Books by Thomas J. Sargent

“It’s a nice book, but it has a lot of critics. Many scholars think that the conventional narrative is not wrong. However, I think it’s an interesting exercise. And it’s out-of-the-box thinking because most of the people think that the reason, why from the 1980s to 2008, we had this big period in which there was inflation stabilisation is due to the fact that monetary policy was very successful. He claims that, no, it’s just a coincidence. It’s interesting, but it’s difficult to read.” Read more...

The best books on Inflation

Federica Romei, Economist

“This is the textbook I use in my PhD macro courses. In fact, it’s used in almost all of the major PhD programmes in the US right now – any respectable programme most likely uses this book. It’s a book of tools and techniques to solve what are called recursive macroeconomic models. Modern macroeconomics uses DSGE models – dynamic stochastic general equilibrium models. That’s a bit of a mouthful, but all dynamic means is that it’s a model which explains how things move through time. So it explains what GDP will be today, tomorrow, the next day and the day after that, and how it might change if the government does different things or if certain things happen in the economy. It’s really a model of how the economy transitions from one point to the next – how it goes into recessions et cetera. Those models are extraordinarily difficult to solve. What this book shows us – and this is the recursive part in the title – is a way of breaking down this really hard problem into little tiny pieces. You can actually solve a much simpler problem when you only have to look at how the economy moves from today to tomorrow. I don’t have to look at how it moves from tomorrow to the next day and all the way out as far as I can see. We can break down these really hard problems into a recursion between today and tomorrow.” Read more...

The best books on Econometrics

Mark Thoma, Economist