4 comments about The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle (Social Science Classics Series).

1. This book provides a useful corrective to some of the shortcomings of the so-called Austrian theory of Capital and the Business Cycle. Schumpeter, who studied under the great Austrian economists Bohm-Bawerk, was too much of an independent thinker to be part of an economic movement or school. The Theory of Economic Development is his declaration of independence from Austrian capital theory. In the book, he introduces a theory of development and the business cycle that shocked his more orthodox colleagues. Economic development, Schumpeter argues, involves transferring capital from old businesses using established methods of production to businesses using new, innovative methods. Schumpeter's special insight comes in trying to explain how the transfer of capital from the old to the new takes place. Schumpeter argued that it takes place through credit expansion. Through the fractional reserve system, banks are able to create credit, quite literally out of thin air. This money is lent to businesses specializing in new methods of production, who then bid up the price of production goods and consumer goods in their effort to pay for the production goods they require. Thus a form of inflationary spoliation takes place at the expense of established businesses and consumers. Although Schumpeter does not draw the spoliation inference from his theory, it is nonetheless there in the text for all who can see. Credit expansion is a form of spoliation, a form of robbery hardly distinguishable from counterfeiting. But what is unique about the capitalist engine of production is how it uses spoliation in the service of progress. And not merely spoliation through credit expansion, but spoliation through protectionism, stock manipulation, corporate welfare, cartels and monopolies, and outright fraud and manipulation. Schumpeter's book sheds light on just one aspect of this spoliation, and from this stems the book's vital importance to economic theory.



2. In this important book Schumpeter explains the ECONOMIC origins of business cycles. In a convincing way Schumpeter argues that business cycles are inevitable in a developing economy.
   
   This does not mean that there are no other causes of business fluctuations such as changes in commercial policy, wars, inflationary government finance or panics. But these constitute non-economic data and cannot be explained by economic theory.
   
   Conventional macroeconomic theory tends to explain business cycles by some kind of error and focus on correcting this error either by active policy or by advocating a hands-off policy. In this view business cycles have no function.
   
   In a stationary ,non-developing economy (i.e. absence of innovations) there would be very little uncertainty. If you and your competitors have been selling essentially the same product in the same market year in year out and if this were to apply to all products and services would there be any economic risk (fires, epidemics and tax increases are non-economic data) left ? Were there any true economic causes, i.e. causes that economics can explain, of business cycles in the Dark Ages ?
   
   There is still something to be said for Keynesian theory (although not for policy) in that uncertainty does influence investment decisions and that because of uncertainty in a monetary economy some hoarding of purchasing power does occur. But these are mere symptoms of underlying endogenous business cycles caused by the inflationary investment booms - "animal spirits" if you like - invoked by the swarms of innovating firms, e.g. the internet bubble, and the deflationary busts that follow when the old firms die off and yesterday's innovators become part of the stationary cycle. Schumpeter explains the origins of economic uncertainty.
   
   What Schumpeter teaches us is that booms and recessions are necessary phenomena in developing economies, that can't be removed or corrected if we are not to thwart the creation of new wealth by innovation. Recessions are the price we pay for long term economic growth. However, recessions can lead to unnecessary panics that cause unnecessary harm to the economy. Here governments or central banks are able to, and should in my view, correct.
   
   I hope you enjoyed this review and welcome any comments.



3. Schumpeter had an expression that intuitively sums up in a few choice words quite a few of the theoretical concepts of J M Keynes and the empirical/statistical breakthroughs of Benoit Mandelbrot.Unfortunately,Schumpeter lacked the technical training in mathematics,statistics and probability that he needed in order to give a rigorous exposition of his intellectual and intuitive discoveries.Those few choice words are"regular irregularity".Looking at the data available to him early in the 20th century,Schumpeter was able to categorically argue ,correctly ,that price movements over time in different markets and changes in investment over the business cycle could NOT be modeled by assuming that a normal probability distribution could be applied.Schumpeter was the first economist to make a clearcut distinction between risk(applying a normal probability distribution with a stable mean and variance(standard deviation))and uncertainty.Uncertainty would automatically arise over time due to the regular irregularity of constant(nonconstant)technological innovation,change and advance over time.It is quite easy to see that Mandelbrot's nonparametric two variable constructs, measuring discontinuity and short run/long run persistence/dependence(as opposed to the normal distributions assumptions of continuity and independence),are described by Schumpeter's"regular irregularity".Unfortunately,instead of breaking with the classical and neoclassical schools of economics,as both Keynes and Mandelbrot did,Schumpeter decided to remain a loyal soldier,downplaying his severe disagreements.This was Schumpeter's great error.He recognized the severe limitations of the standard price adjustment equilibrium demand and supply analysis,but went along anyway.The potential reader will find chapter 6 of Schumpeter's book alone to be worth the price of admission needed to obtain access to Schumpeter's brilliant breakthroughs.



