Economics Made Easy: Best Books to Understand Economics in a Simple Way

The definition of Economics states that it is a social science that studies the production, distribution, and consumption of goods and services. It focuses on the behavior and interactions of economic agents and how economies work.

The analysis of economics can be applied throughout society and across diverse subjects like – Business, Finance, Healthcare, Engineering, Crime, Education, Family, Feminism, Law, Philosophy, Politics, Religion, Social Institutions, War, Science, and Environment. Economics includes broad distinctions between positive economics and normative economics, economic theory and applied economics, rational and behavioral economics, and between mainstream economics and heterodox economics.

As complex as these concepts sound, the study of economics can be understood easily through some books that simplify the concept for a better understanding.

Best Books for Understanding Economics

Economics is an integral part of everyday life as it teaches the workings of personal finances as well as how to manage them. This is a list of books that breaks the vast and deep subject of economics into simpler language and concepts that are easy to understand.

Common Sense Economics
The Road to Serfdom
The Armchair Economist
Misbehaving: The Making of Behavioural Economics
Economics in One Lesson
Freakonomics
Thinking Fast and Slow
Capital in the Twenty-First Century
Good Economics for Hard Times

Common Sense Economics

Renowned economists themselves, the authors of this book explain important and basic concepts like supply & demand, trade, and private ownership in a language that is clear and easy to understand. ‘Common Sense Economics’ successfully answers questions posed by beginners on the subject – How an economy works & what redistribution of wealth is.  

The Road to Serfdom

This 1944 publication is regarded as a gospel in the world of economic writing. Over the years this book has sold over 400,000 copies and been translated into more than 20 languages. Hayek’s book covered the then-controversial warning against state control over the production of goods. The book has since been updated by a Hayek scholar, Bruce Caldwell who has added clarification and a modern take on Hayek’s writing. F. A. Hayek was the recipient of the Medal of Freedom and the Nobel Memorial Prize in Economics. He also taught at the University of London, the University of Chicago, and the University of Freiburg.

The Armchair Economist

The book applies real-world situations to economic theory. It attempts to answer questions like – Why do celebrity endorsements sell products? Do Government deficits matter? Why do women pay more for the dry cleaners? A revised edition of the book includes many more such queries and makes the economic concepts easier to understand. Steven E. Landsburg has written two textbooks on economics and is a Professor of Economics at the University of Rochester.  

Misbehaving: The Making of Behavioural Economics

True to its title, this book denounces the idea that economic theory is based on the behavior of rational people.  Turning economic theory on its head, Thaler states that humans are inherently flawed and easily succumb to bias and emotional decision-making.  This causes a ripple effect on the economy.  Thaler uses this theory to then educate his readers on the ways to avoid these emotional pitfalls and make smarter decisions.  Richard H. Thaler is a Professor of Economics and Behavioural Science at the University of Chicago’s Graduate School of Business.  He is also a Research Associate at the National Bureau of Economic Research.

Economics in One Lesson

This is a book that is sincere in its approach to explaining economic theory. Written in 1946 it explains the intersection of the government and the economy and the importance of the free market. Hazlitt’s lessons include anti-deficit approaches to the markets and economic liberty. His book has sold more than a million copies which is proof itself of the relevancy of his lessons. Henry Hazlitt was a founding co-president of the Foundation for Economic Education and an editor of The Freeman magazine.  

Freakonomics

The cover of the book mentions ‘New York Times Bestseller’ and rightly so as it was a runaway hit. Its unconventional writing tackles everyday questions and explores the answers through the lens of an economist. The kind of questions it asks are different and may seem irrelevant, but the answers speak to what incentivizes people and how people make decisions. It also calls conventional wisdom into question. Steven Levitt is a Professor of Economics at the University of Chicago and Stephen Dubner is an award-winning journalist and a radio and television personality.

Thinking Fast and Slow

Daniel Kahneman is a psychologist and has won a Nobel Prize in Economics. His book delves into the human psyche and the two systems that power our thoughts – one fast and the other slow. The author says that these two systems are responsible for our thoughts and actions and define everything from overconfidence in the workplace to cognitive bias and how we make decisions on where to vacation next. He delves even further into when to trust intuition and how to avoid common pitfalls while taking personal or professional decisions.  

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Capital in the Twenty-First Century

Thomas Piketty, in his book, offers an unparalleled take on the history of wealth inequality in Europe and the United States of America. He has detailed the havoc that such an inequality can wreak on an economy. He clearly explains that when the rate of return is greater than the rate of economic growth in a country, wealth inequality will continue to flourish. Capital in the Twenty-First Century is the winner of the Financial Times and McKinsey Business Book of the Year awards and a New York Times and Wall Street Journal best seller.

Good Economics for Hard Times

Good Economics for Hard Times tackles the pressing economic issues of this age – climate change, globalization, immigration, and inequality. It couples it with modern economic takes that could very well be the solutions to the biggest issues being faced by the world in current times. The book has gone back to the basic concept of ‘Why Economics Matters’.

Conclusion

Economics surrounds us in our everyday lives. Knowingly or unknowingly, each one of us applies it every day. It is a topic of utmost importance and hence, it becomes necessary for everyone to try and grasp the basic concept of what constitutes the larger topic of Economics. The books mentioned above have all the relevant information that is written in a simple, easy-to-understand language.

FAQs

What is Economics?

The definition of Economics states that it is a social science that studies the production, distribution, and consumption of goods and services. It focuses on the behavior and interactions of economic agents and how economies work.

Name a few books to understand Economics in a simple way.

Following is the list of a few books through which Economics can be understood in a simple way -

• Common Sense Economics
• The Road to Serfdom
• The Armchair Economist
• Misbehaving: The Making of Behavioural Economics
• Economics in One Lesson
• Freakonomics
• Thinking Fast and Slow
• Capital in the Twenty-First Century
• Good Economics for Hard Times