Armchair Economist - Paper free essay sample

The exhaustive examples stated in the book to profess his theories leave little for debate and are very simple for the reader to relate to it. But the same exhaustive examples may also leave the reader confused disoriented. Author happens to understand this fact too hence he has quoted in the preface. â€Å"Attentive readers will observe that this book applies economic reasoning to a vast array of human (and sometimes non-human behavior†¦.. I am therefore confident that no attentive reader will mistake my repeated use of he, him , and his for the exclusively masculine pronouns with the same spellings and pronunciations. The witty and conversational tone applied by the author almost throughout the text helps in keeping the readers engaged and a part of the book. One main drawback is that the author has a tendency to go off the track. He starts off at point A, moves to point B and explains it thoroughly, and then figures out that the crux is actually point A and hence comes back to it and completes that point in a few lines. In short, the main matter is lost in the beginning and found towards the end. Also, writer has explicitly requested attentiveness from the reader’s part only to end up warning that some of the chapters may end up confusing the reader. The writer of the book makes the perfect opening statement by laying groundwork on which the whole unit is expected to revolve. In each of the sub-instances of the unit author has tried to bring an alternate perspective to the ideally formulated, â€Å"basic economic principles† that we deal with in our day to day life. Through the second unit the writer has tried to venture into the grey areas in the study of economics. The writer uses this opportunity to discuss/explain/study tradeoffs, taxes, prices, coase theorem in the book. How to read the news† focuses on utilization of Funds; notice the spending (and its level). Broadly, he has taken the popular segments which are covered and many a times, sensationalized and blown out of proportion by the newspapers. He has taken few newspaper articles, eg. Deficits and unemployment, and how they attempt to pull wool over someone’s eyes to converse contradict and contest. â€Å"How Markets Work† deals with what is in effect the Prisoners Dilemma problem from an economic mind-set, how a winners curse affects the markets, and how do Interest rates fall or rise which is of very much relevance from the macroeconomics points of view. Writer concludes by units on Science and Religion. In the former the author discusses the importance of novelty in the prediction of scientific theories. In the latter he contests the science of economics versus the Religion of Ecology. Book Summary Only to exemplify whatever has been told above, we present an assortment of summaries from chapters only to recollect the main teachings of what the writer has professed. What life is all about? The writer of the book makes the perfect opening statement by laying the basic ground on which the whole unit is expected to revolve. In each of the sub-instances of the unit author has tried to bring an alternate perspective to the ideally formulated, â€Å"basic economic principles† that we deal with in our day to day life. The Power of Incentives: How Seat Belts Kill The first line of the chapter says it all. People respond to incentives. Our author expresses his intentions pretty clear by making a brilliant opening statement. In this chapter he has questioned the 1st economic principle. He states an example about the American Petroleum Industry where petrol prices were subsidized and this led to creation of huge number of queues at petrol pumps but when the subsidies were removed the queues vanished too. Similarly the invention and subsequent law on making the seat belts mandatory was meant as an incentive for people to make the drives safer, but studies were to tell otherwise. Studies over a period of time suggested that the number of accidents have increased over the years. They were greater than the times when people were forced to drive carefully in the absence of seatbelts. The author has further augmented the same concept by stating the example of contraceptives, sign of baby being on board to build on the same subject. But as he narrates further he concedes and eventually concludes that such an exercise of finding faults within this principal is a pointless exercise. Mockingly stating examples form research conducted on rats and pigeons he proves that even rats and pigeons work harder when there is an incentive of higher pay (more food) and drink less beer when their prices go up. Rational Riddles: Why Rolling stones sell out? As in the previous chapter, in this chapter too writer chooses to discuss another economic principal, â€Å"All Human behavior is rational. † He starts by proposing the classical statement â€Å"De gustibus non disputandum† that is there is no accounting for tastes our people preferences. People buy lottery tickets despite knowing the probability of their winning is one in a million. Similarly fans like to night out in huge queues to just to have chance of owning concert tickets. In the contemporary scenario, people like to watch a movie twice or thrice for the reason they have liked the movie very much and they wish to watch over and over again. But these examples are just the build of what he wishes to propose next, that barring few exceptions the so called act of perceived irrationality has a rational reasoning behind it. Each theory, scientific or economic is bound to face some exceptions. As long as the exceptions can be rationally explained within the realm of the theory we needn’t abandon it else we may require a new theory. On the face value it may seem irrational that banks catering to high end customers make use of huge buildings or historical buildings to open their offices.