Teach the basics with the imaginative Little Book of Economics

Looking for another nonfiction book about economics to supplement your textbooks? The Economist magazine's U.S. economics editor, Greg Ip, clearly and concisely explains basic macroeconomic, finance, and globalization concepts in his 2010 book, The Little Book of Economics: How the Economy Works in the Real World. "I've explained the essential concepts with real life examples and analogies, and shown the forces behind the news and events of the last two years," writes Ip in the introduction.

Ip has included a section in most of the chapters titled "Into the Weeds." These sections are primers on economic data and terminology. Each chapter ends with "The Bottom Line," which provides a succinct recap of the main ideas. With chapter titles such as "Economic Bungee Jumping: Business Cycles, Recessions, and Depressions…Oh My!"; "All the World's an ATM: Knitting Global Markets Together"; and "The Buck Starts Here: The Federal Reserve's Amazing Power to Print and Destroy Money," Ip artfully captures the reader's imagination.

Reading Ip's book will help students enhance their comprehension of basic economic concepts and appreciate the practical application of economics.

Suggestions for the classroom
We have created a list of questions  to accompany each chapter of the book.

Have students read the chapter "Labor Pains: Employment, Unemployment, and Wages."Then point them to the Atlanta Fed's Center for Human Capital Studies' new Jobs Calculator so they can see how much net employment needs to change within a specified number of months to hit a targeted unemployment rate.

After students read about inflation and price changes in chapter 5 ("Fire and Ice"), they can use the Minneapolis Fed's "What Is a Dollar Worth?" to explore the Consumer Price Index (CPI) and calculate price level changes for various goods.

The Dallas Fed's booklet Globalization  can reinforce Ip's chapter 6 ("Drop the Puck!: The Globalization Game Is Here Whether We're Ready or Not").

For more insights into current economic news and events, direct your students to Ip's blog.

By Amy Hennessy, senior economic and financial education specialist, Federal Reserve Bank of Atlanta
March 29, 2012

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