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The Economic Way of Thinking
Intended primarily for one semester survey courses in general economics, this text also provides practical content to current and aspiring industry professionals.
Learn how to think like an economist.
The Economic Way of Thinking goes beyond explaining the basic principles of micro- and macroeconomic analysis by showing readers a method of reasoning that teaches them how to apply these principles as tools. The authors expose readers to a method of reasoning that makes them think like an economist through example and application and also shows them how not to think, by exposing errors in popular economic reasoning.
The latest edition has been thoroughly updated with current material.
Learn how to think like an economist.
The Economic Way of Thinking goes beyond explaining the basic principles of micro- and macroeconomic analysis by showing readers a method of reasoning that teaches them how to apply these principles as tools. The authors expose readers to a method of reasoning that makes them think like an economist through example and application and also shows them how not to think, by exposing errors in popular economic reasoning.
The latest edition has been thoroughly updated with current material.
456 pages, Paperback
First published January 1, 1973
40 people are currently reading
723 people want to read
About the author
Paul T. Heyne
38 books4 followersPaul T. Heyne was a professor in economics at the University of Washington, Seattle, United States.
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Displaying 1 - 21 of 21 reviews
February 10, 2025
I read this book for college and I thought it was pretty interesting, I only read the first 9 chapters because they were included in my microeconomics study plan. Overall, I reccomend.
January 2, 2008
Can't believe I'm giving five stars to a textbook! But then again, I can't remember ever actually reading a textbook through, start to finish. This book really was amazingly well written, insightful, and informative. n.b: it is written to a freshman-in-college level audience, but that mostly shows up in some of the examples used. I think I would have read it even if I hadn't had to!
April 26, 2021
Aceasta carte a fost manualul meu de micro si macroeconomie, si in acelasi timp singurul manual pe care l-am citit cap-coada. Autorul da exemple usor de inteles, explica totul foarte bine si e deseori amuzant. Chiar a fost o lectura enjoyable (nu credeam ca o sa zic asta) si o recomand celor care doresc sa inteleaga sistemul economic, financiar, bancar.
June 28, 2020
Summary: This book explains the many simple but important concepts of economics. It focuses on how to make more people "literate" in economics, and apply the concepts when we read news.
Takeaways:
1. Concept of "exchange": This is the "worldview" of economists. We are always exchanging one thing for another. Here are some examples:
(a) skilled craftsmen exchange age/time for experience.
(b) You can hear some teachers saying that they know more because are just older than you, and when they are the same age as you, they did not do as well as you do. This is another exchange of age for experience, so that they can teach you want they learned from time. This difference makes them teachers.
(c) When some people are indulged in video games, they exchange time for other things like work for the pleasure when playing games.
(d) When a woman decides to quit her job and take care of kids, she trades her career achievement for better family.
(e) When poor people decide to give birth to more kids (credits to Poor Economics), they exchange efforts in bringing up kids for more chance to be taken care of when they are old.
(f) When poor people quit their kids from school and ask them to work as early as possible, they exchange future potential to a quick source of income.
2. Concept of "opportunity cost": When we make any decision (and namely any exchange), it consumes A in exchange for B. The cost of B is not only evaluated by the consumption of A, but also "what else I could do with the same resource A." For example, if you use 100 dollars to buy a book, the opportunity cost is what else you could do with the same 100 dollars, such as buying a good pair of headphones. This can also be understood from the light of density. Suppose your decisions' average density (outcome/input) is C, then when you make a new decision, you only look for cases where outcome/input > C. If the new density is less than C, then you could have kept your usual decision.
3. Concept of "marginal decision": It is similar to optimization problem. The greedy algorithm is to maximize the profit rate of each step, so that we approximate a global optima. Marginal decision is about make sure every new decision has the most profit rate. Also the marginal profit for most things will follow MarginalProfit = e^{-NumberOfTimesYouDoIt}.
4. There are also many other interesting discussions, such as a smarter way to look at unemployment rate (Chapter 19), the distribution of income (Chapter 12), etc.
Resources:
Helpful summary
Takeaways:
1. Concept of "exchange": This is the "worldview" of economists. We are always exchanging one thing for another. Here are some examples:
(a) skilled craftsmen exchange age/time for experience.
(b) You can hear some teachers saying that they know more because are just older than you, and when they are the same age as you, they did not do as well as you do. This is another exchange of age for experience, so that they can teach you want they learned from time. This difference makes them teachers.
(c) When some people are indulged in video games, they exchange time for other things like work for the pleasure when playing games.
(d) When a woman decides to quit her job and take care of kids, she trades her career achievement for better family.
(e) When poor people decide to give birth to more kids (credits to Poor Economics), they exchange efforts in bringing up kids for more chance to be taken care of when they are old.
(f) When poor people quit their kids from school and ask them to work as early as possible, they exchange future potential to a quick source of income.
2. Concept of "opportunity cost": When we make any decision (and namely any exchange), it consumes A in exchange for B. The cost of B is not only evaluated by the consumption of A, but also "what else I could do with the same resource A." For example, if you use 100 dollars to buy a book, the opportunity cost is what else you could do with the same 100 dollars, such as buying a good pair of headphones. This can also be understood from the light of density. Suppose your decisions' average density (outcome/input) is C, then when you make a new decision, you only look for cases where outcome/input > C. If the new density is less than C, then you could have kept your usual decision.
