stuff (and don't let me scare you too much: the gist of this book is clear enough even if you can't), man, O man! Olson's thesis is so brilliant it will give you whiplash!
   
   In brief, great empires invariably collapse not because of cultural overstretch, internal discord, or military misfortune, but rather because the very process of building an empire gives rise to myriad vested interests that eventually claw their way so deeply into the neck of the government that they eventually choke it. In other words, empires collapse because they are invariably made sclerotic by special-interest groups.
   
   An idea that is truly, classically brilliant: not obvious, but once developed at length, undeniable and endlessly applicable.



5. Most people recognize that there is something wrong about special interest groups. While most people think of special interest groups in terms of fairness, Olson examines efficiency issues. Special interest groups, or distributional coalitions, hinder economic growth in industrialized nations. Special interest groups slow the pace of change in industry. We will reorganize production and adopt new technologies more slowly as more coalitions form for the purpose of transferring wealth.
   
   Distributional coalitions are mainly a problem of wealthy nations. Paradoxically, poor nations can experience strong growth due to the fact that they have little to redistribute. Poor nations can therefore develop rapidly. The examples of postwar Japan and Germany fit Olson's thesis well. Japan and West Germany were devastated and left poor by the War, but developed rapidly afterwards. As Japan and Germany became affluent, distributional coalitions formed to retard further economic development.
   
   Olson does not explain the stagnation of so called third world nations. Why is it that Japan and Germany were able to "take advantage" of their postwar poverty, while many other nations remain "too poor" to support extensive distributional coalitions? Distributional coalitions actually abound in poor nations. The Rise and Decline of Nations does not explain all of history, but this is definitely part of the formula. Its examples are a little dated, but there is some great stuff here.

2 comments about The Best Test P CLEP Principles of Macroeconomics w/ CD-ROM (REA)--The Best Test Prep for (CLEP).

1. I have used the REA books to help me prepare for all of the Clep tests that I have taken. This is by far the least impressive of the five study guides that I have used. It is more of a review book than a study guide. The book assumes that you already have knowledge of macroeconomics, the terminology, and the many graphs used. I was new to the subject and had to supplement with a lot of online research (Wikipedia) just to be able to get started in the book. I was able to learn the subject and pass the test but it took more time and effort than it would have with a more comprehensive study guide. If I had to do it over I would still use this book for the practice tests on the cd. Definately plan to supplement with other sources if this subject is new to you though.



2. I had taken a Microeconomics course already and thought it would be a waste to go through it all again with Macro, so I bought this book. With what I remember from Micro, I read through this book and took the practice tests in one afternoon and took the test the next day with probably about 5 hours of preparation. I scored better on the actual CLEP test (70+) than either of the practice exams (which were both good indicators of what the actual test was like). Overall this book was a good refresher, and even if you haven't taken any economics courses you have probably picked up most of this common sense information along the way.

5 comments about Advanced Macroeconomics.

1. This book was a required text for my first semester of the Economics PhD core. I found the book to be a terrible disaster. Supposedly this book is a more basic approach to advanced macroeconomics, but I found I comprehended higher-level texts with greater ease than this book. The wording is very obtuse, which makes understanding the verbage difficult. Once you get past the words and understand the meaning, however, the explanations are also very inadequate given the complexity of the material.
   
   All in all, I have read my fair share of poorly-written textbooks, but I think this one tops them all.



2. One might divide economics books into two categories: those that are strong on explanation and intution, and those that are strong on proof. This book has neither, and unfortunately it appears to be the standard in graduate macroeconomics courses. I find myself wondering if it deliberately chooses the most obscure way to write its equations. For instance, in the Solow and Ramsey models, Romer retains the population and household variables throughout the entire proof rather than simply write them in intensive form. If you're reading the book after a lecture, it stands a chance of confusing you, especially because it tries to avoid optimal control theory (not a good idea!).



3. The Advanced Macroeconomics from Professor David Romer is in my opinion the best Advanced Macroeconomics textbook ever written, due to some points:
   - It treats in a simple manner several issues regarding the most advanced issues on Macroeconomics,
   - It's updated and varied,
   - It's accessible for new comers in the field.



4. This book is almost a stereotype of a bad macroeconomics textbook. While it does have some good qualities, including good and readable writing style (which is useful only when the underlying ideas are sound), its flaws make it unusable for anyone wanting to become a serious economist. I have two separate criticisms of this book: bad philosophical underpinnings and lack of rigor on the one hand, and poor choice and sloppiness in the design of the problems on the other hand.
   
   The prose is pretty good, and, when the analysis isn't going down an objectionable path, you can get something out of reading it. In my opinion, the author is a good writer, but that isn't enough when the ideas themselves are flawed.
   
   Why am I so critical of this book?
   
   While the mathematics of this book are generally quite rigorous (or could easily be made so), the examination of the assumptions underlying the development of material and choice of mathematical forms is completely lacking in rigor. Much of this text seems to me to be based on a fundamental philosophical fallacy: the idea that it is safe to assume that a model provides a valid causal explanation of a phenomenon just because it fits data from the real world. But fundamentally different modeling assumptions can lead to similar fits with data, and it has often proved the case in economics that the reasons behind observed phenomena are very different from the explanations early theories attribute them to. These different models lead to very different predictions when one extrapolates to situations beyond those for which data is available, or when one attempts to make policy recommendations.
   
   Since macroeconomics is ultimately concerned with extrapolating to situations beyond those for which data is available, and making predictions and normative recommendations based on our understanding of economic systems, a deeper level of introspection and a higher level of rigor is necessary. If one is not given a way of critically evaluating models (beyond their fit to data), one will never be able to make valid predictions or normative recommendations.
   
   While this book's perspective might be passable at an introductory level, at the "advanced" level (read Masters/Ph.D. students) it is outright criminal. In particular, I think this book needs to explore a wider variety of models at the fundamental level and place much more emphasis on ways to assess their validity. As others have mentioned, it would do well to include a greater variety of mathematical tools as well. In addition to the recommendations others have made, I would like to see some connections made between the models here and agent-based or game-theoretic approaches used in other areas of economics.
   
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   My second criticism of this book is in the problem sets. This book sets up a scenario in which the chapters present lots of prose discussing the underlying ideas in a more-or-less intuitive way, but neglecting the details of how to actually solve the problems. While it presents a good deal of math, it doesn't prepare the reader adequately to tackle the problem sets. The skills developed in the problem sets are to a good degree independent of the knowledge one can obtain by reading the text of this book. At times I wonder how useful or necessary they are for understanding the material.
   
   I also find that the problems are sloppy in their design and imprecise in their statements. Often, the problems make unstated assumptions that would be immediately evident to anyone with an advanced working knowledge of the field...but these people are not the people reading this book. The bottom line is that the problems are not designed in such a way to be useful to students. More often than not, they simply come across as frustrating.
   
   The bottom line? I would recommend against using this book for any purpose. The sad thing is that I am reluctant to name an alternative; for that, I am still searching. I would be grateful for recommendations if anyone cares to post a comment on this review!



5. The book arrived in a timely manner and the condition was just as described. Very satisfied!