economics for beginners

tir21

I'm tired of not having a clue what is being said when a news item on the economy is on tv

Gilts bonds exchange rates fiscal policy quantatative easing. What does it all mean?

Any books I can read to explain it all Am I the only one who doesnt understand.

What percentage of the british public actually know what quantitative easing is?

SGE1

You could try something like the Money Machine by Philip Coggan - that's as much about finance as it is economics, though (but probably useful to understand both). Otherwise I'm sure the internet can teach you a lot, as could reading articles from the FT or similar.

In the meantime, I think...
- issuing bonds is how some companies borrow money. individuals have mortgages, loans etc; businesses issue bonds (basically IOUs), which investors buy
- gilts are the same as bonds, but issued by governments (rather than businesses) who want to borrow
- fiscal policy is the policy by which governments bring in revenue and then spend it (i.e. tax policy and spending policy). fiscal "events" (the Budget in the UK) are basically government announcements on how they intend to bring in revenue and/or spend it
- exchange rates dictate the conversion of one currency to another, so how many £s you can buy/swap for a set amount of $, for example
- quantitative easing is essentially about pumping money into the economy. the central bank (which is basically the banks' bank) creates/prints money and then uses it to buy various bonds and gilts - so that 'new' money is created and injected into the economy.

Bantex_2

Robert Pestons book is an interesting read.

Generali

There are a couple of textbooks written by Ben Bernanke along with a few others which are pretty good and quite basic. I used to teach from them.

QE is a way to reduce interest rates in an attempt to push people into buying 'risk assets' (shares, houses etc). The idea is that if you push up the price of bonds by the Central Bank buying them you make the interest rate on them lower. If you do that you make bonds less attractive as an asset class.

Hopefully the result is that people will then invest in productive assets, increasing employment and boosting the economy.

Thrugelmir

Ascent of Money - Niall Ferguson - is a gentle introduction.

Michael Lewis has written a few books surrounding the financial crisis.

Making it Happen: Fred Goodwin, RBS and the Men Who Blew Up the British Economy - Iain Martin - good insight into RBS

This Time is Different - Reinhart and Rogoff - heavyweight read well worth the trouble though.

As other recommended. Peston has written a couple of books which convey some interesting information in a very readable form.

vivatifosi

I second Niall Ferguson and Michael Lewis. I also enjoyed Whoops, by John Lanchester. Working in a library, one of the most popular economics books that we have is the Economics Book, from Dorling Kindersley. It has been very well received by the borrowers I have spoken to.

This one..
http://www.amazon.co.uk/The-Economics-Book-Niall-Kishtainy/dp/1409376419/ref=sr_1_1?ie=UTF8&qid=1390778773&sr=8-1&keywords=economics

princeofpounds

I will third The Ascent of Money.

It leads you through the creation of all the main financial instruments - money itself, stocks, bonds etc.

The reason it is quite helpful for someone not coming from the technical side is that it outlines the historical problems that drove the creation of these instruments.

That's more finance than economics, but useful nonetheless.

I would also encourage you to watch the free videos at the Khan Academy. They explain a lot in a very easy way (5-16 minute chunks), although they are not all totally slick.

Try to start at the most basic ones rather than jump into the middle somewhere.

theEnd

This is a simple introduction/explanation of how things originated and where they went wrong:
http://www.amazon.co.uk/How-Economy-Grows-Why-Crashes/dp/047052670X

CLAPTON

better to read a real economics book and understand how the goods and services and money flow round an economy
first year undergrad textbook would be good.


so when people say debt is 'bad' and savings are 'good' you will wonder why they see no connection between the two


you can wonder why state pensions are unaffordable in the UK but are affordable in the virtuous German state

movilogo

QE = printing more money without acquiring equivalent assets in BoE's vault

Don't be upset if you don't understand the terms. I'm sure neither chancellor of exchequer nor BoE governor understands them either

Remember, government don't want normal people to understand their jiggery pokery. If people understand these, then they can apply their brains in ballot boxes which will be detrimental to those parasites in House of Commons

the_flying_pig

CLAPTON wrote: »

better to read a real economics book and understand how the goods and services and money flow round an economy
first year undergrad textbook would be good...

yes, i'd say any of the best A level or introductory undergrad ones.

need to be on decent footing with the micro- & macrofoundations before moving onto the tricker stuff.