in Economics

Econ 101

I recently read Naked Economics: Undressing the Dismal Science by Charles Wheelan, a writer for The Economist. He covers many of the more interesting ideas, highlights some underappreciated thinkers, and offers a sound perspective on a field that tries to stay within the boundaries of statistics while undeniably bleeding into politics and sociology. Also see Peterme’s review for more about this.

Here’s some of the concepts he covers, all of which are useful even if you never tread into what is traditionally thought of as economics. Most of the definitions are on the Wikipedia.

Incentives

  • Creative destruction
  • Prisoners delimma
  • Law of unintended consequences
  • Principal-Agent problem
  • Dead weight loss
  • Progressive and regressive taxes
  • Externality

Government

  • Property rights
  • Rule of law
  • Public goods
  • Supply-side

also…

  • Adverse selection
  • Our skills and health comprise 75% of our wealth as a nation
  • Rule of 72: rate of growth divided by 72 equals how long it takes for a growing quantity to double
  • Interest represented as r, the rental rate on capital
  • We often receive more utility via relative than absolute wealth
  • Catastrophe bonds are a way to spread risk and rewards
  • The Tournament model