4. The Theory of Economic Development represents a high point in the history of economic science. Schumpeter had a clear understanding of the difference between static and dynamic issues in economics, and an appropriate appreciation of the latter. This book also shows how advanced Schumpeter's thinking was. On page 10 Schumpeter appears to anticipate the modern definition of economics- 20 years before Robbins wrote his Nature and Significance of Economic Science (was this in the original edition, or just in my 1934 reprint?). Chapter one sorts out Say's Law of Markets in detail, and explains its static nature. Chapter two explains economic development in correct dynamic terms (unlike the pseudo-dynamics of Neoclassical growth theory). Schumpeter is able to explain dynamics because he examines entrepreneurship (and vice versa). Schumpeter also leaves room for real institutions, especially financial markets.
   
   I can honestly say that I learned some new and important things from reading this book, despite the facts that I have a PhD in economics and took my first economics class 21 years ago. Unfortunately, most economists would learn more from reading this book than I. This is a sad commentary on the current state of affairs in economics. Schumpeter was interested in matters of great consequence and thought about them deeply. There is simply no comparison between Schumpeter's insightful analysis and the tedious and purely imaginary intellectual constructs of Solow influenced math modelers. There is a clear difference between Schumpeter's analysis and the intellectual gymnastics of modern mathurbationists. Schumpeter was a true professional.
   
   I was somewhat surprised by the extent to which Schumpeter's ideas fit with the ideas of Mises, Kirzner, and Lachmann. Schumpeter is often seen as an Austrian born Walrasian instead of as an Austrian economist in the Menger-Mises-Hayek tradition. There are clear Austrian influences on Schumpeter's thinking, though he was not a Mises clone. I was already impressed with Capitalism, Socialism, and Democracy. Schumpeter was a true genius, and an economist on par with Ricardo and Hayek. Read this book to learn some development economics, and a little intellectual history too.

1 comments about Can "It" Happen Again? Essays on Instability and Finance.

1. This great book is composed of thirteen essays restating and elaborating Minsky's great contribution to economics: the Financial Instability Hypothesis (FIH). The basic idea is that because the realized returns on any investment project are uncertain (and not merely risky), the contractual debts firms and entrepreneurs incur in financing these investments are inherently unstable. The "subjective state of expectations" will give rise to three different methods of financing: hedge, speculative, and ponzi. Hedge financing occurs when there are considerable margins of safety between fixed payments and *expected* returns. Speculative financing is defined by a project which over the course of its operations will generate *expected* revenue that will be greater than fixed payments, even though in the short-term these payments will be larger than initial realized returns. This gives rise to refinancing, which occurs if both parties to the agreement (lender and borrower) agree on the expected rates of return. Ponzi financing is a very unstable state in which the *expected* realized returns are not even sufficient in paying either the interest or principal on loans.
   
   Now one moves from hedge to speculative and then to ponzi finance according to the general mood of the market. If the market is experiencing a "state of tranquility," then the typical margins of safety that characterize hedge finance will be displaced by speculative finance which is still considered safe according to entpreneurial optimism. This is all subject to change, however. The performance of the market, interest rate changes, rapid changes in animal spirits, etc. etc. are all conditions which give rise to market instability.
   
   In so many words, this is basically Minsky's FIH. Minsky believed that this concept was a logical implication of Keynes' work, although he is careful to point out that the FIH stands on its own even if it is interpreted as being inconsistent with Keynes' message.
   
   Minsky is a pleasure to read and I recommend this book to anyone interested in "endogenous instability". Minsky believed that all market disruptions are *systemic* and not merely accidental. This sets his work apart from most professional economists.

5 comments about Microeconomic Theory.

1. This is not only a text book but also a very sourceful handbook of microeconomics. It is worth owning all your lifetime. Even one day when, we are old, we at least could see all we knew about the microeconomic world at that time.



2. This book is aimed at economics grad students.
   
   Usually economics grad students are guys who are trying too hard to be accepted by an established "academic community". Since most of them lack self-esteem, real world experience and confidence, they must find a way to show the world how smart and special they are. So those people accept being fed such a nonsense like this material.
   
   Dont be fooled. The pseudo-scientific kind of math this book adopts does not add to real world analysis or understanding of a single economic problem. Its all "math rhetoric" to impress the layman.
   
   The economics that really matters is as real as sex. If you have done it, you know what it is, even if you do not fully understand the captions of a pornographic book written in ancient greek. But please dont tell that to an econ grad student. They dont know what sex is.



3. Mas-Colell is a great text to have on the shelf of any graduate student of econcomics. I am working on my Phd, and I refer to it whenever I need to establish a firm understanding of any Microeconomic theory.



