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Phoenix redux : The Undercover Economist strikes back


Placing the reader in the driver’s seat Harford wonders why the world economy is in such a mess and attributes it to top decision makers.
KS NARAYANAN | New Delhi, October 25, 2013 15:25
Tags : Book Review | Undercover Economist |

Economists come from different schools of thought and specialisations. Of course most economists are well read and widely read. It is a different matter none of their policy prescriptions, neither works nor is it easy to comprehend by one and all.   There are a few economists by training who make a lot of sense of the way economics around us. One of the prominent economists is Paul Krugman, the Nobel laureate and prolific blogger/columnist for the New York Times who writes for wide audience. Krugman is not a loner in this vocation. Others include Martin Wolf of the Financial Times and the freako-economist Steven D Levitt and the journalist Stephen J Dubner.  In this exclusive club another prominent economist is Tim Harford. He needs no introduction. Harford too tries to spoon-feed economics to commoners and is a senior columnist for The Financial Times London and writes for global publications and makes sense economics made simple.

In a world utterly transformed by the global slowdown Harford’s latest book The Undercover Economist Strikes Back: How to run or ruin an economy, focuses on macroeconomics and enable us to understand the complexities of major economics.

As much as last book The Undercover Economist, Harford has again attempted to turn the dismal science into true delight. He had then revealed that every day events are intricate games of negotiations, contests of strength, and battles of wits.

More than a million readers bought The Undercover Economist to get the lowdown on how economics works on a small scale, in our everyday lives. Since then, economics has become big news. Crises, austerity, riots, and bonuses - all are in the headlines all the time. But how does this large-scale economic world really work? What would happen if we cancelled everyone’s debt? How do you create a job? Will the BRIC countries take over the world? Asking - among many other things -- what the future holds for the Euro, why the banks are still paying record bonuses and where government borrowing will take us, in The Undercover Economist Strikes Back, Tim Harford returns with his trademark clarity and wit to explain what’s really going on - and what it means for us all.

With this book he’s turned his attention to macroeconomics or how to run the country and as a conversation between the reader posing the questions and the author finding explanations.

 Written with a light touch and sly wit the book has 15 chapters and focuses on the babysitting recession, stimulus, happynomics, can the growth continue forever?  Interestingly Harford begins the book with the invention of Monetary National Income Analogue Computer (MoNIAC) by Alban William Phillips.  Moniac or the Phillips Machine helped to create the first computer model of a country’s economy.

Placing the reader in the driver’s seat Harford wonders why the world economy is in such a mess and attributes many of the top decision makers have little to do with economics. “Most of the world’s economic movers and shakers seems happy enough without an economics degree,” he writes while quickly listing President George W Bush had a degree in History while, President Barrack Obama, President Hollande of France and Mariano Rajoy, Prime Minister of Spain all studied law. Angela Merkel, the German Chancellor, was a chemist.

For so much of breast beating on the high GDP growth by many decision makers their countries recorded Harford explains how Simon Kuznets who invented the Gross Domestic Product never thought it was a measure of welfare, and neither should anyone else. Further he poses questions why it is GDP per capita and GDP per person. Harford will make a lot more sense to commoners.

Taking the reader through tour on different subject matter of macroeconomics-such as what causes recessions and how states tackle them, to how they control inflation and keep unemployment low. All this comes out well without the technical jargon the subject is famed for.

Like many other writers, China and its socialism has puzzled Harford too as he poses a question; Why on earth has inequality been allowed to reach such levels (in China)? He finds plausible explanation in China’s first great reformist, Deng Xiaoping’s maxim- Let’s some people get rich first’

So much for the prediction and forecasting by macro economists, problems of inflation, inequality and unemployment continues to haunt all the economies.

A macro economist by training Harford raises in defence of his tribe and says we shouldn’t be harsh on them as economy is shaped by variety of factors too quick for humans to perceive. “It is a dizzying, imponderable problem,” he writes admitting no wonder how macroeconomists struggle.

Author: KS Narayanan

Pages: 0

Price: Rs. 

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Issue Dated: Feb 5, 2017