Recommended reading

By Megan McArdle

I'm rereading the Great Contraction chapter from Milton Friedman's Monetary History of the US.  It struck me that there are probably a lot of people out there who would like some books that might help them make sense of it all.  Here's my list:

  • The Great Contraction by Milton Friedman and Anna Schwartz.  Just the 1929-1933 chapter of Friedman's massive work.  The book is somewhat technical, but with half an hour on investopedia looking up terms like velocity, it should be accessible to anyone decently intelligent and well informed.  Since this is the work that shaped the modern understanding of what happened in the Great Depression, it's well worth diving into.
  • The Great Crash by John Kenneth Galbraith.  Basically the opposite of the Great Contraction:  often technically incorrect outdated, but very accessible, and while much of the economic theory is questionable, the history is extremely engaging and often quite funny.
  • A Short History of Financial Euphoria by John Kenneth Galbraith Same caveats, and praise, as above apply.  The book is tiny-readable in one leg of a commute for an average reader.
  • Once in Golconda by John Brooks an extraordinarily enjoyable account of life on Wall Street prior to, and just after, the 1929 crash.
  • Liar's Poker by Michael Lewis  He didn't mean to, but he gave a pretty good primer of the explosion of the mortgage backed securities market in the 1980s.  It's also hilarious reading, and we could all use a laugh
  • Manias, Panics and Crashes by Charles Kindleberger  the definitive primer.
  • Extraordinary Popular Delusions and the Madness of Crowds  The first attempt to explain why people go so crazy over . . . well, nearly everything.  
  • Risk and Business Cycles by Tyler Cowen.  The authorship speaks for itself.
  • The Return of Depression Economics by Paul Krugman  Ten years old, but an excellent introduction to many of the current issues.

This article available online at:

http://www.theatlantic.com/business/archive/2008/10/recommended-reading/4227/