4. Nothing special. I needed this for my coursework.
   It will be useful for economics dictionary purpose.



5. I got the brand new book as advertised within the prescribed time limit. 100% satisfaction.

3 comments about The Plan: How to Rescue Society the Day the Oil Stops--or the Day Before.

1. Edwin Black, already an award-winning journalist and investigator for his previous books such as "IBM and the Holocaust" and "War Against the Weak", deserves an award for national service for producing his latest work "The Plan: How to Save America the Day After the Oil Stops--or Perhaps the Day Before." This book should shake up all Americans, and their political establishment, to wake up and take notice of the United States' peril. America has become dependent on foreign countries to feed its oil addiction.
   
   Do Senators McCain and Obama have a Plan of their own to address the ramifications of a shortfall in supplies of petroleum to the US? Have they considered the potential chaos that would ensue in the US if the purveyors of oil come up short?
   
   Edwin Black has certainly done his homework in accessing government documents, anonymous sources, and government websites. Just one of the possibilities Black points out is that should there be a military strike in the Strait of Hormuz near Iran, the US would have to tap its Strategic Petroleum Reserve immediately. Within days, America would have to beg its allies to supply its oil habit. Given that President George W. Bush was unable to secure additional oil production from supposed-ally Saudi Arabia this year, it should be clear to most that the situation begs a solution.
   
   Black is able to suggest a Plan to break the habit of oil consumption through a program that includes retrofitting vehicles and tapping into alternative sources of energy that will free Americans from dependence on countries such as Venezuela and Iran, which have made clear their geopolitical enmity towards the U.S. His latest book, The Plan, is alarming but should move Americans - and the current presidential election - towards discussing how technologies currently available and in development can be harnessed to free their country and start what could promise to be another Industrial Revolution.



2. There are many books urging us to get off oil--for all the known reasons--and touting all the many alternative energy possibilities. But no one else but Edwin Black has shown the guts and common sense to say America must ground the gas guzzlers, period. Or to call the automakers bluff and force them to make and market fuel efficient cars. According to Black they can do it, the technology has been available for a hundred years. Certainly, we got the wake-up call more than 30 years ago. What happened? The Plan explains what happened, why our government, auto and oil industry didn't do the right thing back then, and aren't doing it now either, despite the fact that our oil addiction is bankrupting our country and enriching enemies who want to destroy us and take us over. Getting off oil is not just an energy issue, or an environmental issue, it's a security issue. Furthermore, adopting measures called for in The Plan, such as new alternative energy and retrofitting industries, will jump start our economy. Let's hope this book falls into powerful hands. It lays out a step by step plan to save our society. We just need leadership as gutsy as this plan.



3. Edwin Black opens the conversation we as Americans need to be having yesterday. There is no time to put off addressing the fact that our transportation $$$$ are going to countries who shout "Death to America!!". The only way for the US to remain a leader in the free world is to be free from the corrupting influence that being beholden for fuel causes. Buy the book.
   
   I especially like the FASA, (Foriegn Agents Security Act) being applied to energy lobbyists, but I think it runs short. I say apply it to ALL lobbyists! Buy the book.
   
   Invest in America. Buy two of these books. Keep one for yourself, (to lend out after reading), and send the other to your congressperson. If they get enough copies maybe they'll get the message. Wouldn't it be great if they started receiving 5 copies a day? 10 copies a day? 100 copies a day?!???!!! Then start emailing them and calling, inquiring if they received your copy. Buy the book.
   
   With the car-makers coming to congress hat-in-hand looking for a bailout, now is the time, (Nov 2008), to make them build more efficient vehicles. A plug-in hybrid that runs on CNG, (compressed natural gas), is EXISTING technology. If you add solar power to a house, the cost of driving a car goes to a penny a mile! (or close enough.)
   
   Nothing, and I mean nothing, is more vital to the United States right now than energy independence, period. Our children's future rides on it. Buy the book.

5 comments about Microeconomics.

1. We thought we had ordered the textbook, Microeconomics: Principles, Problems, and Policies by McConnell and Brue. This book however is Selected Material from Microeconomics. The Table of Contents is the same as the textbook, so this is really confusing. Be sure you get what you want.



2. Microeconomics by McConnell and Brue is a great text book. The explanation is very clear. I especially like the way they explain the graphs and concepts. It's very easy to understand. They give very good examples in each chapter. I use it for my class and I found the reading is very enjoyable. This textbook is definitely good for people who want to do self-study of microeconomics.



3. My book arrived in the condition that the seller had posted and it arrived before the delivery estimate that I was given.