3. Concept of "marginal decision": It is similar to optimization problem. The greedy algorithm is to maximize the profit rate of each step, so that we approximate a global optima. Marginal decision is about make sure every new decision has the most profit rate. Also the marginal profit for most things will follow MarginalProfit = e^{-NumberOfTimesYouDoIt}.
4. There are also many other interesting discussions, such as a smarter way to look at unemployment rate (Chapter 19), the distribution of income (Chapter 12), etc.
Resources:
Helpful summary
March 9, 2013
The best textbook of ANYTHING I ever read - in other words, not only valuable in content but the very best in methodology and approach. Stimulates thinking about economy and in general.
May 20, 2018
GREAT BOOK!
It was kind of a review of all my four year courses in Economics & Finance.
The point of view to the governmental politics, people's opinions about country's economics is wonderfully illustrated.
I read in Russian, and the translation wasn't the best, as most of the economic terms are better understood in English.
The book is mainly for american economy, however, the logic is irrefutable for any economy.
Really loved the book. My sincere gratitude to the author!
It was kind of a review of all my four year courses in Economics & Finance.
The point of view to the governmental politics, people's opinions about country's economics is wonderfully illustrated.
I read in Russian, and the translation wasn't the best, as most of the economic terms are better understood in English.
The book is mainly for american economy, however, the logic is irrefutable for any economy.
Really loved the book. My sincere gratitude to the author!
December 18, 2021
An absolute must for anyone living in this society.
An insightful, thought-provoking read which guarantees to re-shape your vision of some of the most common concepts that so many people use way too easily and way too wrong. I am especially grateful for the comments put on the margins and the section with extra questions and real-life situations, they have been really helpful in taking the content out of the pages and applying it straight away.
Take it from a totally arty person!
An insightful, thought-provoking read which guarantees to re-shape your vision of some of the most common concepts that so many people use way too easily and way too wrong. I am especially grateful for the comments put on the margins and the section with extra questions and real-life situations, they have been really helpful in taking the content out of the pages and applying it straight away.
Take it from a totally arty person!
December 22, 2017
5 ვარსკვლავი არ ეყოფა ამას :(((
Want to read
June 9, 2020TO read the book for improving knowledge towards economics, market, and business
February 2, 2021
Leíste un paper de la George Mason University*
August 21, 2022
作為一本經濟學教科書，這本書內容豐富全面且清楚，幫助讀者掌握許多重要的經濟學基本觀念，也清楚說明如何採用經濟學的思考方式來看待問題。難能可貴的好書，以教科書的標準而言更是如此。相當推薦。
February 11, 2014
"The Economic Way of Thinking" is THE best piece of economic writing. In five pages Heyne gives a WHOLE SEMESTER of knowledge. The language is transparent like no other economist's has ever been.
Theologian and economist Paul Heyne selects five concepts as doorways into economics: economizing actions, marginal decisions, opportunity costs, interactions between economizers, and markets and prices.
The essay and other words by the author are available at the Online Library of Liberty: oll.libertyfund.org/collection/4467
It is a masterpiece. Go! download it; read it ten times over ten days. Go.
Theologian and economist Paul Heyne selects five concepts as doorways into economics: economizing actions, marginal decisions, opportunity costs, interactions between economizers, and markets and prices.
The essay and other words by the author are available at the Online Library of Liberty: oll.libertyfund.org/collection/4467
It is a masterpiece. Go! download it; read it ten times over ten days. Go.
December 9, 2014
This is an economics textbook that actually teaches something useful. There are some charts and graphs, but the main focus is to develop a thought process, not to present vocabulary and formulas to memorize. The first half of the book focuses on basic human interactions that define "economics" using simple examples. Armed with that understanding, the reader moves to the second half to understand more "macro" issues that will be familiar to anyone who pays attention to national news. The concepts presented have practical value to anyone wanting to understand business or just to be able to sift through all the economic nonsense presented by politicians and talking heads in the media.
September 14, 2015
Эта книга познакомила меня с экономикой, как с наукой о процессах, происходящих в обществе. Она убедительно рассказывает о том, что само собой сложившиеся вещи складываются по определённым законам. А осознание этих законов позволяют предсказывать будущее. Давно прочитал страниц двести и отложил, а недавно понял, что теперь про экономику мне надо читать уже другие книги: либо более свежие, либо классические труды.
May 29, 2015
I always used to want to write my ideal economics textbook. Then I read this book and realised that Heyne, Boettke, and Prychitko had already written it. Clear enough in its exposition to be accessible to the general reader whose interest in economics might have been piqued by something like Freakonomics, and heterogeneous enough in its outlook to interest and challenge a well read but orthodox economist, this is one of the best books on the subject I've ever read.
August 20, 2024
If I could give it 6 or even 7 stars I'd do it without hesitation. Simply the best introduction to economics out there. Also the best text book on any subject and the best non-fiction book in general I've ever read. I recommend it to everyone age 14 or higher even if you wrongfully believe that you don't care about economics or won't understand it.
November 13, 2009
This a pretty good book for a general overview of economics..The author has a witty style and uses great real life examples....If you read it cover to cover I think you should have a pretty good grasp of the dismal science...
July 7, 2016
Just read the review and realized that this is a textbook =_=||
But it's very interesting book to read even just for recreational purposes. Although I'll highly recommend to take some notes while reading.
But it's very interesting book to read even just for recreational purposes. Although I'll highly recommend to take some notes while reading.
Want to read
July 4, 2012Yet to read this book
August 21, 2014
ტვინის ჭმა :v
April 29, 2015
Good for learning basic Economics
Displaying 1 - 21 of 21 reviews