4. I never received the book. I have issued a complaint against the owner who I have contacted and has not replied.



5. The study guide is a great way to study the information from the textbook. Even if your instructor does not use it for classwork, it is a handy tool to study for quizzes, mid-terms, or any other tests you may be given during class.

1 comments about 5 Steps to a 5 AP Microeconomics/Macroeconomics, 2008-2009 Edition (5 Steps to a 5 on the Advanced Placement Examinations).

1. THis is a great product that can easily be understood by most people. It helps pass the exam.

5 comments about Microeconometrics: Methods and Applications.

1. The book pretty much covers everything (at more than a basic level) that econometricians would ideally like to know. I think covering so much material in a single book makes it ideal!!



2. If you want a book for microeconometrics such than whenever you need to look at a topic or subjects related to a topic, this is your book. If you need a very deep and comprehensive discussion about a topic, you need more than this. It may be not sufficient, but for sure it is a necessary book for anyone who does applied econometrics. I enjoy reading this book.



3. The book is useful for current line of microeconometric research. However, its presentation is similar to Greene (Econometrics Analysis). So if you are not comfortable with Green this text will not be best for you.



4. Based on previous reviews of this item, I was expected a well-written accessible textbook. Although it has far less mathematical equations than similarily situated microeconometric texts, I do not find it accessible for the less-mathematically inclined.



5. This book is simply amazing. It describes tough problems in understandable words. It is definitely and advanced book and I recommend to read an introductory book such as Wooldridge or Gujarati first. Furthermore you will find not typically econometric yet very useful quantitative methods such as survival analysis or sampling methods in "Microeconometrics". I strongly recommend this book mainly for graduate and PhD students in quantitative methods and economics.

1 comments about The World in Depression, 1929-1939, Revised and Enlarged edition (History of the World Economy in the Twentieth Century).

1. This book is outstanding at describing the economics of the Great Depression. In his time, Kindleberger was regarded by many as the highest authority on the economics of the Great Depression. He also was a regular economist of the highest order. (Check out his other books.) This book is outstanding analysis of the Great Depression.
   
   Kindleberger explains that the reason for the Depression was a lack of a stable international economic structure. In other words, the financial structure we enjoy today simply did not exist at the time. The flawed international system could only have led to a financial crisis eventually.
   
   The financial world used a flawed gold standard - and this book describes why it was a disaster. Great Britain (and finance minister Winston Churchill specifically) played a leading role in implementing the flawed international system. Then when the depression hit, Great Britain quickly dumped the gold standard - hypocrosy - and recoverd the soonest. Herbert Hoover rigidly stick to the gold standard. FDR dumped it once becoming president, and it brought about a recovery. But a full recovery from the great depths of the Great Depression did not occur until the massive spending of World War II.
   
   Why did this all happen? There simply was no financial structure in place to exact a powerful enough of a force on the global financial system. Great Britain had abdicated the leadership role and the United States was yet unwilling to assume that role. Nations turned inward (and I would add that countries that devalued quickly faired best).
   
   Macroeconomics had not yet been developed. Keynes General Theory only came out in the mid-1930's, and then it was largely unknown. Friedman would not develop his monetary theory until well after the Great Depression had ended.
   
   The book is not the only explanation of the Great Depression, nor pretends to be, but is a highly valid one and should be considered by anyone seriously interested in the subject. This book is a classic for the subject.

5 comments about Econometric Analysis of Cross Section and Panel Data.

1. This book provides an excellent overview about state-of-the-art methodologies in econometrics. Instead of other textbooks it stresses more on conditionals and explains potential problems with underlying assumptions in more detail. As I find it sometimes hard to orientate myself, I give 4 stars.



2. This book fills a real gap for those who are interested in things like ATE, ATET and topics related to impact evaluation that are only talked about now in research papers. The explanations are very very clear and they walk you through the thinking process by which the different methods were developed. Of course, it has the traditional coverage of panel data and cross section but with the clarity that Wooldridge always delivers on his books. For all that, this is a perfect addition to your econometric libraries as it covers topics that are not discussed in traditional and introductory econometric books.



3. 
   This book has no graphs - not one. As long there are no graphs or figures, this work will remain incomplete.



4. Its an excellent book for advanced econometrics and a must read at the graduate level. Thanks Mr. Woolbridge



5. As a development economist with some experience with panel data, I found Wooldridge a great guide to the nitty-gritty of longitudinal analysis. Good theoretical and practical background. Examples used to illustrate each point. Organizational structure is simple and elegant. If you've been relying on the Stata Manual to help you with your xt- econometrics, check this out first; you'll be less likely to make a mistake.
   
   A good intermediate text, and a must for any econometrician's shelf. I'm buying a second copy - one for work and one for home. You might consider the same.

No comments about Kaplan Scholarships 2009 Edition: Billions of Dollars in Free Money for College (Kaplan Scholarships).